Discovering
hidden costs will certainly be one of the most valuable contributions of
the CWT Solutions Group, in terms of business travel optimization, in the
coming years. It definitely sets a new approach to the ongoing discussions
about savings and productivity.
If
we take a look to the Spanish market, we will notice that the global spend in
business travel has fallen significantly since 2008 and yet the total number of trips during the
same period has increased on a quite solid basis. During the said period,
Spanish companies and TMCs have done a tough job and have been able to
implement efficient travel policies and achieve important savings in order to
allow business travelers to travel more frequently and further but for less
money. At the same time, return indicators such as the export activity have
increased in similar terms (business travel is a driver of commercial activity
and economic growth).
However,
the more we travel the more we can be exposed to stress/friction and consequently
to hidden costs. According to a CWT research, the average equivalent of such lack
of productivity can amount up to 662$.
Although
companies have to focus on cost optimization, the room for more cost savings is
not unlimited. On the other hand as travelers are increasingly exposed to
stress due to more frequent travel and strict travel policies, more hidden
costs can rise.
Is
it possible to find the balance between necessary savings, duty of care and productivity?
Spanish
corporations acknowledge that they need to expand their travel budgets in order
to ensure their presence in international markets. In fact, the figures for
2013 confirm a double digit increase in travel intensity in most of the long
haul markets. But the most important decision, once acknowledged the value of
business travel as an investment and a driver of economic growth, is to ensure
maximum productivity. Corporations need to analyze where to eliminate hidden
costs when possible, because it will both provide savings and “address their
duty of care responsibilities”.
A
recent research (2013) conducted by GEBTA Spain proves that in 22% of the cases
analyzed the cost of inability to work is higher than the savings achieved
while booking economy fares instead of a more expensive air ticket which
provides adequate conditions for productivity and rest. Depending on the routes,
and the traveler profile, the percentage can be of 75%.
The
reason is simple, if we take into account the per hour cost of our travelling
employees and compare it with the savings resulting from basic economy class booking,
you will notice that in a relevant percentage of the cases, the hidden cost of having
an employee sitting during hours on an airplane with too short pitch and room to
work (which makes him totally unproductive) or even rest (to be fit and prepared for
an important meeting, for example) is higher than the savings we may achieve.
According
to another research conducted by GEBTA in collaboration with Vueling (2013) among
Spanish business travelers, 23% of the individuals polled stated that they always
work during a trip and 64% only do sometimes. When asked about the reasons, Spanish
business travelers indicated that lack of space, “intimacy/or minimum confidentiality”
and inadequate flight timetables, where the main obstacles that hindered them
of working while traveling and that an improvement of travel policies (26%) could
significantly enhance their productivity.
As
in our office, we need certain conditions to continue working and being productive
while we travel. Companies are interested in making the most of our time even
when we are on a trip. The productivity approach is a new driver of cost
savings that companies should not neglect.
Perhaps
we’ll need to review travel policies, adapt them and put "exceptions where it
makes sense", as Yvonne Moya from Unilever tells. Anyway, don’t forget that sometimes
the cheaper option turns out more expensive!
(c) GEBTA,
Marcel Forns. 2014
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