Reduce travel costs: how can my organization work with airline companies, major hotel chains, and rental car agencies on getting reduced rates etc based on volume?

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Companies handle travel cost management in a variety of ways (including not addressing it at all). Some use in-house travel specialists to handle it; some outsource to a travel specialist (agent), etc. See TAPN's T&E survey, which includes data on travel arrangement responsibility.

Executives often have their assistants handle all their travel arrangements. In smaller companies, arranging travel could fall on the office manager or the individual themselves. If you have one person handling all the arrangements, you add a bit of control to the process. For example, you can miss out on credits on airline tickets not used because they were booked by one person and it was never relayed to the next person that the credit was there until after it had already expired.

If your FE's are going to book their own travel, you need to make sure that they know who the negotiated discounts are with and there needs to be some type of system in place to make sure that everyone is using the correct companies for air, rental cars, and hotels. Otherwise, when it comes time to renew contracts, you may find out that you lose some of your discounts because people haven't been using them. If making or negotiating travel arrangements is up to you, here are some suggestions to consider.

Rental Cars

Rental cars offer plenty of discounts that most people don't know about. First, if your company has the AMEX platinum card, Hertz will waive their Hertz Gold Card membership fee. Typically between Hertz & Avis, Avis will have lower prices. However, Hertz apparently has better service. Even a very small company can get a discounted rate with Hertz that is equal to about 10% at most locations. (For example, one small company tells us their rate is lower than Delta's frequent flyer negotiated rate 9 out of 10 times). Ten percent is not a hard discount to get.if you are renting cars quite a bit, you should definitely negotiate a higher discount. Hertz also has a President's level on their Gold Club reserved for those that have either 40 or more rentals per year or meet other criteria. We are not sure if they look at that corporate wide or per individual but it would definitely be something to negotiate on. Other rental companies will want to be competitive.

To negotiate with the rental car companies, try to have the following information available before you call them:

  • Number of travelers
  • Total dollars spent on rental cars, broken out by agency (again would definitely have this for the last year and would try to have it for the last 3 years)
  • Total number of rental days
  • Cities/Airports cars rented from most

One thing you'll want in any contract is that your employees are not charged for extra insurance, they have unlimited miles, and there are no drop-off charges.

Hotels

To negotiate with hotels, you'll need to know what chain they belong to. It definitely pays to join their member programs, even if there is an annual fee (You can get better rates by asking for a manager and telling them that the traveler is an "ambassador member," etc.) If you have a large hotel budget, you may be able to get the member program annual fees waived.

If some of the FE's are traveling to smaller cities where there aren't any of the larger chains of hotels, then you'll need to call the hotel/motel directly and ask to speak to whoever can negotiate discounted rates. Chances are in the smaller towns, the hotels will have a personal relationship with the people who are frequently staying there. For the trips where a large customer is involved there's a good chance that the customer will have negotiated rates with the local hotels that will be lower than any discounts you might negotiate.

Airlines

For air travel, get the following information together and then call each of the airlines and see what they are willing to do:

  • Number of travelers
  • Total $'s spent on air travel broken out by airline (start with last year but also have data for the last 3 years)
  • Total number of last minute trips scheduled
  • Cities traveled to/from most

Once you talk to all the airlines (or the ones you'd like to do business with) narrow it down to the top 2 - go back to each of them and get a final offer from them. Also, if your FE's have a AAA membership and they book their own travel, then rental companies and hotels offer discounted rates for members of AAA.

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