Egencia releases Global Cost Avoidance Study

Thursday 24, February 2011


Egencia releases Global Cost Avoidance Study


Global study examines corporate travel trends and best practices, uncovering hidden “tricks of the trade” for avoiding costs in 2011 corporate travel.


Egencia, an Expedia, Inc. company, today released the results of its 2011 Global Cost Avoidance Study, uncovering several best practices and strategies that travel managers can use to circumvent and protect against growing corporate travel costs.


“Given that air and hotel prices are expected to increase in 2011, it’s now more important than ever to focus on policy enforcement and cost avoidance strategies to control corporate travel spend,” said Mark Hollyhead, Senior Vice President, Egencia Americas. “It is our goal to ensure our clients maximize their budgets and minimize their costs, without reducing their service, comfort or safety.”


The global survey of 348 travel executives revealed that 95 percent of respondents view traveler compliance as important to extremely important to the success of their travel program in 2011. A lack of compliance can mean missed opportunities for corporations to conserve funds, and can ultimately affect the bottom line. For example, respondents identified failure to book air travel far enough in advance (68 percent) as the number one area where travelers tend not to comply. Respondents identified other areas of frequently breached compliance, including: 


  • Not booking preferred carriers or lowest logical fares (42 percent)
  • Booking more expensive hotel rooms (32 percent)
  • Not booking hotel rooms with preferred hotel partners (30 percent)


To encourage compliance with their travelers, 50 percent of respondents proactively communicate their corporate travel policy as updates occur; with 16 percent communicating quarterly, 11 percent yearly, and four percent never communicating. Additionally, 77 percent of respondents noted that they do not use incentives to keep their travelers compliant with their corporate travel policy.


“Establishing and enforcing a comprehensive corporate travel policy is the heart of any successful corporate travel management program,” Hollyhead said.  According to a recent joint Egencia/NBTA Foundation study[1], a carefully conceived and consistently enforced corporate travel policy allowed companies to reduce annual travel spend by at least 45 percent or more.


When respondents were asked how they promoted travel spend accountability within their company, 56 percent noted that they establish a pre-trip approval system for approving or denying travel before booking, while 37 percent identify rogue travelers and follow-up with them directly, and 36 percent provide department managers with a specific travel budget that they manage and own.


In addition to strong policy enforcement and compliance, corporations should actively utilize cost avoidance best practices to ensure a successful travel program. Respondents identified several key tactics as effective to very effective, including: 


  • Insisting that travelers use lowest logical fares (55 percent)
  • Requiring pre-trip approval (51 percent)
  • Leveraging hotels that offer discounted/included amenities (47 percent)
  • Using independent hotels (25 percent)
  • Utilizing a last room availability clause (17 percent)


Corporate travel executives are increasingly focused on negotiating additional amenities or better terms and conditions into their hotel contracts, with 49 percent of respondents saying that they are utilizing this tactic to combat anticipated hotel rate increases in the coming year.


“Educating travelers to utilize and understand the full benefits of negotiated hotel rates can help immensely,” said Wendy Aird, Vice President of Sales and Account Management, Egencia. “For example, programs like the Egencia Preferred Rate program offer travelers discounted rates, additional amenities and flexible terms and conditions which allow corporations to avoid and incur additional costs while maintaining the integrity of their traveler satisfaction.”


The majority of respondents (57 percent) noted that they do not include reminders in their travel policy communications about available hotel benefits or amenities that have been negotiated into their rates. This is a substantial missed opportunity, as educating travelers on the availability of these benefits through targeted communications can dramatically increase the likelihood of them utilizing these rates and included benefits.


Further insights into Egencia’s 2011 Global Cost Avoidance Study are available upon request, as well as region-specific figures. 



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