Category Archives: Travel Policy

Travel management becomes easier with big data! Clarcity Travel & Expense uses big data to streamline your travel management process!

Travel management is better with big data

What’s the deal with big data? Data helps companies negotiate better deals. It shows whether funds are spent wisely. It helps companies reduce costs while still meeting their goals.  Data is at the center of every good travel management program.

Let’s take an example. I’d like to negotiate a reduced hotel rate at a hotel in Phoenix. First, I need to build a list of properties to contact. To do this, I need to know the destinations that my travelers visit in Phoenix. This is easy if all of my travelers are going to my company’s Phoenix office. What if I work for a consulting company with many clients in Phoenix? What do I do if my company has several Phoenix locations? It’s even harder if my travelers are sales people who call on lots of different prospects. The best solution is to record the destination address of each Phoenix trip.

Next, I need to know how many nights my travelers spent at hotels for each destination. This will tell whether my travelers are spending enough to negotiate a rate. Once I have this information, I can create my target markets. For example, I might conclude that I need to negotiate a rate at a hotel in downtown Phoenix, a hotel in Scottsdale, and a hotel at the Phoenix airport.

Finally, I need to know which hotels are good fits for my company’s travel policy. Star ratings and average rates from the most recent year are some help. However, the best data is the actual rates that these hotels were offering when my travelers searched for hotels in Phoenix.  Once I have this information, I’m ready to put together my short list of hotels and send out my RFP.

How does travel management become easier with a travel and expense system?

I can see how powerful this data will be. I’m still not sure how I can capture it all in one place. A cloud travel and expense system can help:

1. A travel management  system will show how many nights my travelers spent in hotels in the most recent year for each location.  It will also show prices offered by each hotel.
2. A expense system with mobile mileage tracking can quickly capture the street address of each traveler’s destination.
3. A strong travel policy will make sure that travelers use both systems.

Talk to Clarcity to learn more.

A travel request can help local governments spend their travel dollars wisely. Clarcity Travel & Expense can help with the process!

A travel request helps governments spend tax dollars wisely

Let’s face it. Budgets are tight for schools and local governments. All types of spending are coming under more scrutiny. Taxpayer funded travel is an area that gets more attention than most. School and local government travel is often for conferences and other fun events that may not have enough business value. A good travel request process will make sure that only necessary travel is approved.

We all know that some business trips are routine and others are fun. The typical routine trip is a visit to the company’s office in another city or to a client’s office. These trips are full of attending meetings, making presentations, and other things that people normally do day to day. In short, employees don’t have an incentive to take these trips unless they believe that there is real business need.

Then there are conferences. Conferences may feature free concerts, gourmet meals, and celebrity speeches. Networking opportunities are a staple of conferences. They are typically held in major cities with lots of free time to explore. Orlando, Las Vegas, and Chicago were the most popular conference destinations in 2015. Employees have an incentive to attend conferences even when there is little business value.

The 2010 GSA conference in Las Vegas became a symbol of government waste. The $75,000 bicycle building exercise and $44 per person breakfast made national news. Newspapers often report on travel dollars wasted by local governments.  This conference of city leaders cost taxpayers of an Arizona town almost $2700 per person. The Freedom of Information Act gave the paper access to every dollar spent. Even a $7.42 Uber ride was mentioned. The city had no travel policy or travel request process. No one could justify what value the conference provided.

How can local governments incorporate a travel request procedure?

Schools and local governments can keep travel spending in check a few easy steps:

1. Require employees to make a formal travel request. The business value of the travel should be clearly explained. The travel request should be reviewed by multiple managers.
2. Store the travel request in perpetuity. A corporate travel system can make sure that proper records are kept.
3. Check that final expenses do not exceed the request. An integrated expense management solution makes this process easy.

Let Clarcity show you how easy a travel request can be.

Rewards offered by credit cards tempt business travelers to overspend. A good travel policy helps curb this disturbing trend.

A good travel policy stops bad incentives from credit cards

Business travelers are given many incentives to spend too much. Nowhere is this more true than with credit card rewards. An effective travel policy is essential to tilt the scale in the direction of savings.

It’s no surprise that credit card rewards encourage people to spend more. Credit card companies offer a variety of rewards beyond cash back. Frequent flyer miles and other travel rewards are the most common. One experiment showed that consumers were willing to pay twice as much for sports tickets when a credit card was accepted. More typically, consumers are willing to pay 5% to 10% more when using a credit card. However, a typical reward is worth just 1% of the price of the purchase. This illustrates how cards encourage people to make decisions that are not in their best interest.

The credit card rewards problem is much worse for business travel. Employees often choose an airline or hotel where their credit card gives bonus points even if it is more expensive. They are bombarded with offers for upgrade packages which offer modest benefits but include extra rewards. These rewards are compounded when purchased with their rewards credit card.

Rewards are front and center on employees minds as they travel. The miles and points they are earning from their flights and hotels serves  as a subtle reminder to spend more on meals and entertainment that they can charge to their credit card. Employees have little incentive to save money because the company is picking up the tab.

Can a travel policy curb this behavior?

Here are some strategies a travel manager can use to fight back:

  1.  Require employees to use a corporate credit card. Corporate cards pay cash back to the company instead of the employee.
  2. Use a ghost card to book travel. A ghost card is a single credit card used to pay for travel for many employees. The ghost card is perfect for employees who don’t travel often enough to need their own corporate credit card.
  3. Develop an effective travel policy. Require travelers to book with the lowest cost vendors. Set sensible limits on meals and entertainment.
  4. Notify a manager when travel is reserved outside of the travel policy.

Keeping track of corporate credit cards and enforcing a travel policy used to be a lot of work. Today. an integrated travel and expense system automates the process. Contact us and we will show you how!

Corporate travel becomes a lot cheaper with wholesale hotel rates!

Corporate travel is cheaper with wholesale hotel rates

Corporate travel involves a lot of hotel stays! At some point, all hotels have more rooms than they can sell through their own web site or call center. Hotels often turn to wholesalers to sell these rooms.  Hotel wholesalers are independent companies who buy rooms in bulk and re-sell them to budget conscious travelers. The largest wholesalers sell rooms directly to travelers on their web sites. Expedia and Priceline are well known examples. Hotels require these wholesalers to abide by strict contracts. In particular, they are not allowed to offer a room on their web site at a lower price than the hotel is offering on its web site.

Some wholesalers sell rooms through tour operators and travel agencies. Agencies are allowed to offer these rooms at much lower prices than the hotel is offering on its web site. In fact, a travel agent can often offer a room for 40% less than the hotel. Agencies cannot publish these rates on a web site that is available to the general public. Instead, travelers must call agents over the phone. Agents then make the reservations using private web sites protected by passwords.

How to use wholesale hotel rates for corporate travel?

Agencies know that they are allowed to offer wholesale rates to corporate travel customers. Travel managers find the savings very appealing. Travelers stay at the same quality hotel.  However, corporations rely on online booking tools to make most of their reservations. These tools:

1. Enforce their travel policy.
2. Access their negotiated rates.
3. Show travel managers how funds are being spent.

The booking tools supported by travel agencies rely on systems which are decades old and do not have access to the wholesale rates. Companies looking for greater savings should find a travel solution which can:

1. Show wholesale, negotiated, and public rates in one search.
2. Show whether each rate complies with the organization’s travel policy.
3. Direct the traveler to choose the lowest rate which meets the business needs.

Finding this solution means looking at a modern alternative to a travel agency. Contact us to find out more!

Travel rewards from airlines present unforeseen challenges!

Travel rewards from airlines present unforeseen challenges!

Big changes have come to airline frequent flyer programs in the past five years. Southwest Airlines was the first to change its travel rewards program, known as Rapid Rewards program. In 2011, Southwest began awarding points based on the cost of each ticket rather than the number of flights. Southwest also began offering additional points to travelers purchasing refundable fares and to travelers who fly often enough to be in its A-List elite programDelta and United mimicked Southwest’s changes in 2015, awarding travel rewards (miles) based on the cost of the ticket and the traveler’s elite status rather than based on the distance of the flight. American Airlines announced that similar changes to its AAdvantage program will take effect in the summer of 2016.

What impact do travel rewards from airlines have on a corporate travel program?

Are these changes good news for a corporate travel program? In short, no. They incentivize the behaviors that the travel policy is designed to avoid. Everyone knows that airfares usually rise closer to the date of departure. In fact, a study revealed that tickets sold one week before departure are 30% more expensive than they were two weeks prior. Tickets sold a few days before departure are often more than twice as expensive. The new programs encourage business travelers to wait to the last minute to buy their ticket so that they earn the most miles by paying the highest price.

Elite status has always provided an incentive for the business traveler to choose their flights based on the airline rather than the price.  However, the bonus miles and points take this perverse incentive to a new level.

How can corporate travel managers curb this trend?

Corporate travel managers can fight back with a few powerful tools.

  1. Require travelers to choose the flight option with the lowest logical fare. An online booking tool with a rules engine can determine which flights are “logical” based on departure and landing times, duration, and number of stops.
  2. Require travelers who make last minute bookings to justify them with a written explanation. The explanation can be captured using your corporate travel system when the reservation is made.
  3. Notify travelers with the most frequent policy violations. An integrated travel and expense solution can quickly show you who these people are.
  4. Run your own travel rewards program. Travelers who choose the least expensive options earn the most points.

Learn more about how Clarcity can get your corporate travel program on the right track to saving.

Travel rules are effective when they use real time hotel rates!

Travel rules are effective when they use real time hotel rates!

Everyone knows that hotel rates vary by market, season and when the room was booked. However, no one would describe hotel pricing as intuitive. Take the San Francisco market. The federal government estimates that the median rate for October of 2016 will be $250. Travel rules applied by government agencies will reflect this amount. However, a search for hotels on October 5th in a corporate travel system returns a median hotel rate of $409.

Travel rules will only be effective if an organization uses real time hotel rates.

Travel rules will only be effective if an organization uses real time hotel rates.

The rate is high because a very large conference  will be held on this day. In fact, there are more people attending this conference than there are hotel rooms in San Francisco.

Why are traditional travel rules unfair?

However, a hotel reserved at this rate would violate your typical travel rules. Hotel rates in a traditional travel policy are based on average prices in the market and month of the year. They do not take into account large conferences, days of the week, sub-market, length of stay, advance booking time, and other factors which have a significant impact on room rates. As a result, the company may not reimburse the employee for the full cost of the hotel.

Similarly, most managers reviewing an expense report for this hotel stay will question the cost. They may not know that the conference took place or how much impact it had on hotel prices. They don’t have time to research hotel costs on different web sites. Even if they did, most expenses are reviewed after the trip was completed and hotels don’t show rates for nights in the past. The manager may conclude that the employee didn’t use travel funds responsibly.

What can you do to address this situation?

A few common sense steps and the right travel software can solve this conundrum.

  • Set a travel policy based on the median rate in the market rather than a flat rate per night.
  • Use a travel booking tool that calculates the median rate and shows which hotels are out of policy.
  • Have the travel system notify a manger when a trip is booked. Trips which are too expensive can be cancelled without penalty.
  • Show the expense approver the rates available at the time that the booking was made. This gives the approver enough information to decide whether the travel funds were spent wisely.

Contact us to learn more about creating the right hotel policies.

Ghost cards simplify travel payments!

Ghost cards simplify travel payments!

Deciding how to pay for corporate travel can feel like being stuck between a rock and a hard place. Corporate credit cards make sense for senior managers and other frequent travelers. However, corporate credit cards are not good options for employees who travel less than once a quarter. They carry the risk of loss or misuse. They also can’t be used by independent contractors or job candidates.

Employees who charge travel to their personal cards can be stuck carrying a large balance until they are reimbursed. In such instances, the company also misses out on corporate card rebates. These rebates can be as high as 1.5% of spending.

How do ghost cards work?

Ghost cards make corporate travel playfully simple!

A ghost card represents the best of both worlds. It is a single credit card that is used to pay for travel for a number of employees. Here is how a ghost card works.

  1. A travel manager saves the ghost card in the organization’s online travel system.
  2. The travel system enables the manager to control which employees have permission to use the card. The manager can set the type of travel (flight, hotel, and rental car) that can be purchased by each employee.
  3. Employees purchase their travel within the online system. The system automatically submits the card details. The employees never see the full card number.

Will you get a huge credit card bill and have no idea who spent what and why? Not so fast. An online travel system with an integrated expense management tool makes the process a breeze. Here is how it works.

  • Commercial credit cards provide electronic statements which include ticket numbers, hotel identifiers, renter names and destinations.
  • The travel system knows which employee made each reservation by matching this data to details captured at the time of booking.

The expense system lets employees assign cost centers and add receipts to ghost card charges. Explanations can be required for bookings that fall outside of the travel policy. Managers review and approve all charges.

Clarcity Travel & Expense lets you manage your ghost cards. Request a demo and we will show you how!

Negotiated hotel rates helps you stretch your travel dollar!

Negotiated hotel rates make travel policies more effective!

Negotiated hotel rates are one of the most powerful ways to save money on corporate travel. These rates may save companies anywhere between 20% to 50% on their hotel expenses. In fact, corporate negotiated rates represent almost 30% of US lodging industry revenue.

It is a common misconception that only large corporations have the market power to negotiate a lower rate with hotels. On the contrary, companies that spend as little as $5000 in a particular market can be successful in negotiating a preferred rate for themselves.

How to get access to negotiated hotel rates?

The following steps will help you negotiate a lower rate.

  1. Identify the markets where your employees travel to frequently.
  2. Calculate the total number of room nights you expect to spend in each market. These figures may be monthly, quarterly or yearly.
  3. Locate the destinations (such as offices, conference centers, etc.) in each market where your employees are traveling to. Find hotels that are convenient for the business purpose.
  4. Send a “request for proposal” to the sales manager at each property. This is also known as an RFP, for short.
  5. Review every RFP and then select preferred hotels.
  6. Put a process in place to ensure that your employees make reservations at the said property. You will also need to ensure that they utilize the negotiated rate.

Does this sound like a lot of work? Of course it does! How will you gather all the data? Collating this information can be very hard for companies using antiquated systems and processes. However, organizations using the right software can access the data with a simple click.

How many room nights did my company use while traveling to destinations within three miles of downtown Chicago in 2015? Click.
What was the average room rate that we paid? Click.
What were the rates offered by other hotels of similar quality? Click.

How to ensure that your employees take advantage of negotiated hotel rates?

How do you make sure that your travelers actually book rooms at the hotels you have chosen? After all, travelers  have every incentive to stay at hotels that give them the most miles or reward points.

Luckily, an effective travel policy and the right software makes the process work. With the right tools, you will be empowered to do the following.

  • Write a travel policy which requires your employees to book hotels through your travel system. Use an integrated expense system to flag hotel reservations booked through other channels for review.
  • Configure your travel system to highlight negotiated hotel rates at the top of the search results.
  • Alert managers by email when a traveler chooses a rate that is more expensive than the negotiated rate. Configure your expense system to flag such reservations for further review.

We let you do all of the above and a lot more. Feel free to contact us right away to request a demo.

A travel policy should have clear rules, not vague guidelines!

Business travelers should use the same care for spending company funds that they would use with their own money. This should be the basic premise for an effective travel policy. However, we have seen travel policies so vague that they allow policy violations. At times, they may even encourage business travelers to spend more than they ever would with their own money!

A case in point would be this travel policy from a prominent university. It states that airline fees for services including “convenient or early boarding, extended legroom, seat location, baggage, in-flight meals, [and] Wi-Fi service should be incurred responsibly and should not be excessive.” This vague rule leaves the traveler to determine what is responsible and what is excessive. It provides no guidance regarding this.

Seat 24J would violate an effective travel policy.

Seat 24J would violate an effective travel policy.

The seat map above shows an aisle seat in Row 24 which costs $75 and an aisle seat in Row 27 which has no fee. Does a seat on Row 24 provide more legroom, free drinks, priority boarding, or other perks when compared to Row 27? No, it does not! It just gives the traveler more miles or points and lets him leave the plane a few seconds earlier. Who is paying the extra $75? Employers with vague travel policies!

How can the above travel policy be more effective?

Making a travel policy more successful is easier than one may realize. An effective rule would say, “Travelers may spend up to $10 for each hour of flight time to purchase a window or aisle seat when no window or aisle seats are otherwise available.” Such a rule does the following.

  • It balances the comfort of the traveler with the need to spend the organization’s travel funds responsibly.
  • It clearly demarcates expenses that are acceptable from those that are not.

A corporate travel booking solution can tell employees whether they may purchase seats as they view the seat map! Such tools take into account the following.

  • The duration of the flight.
  • The availability of aisle and window seats.

Adding the said rule to the online booking solution is important because it ensures that travelers do not need to commit the rule to memory. However, they cannot claim ignorance of the travel policy after they have purchased their ticket either.