Travel management plays a significant financial role and can
contribute to a corporation's shareholder value. Since the cost
of travel is a corporation's second or third largest controllable
expense, having experienced travel management professionals manage
and negotiate travel-related services provides measurable financial
benefits to the corporation. In addition, monitoring and analyzing
travel expenditures is essential for realizing cost-cutting opportunities.
In 2002, the NBTA Foundation conducted a survey of nearly 250
travel management professionals throughout the United States.
The survey found that 33% of respondents reported to the Finance
Department in their companies, more than to any other department,
illustrating how strategically important travel management is
to a corporation's overall financial strategy.
Traditionally, the corporate travel department works with each
department to determine its travel needs and develop its travel
budget, based on current spending and planned development. Then,
with the consolidated travel needs of the corporation, travel
managers negotiate discounts and preferred rates with travel
suppliers based on their company-wide travel needs. Corporate
travel management professionals are the essential elements to
managing the negotiation and review of vendor relationships.
By negotiating discounts up front with selected travel providers
based on volume and price, companies can maximize the value of
their travel spending by fulfilling more of their travel needs
through these preferred vendors and negotiated agreements.
In the dynamics that now define the environment of corporate
travel management, more corporations have developed preferred
relationships with travel suppliers and have moved to negotiate
direct discounts with airlines based on volume. Over 90% of NBTA
members have negotiated agreements with one or more air carriers
and over 87% of NBTA member companies have sought to negotiate
with major airlines as a means to address rising airfares. Relationships
are key to successful travel management.
The impact of cost avoidance and what can be accomplished under
an effective travel manager is illustrated by an example given
by one analyst, that $1.5 million in costs saved due to control
of travel means $23.5M less in product sales that a company would
have to realize in order to make up the difference. This can
be viewed as a return on investment of 17%, contributing substantially
to shareholder value. It puts travel management in a very different