World class – Take your travel programme multinational
As businesses continue to globalise, so does the way they manage their travel. The International Monetary Fund has predicted that by 2050 only three of the world’s top ten economies will be in Western countries, so the need for companies to tramp the globe seeking fresh sales opportunities is only going to grow.
“China has overtaken the US this year as the world’s largest spender on business travel,” says TravelpoolEurope managing director Søren Schødt. “It is a highly symbolic moment, which shows that the old transatlantic focus for travel management is finished. People used to talk about the 80/20 rule: 20 per cent of countries accounting for 80 per cent of your spend. But spend has spread across more countries so that the ratio has often shifted to 70/30 or even 60/40. We are seeing this change amoung our own membership. Even relatively small companies are beginning to manage travel multinationally.”
Cross-border travel management creates new challenges. Above all, the priority is finding the right balance between standardised global processes and policies on the one hand and the needs of local travellers on the other. It is possible to achieve uniformity across most countries, but there will always be some exceptions because few travel management tools and technology are not available worldwide. And then there is also the question of different languages, currencies, regulations, tax regimes and cultural attitudes which can radically affect the way travel is not only organised but percieved from country to country.
Just one example among many is payments. While it may be fine to hand corporate credit cards to travellers in North America or Western Europe, this is often inappropriate elsewhere. In many countries, employees’ low incomes rule out giving them cards, and local hotels and restaurants may not accept plastic anyway. Yet many companies depend on data from their card company to understand their travel spend in detail. Going global means this issue needs to be looked at again.
Two of the biggest questions to consider are setting an appropriate policy and travel management company selection. Here are some of the issues that need to be weighed up.
Choosing a multinational travel policy
Find the right amount of flexibility
It is easier than you might think to create a set of basic policy rules which apply in all countries. For example, TravelpoolEurope members tell their travellers worldwide they should always choose the lowest fare. Travellers, wherever they are based, are also required to book short-haul fares a minimum of seven days in advance and long-haul fares a minimum of 14 days. For accommodation, policy says travellers should use preferred hotels or properties which do not exceed a set price cap for each city.
However, there will always be a small number of local exceptions and refinements. For example, many businesses are reluctant to let travellers use Airbnb because they are worried about safety issues. Yet in Africa Airbnb is actually considered a safer option than hotels, which are regularly targeted in terror attacks.
Only allow tougher variations
Global policy should be a line in the sand. Allow countries to make their version of the policy tougher, but not more relaxed. For example if global policy allows business class for flights of more than seven hours, don’t let local variations lower this limit, but do allow a switch to economy-only.
Find the right collaborators
Making a global policy work needs co-operation with many stakeholders. Perhaps the most important is senior management. Unless someone at executive board level publicly backs the policy, it will be hard to carry enough authority to achieve change in other countries. Communications should make it clear that senior management expects adherence to the global programme unless there are compelling reasons to act independently.
You also need to win influential friends in each country where you operate the programme. Country managers, travel bookers and frequent travellers could all be important allies, and you will need champions to relay why following the policy is good not only for the business globally but also locally and for individual travellers.
Listen, understand, act
Your local champions are crucial not only to cheer-lead the travel programme but also to help you understand local needs and what will and won’t work in their country. Ideally, you should visit each country in the travel programme, both to learn more and build a better relationship with local contacts. It is also important to learn from local experts about crucial contexts such as human resources issues, security, tax and data privacy.
Above all, don’t alienate other countries by insisting on new practices that clearly make things worse. If a local solution is demonstrably cheaper or more effective, don’t fight it: allow it, or improve your alternative.
Working with TMCs
You don’t have to use the same TMC everywhere
Using one TMC worldwide is a trend that is going out of fashion. It is now recognised that although TMCs are global brands, they cannot deliver a consistent global service, despite improving the consistency of their systems and data collection in recent years.
Find other ways to achieve data consistency
It is becoming easier to integrate reporting from different TMCs. One option is to give one of your TMCs lead responsibility for coordinating management information from itself and all the other ones you use. In the case of TravelpoolEurope, we boost consistency by using the same GDS and booking tool in all markets.
You do need local TMC representation
Some companies try to save money or achieve more consistent service delivery by hiring a TMC to provide multinational services from a single regional centre. If this is going to succeed, it requires the centre to obtain numerous single-market IATA licence numbers so agents can access local fares for each of those markets through the same GDS.
Regional centres can be effective for limited geographic clusters where the client has significant spend in one of the countries covered. One example would be a “DACH” regional operation for companies with major spend in Germany but minor spend in Austria and Switzerland. “To make this arrangement work, you need to check very carefully you can access all relevant local market fares outside the country,” says Schødt. “But you will probably still need local offices to issue the tickets and also risk missing out on travellers being served by TMC staff with good local knowledge. On balance, we think local service is worth paying for.”
The TravelpoolEurope perspective – open your mind as you go global
Businesses are having to review their travel programmes as they become more international. They need to consider their service provider choices and develop a two-way communications structure to ensure travel policy is culturally attuned to the increasingly varied needs of their travellers.