Moving along

By Fred Koury

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With the economy seemingly getting worse by the day, your initial inclination might be to eliminate all air travel by employees.

Why?

Because airfare usually makes up the majority of travel expenses.

But rest assured, if you aren’t sending your people out to meet face to face with key customers, one of your competitors is. Business is all about relationships. We live in a high-tech, low-touch society where too much is done by e-mail and fax instead of handshakes and lunch.

Air travel is an important part of building relationships with key customers and vendors. People do business with people they like, and the best way to make sure they like you and your company is to keep building those relationships in person.

The challenge is dealing with the costs associated with that strategy. The only sure thing is that there isn’t a one-size-fits-all approach. A lot depends on how much travel you and your employees are doing and what your comfort level is with the various ways of booking travel.

According to a national Smart Business survey of top executives, 77 percent say that employees handle their own travel arrangements. The rest use either an internal resource or a third-party company to deal with all travel bookings.

Each method has its own strengths and weaknesses. For example, having employees handle their own travel arrangements is probably the most convenient for everyone, but it requires a well-defined travel policy and is the most difficult to oversee. Using a third-party company to handle all your travel can provide consistency and a high level of service, but it comes with a price.

Figuring out the best way to manage your company’s expenses depends on the usual suspects: price versus service. If your main focus is price, there are plenty of ways to look for a good deal — and there’s always a better deal out there if you look hard enough. Online services allow you to compare fares from different airlines and some offer Internet specials, but don’t be afraid to have someone pick up the phone and call the airlines directly. Often, you can negotiate a better deal that way. There are also the special rewards and points you can accumulate using the same airline or your credit card. If you are doing it from a corporate level, you can use the rewards to earn free trips for your people that need to travel to meet with customers. If employees are booking travel themselves and being reimbursed, these points become a subtle perk that can contribute to job satisfaction.

But if you prefer not to bother with the details or if the sheer volume of travel your company does makes it difficult to oversee, then a travel management company might be the way to go. Travel management companies already have relationships with the providers and can often use their volume to get better deals than you could get yourself. These companies also provide a point of contact that can help you if you get stranded somewhere or have a problem with one of the airlines. The question is whether the higher level of service is worth the extra cost to you.

The other consideration is how much oversight you want of your travel expenses. Surveys show that employees just aren’t as careful with company travel funds as we would like. A travel management company can help everyone stick to the same rules when it comes to upgrades or taking a later flight to save money. By consolidating decision-making to one person, it helps keep everyone flying under the same rules and helps keep your company on budget.

With airlines cutting the number of overall flights and with declining economic conditions, the cost of airfare is most likely going to continue to be a major expense for every business traveler. The key is to work on managing the cost in a way that makes the most sense for your situation instead of eliminating business travel altogether.

FRED KOURY is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or fkoury@sbnonline.com.