Lonesome traveler: how can individuals and small firms save on travel costs?

Travel can quickly add up to a major expense. Most companies are neither large enough nor coordinated enough to have in-house travel planners. So the burden of work -- and the responsibility for cost-saving -- falls to travel agents.

Before a company can begin to select an agency, it needs to answer some basic questions:

* How many people travel on a consistent basis?

* If the company has branch offices, how many travel out of each office?

* What are the company's primary destinations?

* Does the company send staff to conventions, meetings or conferences?

* What is the company's annual travel budget?

* How much was expended last year on travel?

* Does the company have a written corporate travel policy?

* What cost-cutting programs does the company currently have?

* What corporate rate programs does it utilize?

* Does the present system provide management reports which allow the company to monitor adherence to corporate travel policy?

* Has the company been supplied with 24 hour, 800 service for en route booking changes and emergency assistance?

* Does the company have incentive programs?

* Does it provide leisure travel programs for employees?

Large companies with in-house travel services departments can monitor company travel trends which will results in lower average ticket prices and hotel rates. They can also supply important vendor information which can be used as a negotiating tool to obtain favorable contracts.

In recent months many negotiated airfare contracts have been canceled because of airline restructuring programs. However, companies whose corporate air volume was between $15 million and $30 million were able to negotiate about 60 percent off their airfares.

Many of the hotel chains will offer corporate hotel rates if a company can guarantee as least 1,500 bed nights a year. Some major chains have tiered, price-preferred programs which essentially offer volume discounts -- the more people a company billets with a particular chain, the lower the cost of each room. In addition, hotel chains will offer large incentives if the company can demonstrate continued volume.

Most companies at this level usually have a travel manager who negotiates with vendors, but such firms also need a travel agency that can provide an in-house facility including ticket printer, CRT, back office accounting system and a reservationist.

Smaller firms get squeezed

Medium size companies have less negotiating power. These firms get caught in the middle -- while trying to save money, they pay more for travel expenditures, thus their travel budgets are proportionally higher. The medium size company needs all the usual corporate amenities offered by many of the small and medium size travel agencies, such as management reports including destination analyses, 800 emergency services and a good corporate hotel program.

If a company's annual travel budget is between $500,000 and $1 million and the company has many branch offices, a Request for Proposal might be necessary, However, RFPs are very time consuming and many firms with a large travel budget may not benefit from the type of agency that is willing to respond to an RFP.

Individual travelers

Today's individual corporate executives have unique needs of their own. Most important to the corporate traveler is on-time reliability. The business person who has scheduled meetings out of town is relying on an airline to arrive on time.

Most corporate travelers belong to frequent flyer programs, and by consolidating their air miles they can earn free trips and upgrade coupons. But in today's recessionary market, airlines have tightened their upgrade policies, and travelers need to keep up with changes and restrictions to avoid disappointment.

Airlines have also become more sophisticated with their frequent flyer programs. To entice the business traveler, many airlines have created levels of membership status, that allow for automatic space available upgrade up to three days in advance. Other upgrade options include booklets that can be purchased for approximately $100 per coupon.

Corporate travelers who travel frequently often choose to consolidate their air travel with one or two carriers. When considering which airlines to consolidate, it's important to consider the territory to be traveled. Each airline routes its planes in and out of its hub, and this can be convenient or inconvenient depending on where a traveler's most frequent destinations lie.

For example if a company manufactures in the Orient and has offices in Boston, New York, Dallas, and London, it might choose United Airlines or American Airlines, both of which service all these markets. Or if a sales person's territory is the southwestern United States, a regional airline such as America West might be most convenient.

Whether traveling for a small or mid-size company, or flying solo, a business traveler needs personalized service. The franchise networks can help individual travelers by supplying many of the services usually only available to larger companies. Free services include 800 emergency service, lost luggage control, management reports, and free ticket delivery. Many of these franchise networks also offer free upgrades because they work with preferred suppliers, another service usually offered only to large companies.

Unique needs

Specialized travel agencies also fill a niche. The needs of their clients can be unique indeed: when one of the L.A. Lakers was on the road and realized he had forgotten his athletic shoes, a specialized travel agency came to the rescue. Since shoes of such an unusual size were not available locally, the agency issued a first class airline ticket to fly the forgotten shoes to the athlete, ensuring that the shoes had a first class seat and special treatment.

The needs of particular industries can also be highly specialized. Here in Los Angeles, for example, several agencies specialize in entertainment industry travel. These agencies must be aware that when a production company is filming on location for example, all Screen Actors Guild members must fly first class, but they must also remember that airlines do not want to give up a large majority of their first class seats on any one flight for fear of a "no-show" by the whole group. The agent also must arrange transportation for cameras, sound, lighting and other equipment and documentation for international cargo.

A company with special needs must ask very specific questions of any agency with which it considers contracting for travel services.

Sally Starr is vice president of Sales & Marketing for Uniglobe Five Star Travel.