Travel Management Opportunities for Small & Medium Enterprises

mark-williamsBy Mark Williams, Partner

The primary findings in the recently published 2014 Small & Medium Enterprise (SME) Report indicate there are significant opportunities for SMEs to improve their travel programs. These findings, presented by Business Travel News (BTN), reflect the wide variance in the travel management practices of organizations with airline spend under $12 million annually. BTN conducted a survey receiving input from 101 companies representing the SME market. Not a surprise to anyone was the stated desire of these organizations to contain travel costs. This has, for the past several years, been the primary goal of travel management not only for SME companies, but in the travel management of almost all companies.

SMEs do, however, have travel management challenges which are unique to their size. The first of these is allocating the time of internal personnel to focus on travel management. In general, the smaller the airline spend, the less time spent on management of travel. Most SMEs do not have dedicated travel managers. Second, is gaining the attention of travel suppliers. Airline representatives state it takes a minimum spend of $500,000 annually on a single airline to garner their attention for a corporate discount agreement. Those SME organizations not meeting this threshold are eligible to participate in the airline small business points programs.

While it is difficult for some to gain access to airline corporate discount programs the opportunities to access preferred hotel rates are more easily realized. Hoteliers have changed their approach and are now more receptive to discount agreements with SMEs. It makes sense for the hoteliers. SME rates are naturally higher than those of the big Fortune 500 buyer. The more rooms they can fill with SME business, the higher their average room rate. SME travel managers should look to negotiate chain hotel as well as individual hotel agreements.

There are additional opportunities for SME travel managers in the areas of corporate payment, online booking, ground transportation, and expense systems. Each of these areas should be investigated as part of an overall strategic plan for travel management. In summary, the opportunities for SMEs to improve their travel management programs are significant. Each opportunity should be investigated systematically. This will lead to a better travel program with happier travelers and reduced costs.

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