The Challenge: When external factors affected corporate travel costs, business critical services group AAB wanted to find a clear way to easily deliver business travel cost savings.
The Solution: Turning to a travel management company that could provide an online booking tool so travellers could access content with clear visibility of cost savings.
Flights, rail travel, hotels – over the last couple of years their prices have risen, plateaued, and then, in some areas, risen again. How can an organisation deliver continual cost-savings across its business travel budget when external factors constantly impact supply chain prices?
Business critical services provider AAB was particularly affected by this challenge when the company experienced a period of rapid growth. Its travel programme developed significantly, with the introduction of new team members, and the need for business travel grew as a result.
The majority of the company’s travel is domestic UK – between Aberdeen, Edinburgh, Glasgow, London and Leeds. There is also a small section of overseas travel, including to Ireland. AAB Executive Assistant to the Chief Executive Katherine Thomson found the biggest challenge to adhering to the travel budget was the price of hotels in those cities.
“In general, the cost of flights between Edinburgh and London have come down slightly. So that’s more manageable, but it’s the price of hotels that catches us. It could sometimes feel uncontrollable,” Thomson explains. “When the company grew quickly last year, we needed to find a travel management company (TMC) who could help us streamline travel bookings. We were also looking for easy-to-use reporting tools. We wanted to make it as straightforward as possible for our travellers to find accommodation at the best price. This would, ultimately, deliver cost-savings. That meant finding a TMC who had the right online booking tool to meet all those requirements.”
TRAVEL POLICY ADOPTION LEADS TO SAVINGS
Onboarding Reed & Mackay in May 2023, Thomson worked with Client Success Manager (CSM) Donald Munro on implementing the TMC’s proprietary online booking hub.
“We were finding that travellers were often booking outside the company’s travel policy. So we wanted to show them how and where they should be booking their accommodation within it,” Thomson adds. “Reed & Mackay’s online portal can demonstrate, in a very visual way, how they can do that.
“A map depicts all the hotels in the area they’re travelling to. These show as red, amber and green, referencing the costs set in our travel policy. This has been an incredibly useful way to stop travellers simply booking wherever they want without considering the price. I now have travellers checking whether they can book to stay at a certain property. This is instead of just going ahead and doing so.”
Munro is now working with Thomson to implement a preferred hotel programme across AAB’s travel. Since Reed & Mackay was onboarded as AAB’s TMC, it has been instrumental in working with certain hotel groups to negotiate the best rates on behalf of AAB. The next step? Laying the foundations for a more developed hotel programme. This will aim to have greater ability to deliver cost savings in the company’s key business travel destinations.
“There is a higher allowance for accommodation in London. However, we’re working together with AAB on what a potential rate cut could look like across the board,” Munro explains.
DELIVERING ADDED VALUE TO BUSINESS TRAVEL
In addition to the financial cost savings obtained from hotel rate negotiations, there have been added savings in other areas from working with Reed & Mackay.
“Reed & Mackay’s online portal is really useful and easy to use,” Thomson says. “We wanted our travellers to book their travel directly on a booking tool. This is where they can see where savings can be made.
“We’ve had 97% online adoption, which is fantastic. Giving the travellers the responsibility for their travel bookings has also saved so much time. This is a real bonus for the company. Less time is spent trying to find the right hotel at the right time for the right cost.”
Furthermore, the monthly reporting and meeting with AAB’s CSM means any issue in travel costs is raised. “Donald flags when there has been anything impacting the budget, so having Reed & Mackay’s reporting side is crucial too,” Thomson adds.
Streamlining costs with online booking tools, plus regular reporting, has enabled AAB to stay within its travel budget. Furthermore, it now has a rich bank of data on employee bookings and travel patterns to be able to confidently set travel budgets for the coming year.
“I really enjoy working with Reed & Mackay,” Thomson says. “Donald understands our business and updates me regularly on where we can find improvements on cost savings, where to find added value, plus market knowledge on what’s driving any price rises. This gives me the confidence to share all our reporting with senior management as I’m able to share the reasons impacting the cost of business travel.”
