Travel Cost Management Challenges for 2017

Economic uncertainty is leading travel suppliers to review cos


15 December 2016
There have been a number of announcements in recent weeks which point to variations in economic performance which will be creating uncertainty for travel suppliers.
 
While the rail industry’s annual price increases are inevitable, there has been widespread criticism for the 2.3% average increase in fares from January 2017, the biggest increase in three years, and a marked difference to the 0.7% from 2015 to 2016.
 
Other companies are reducing their costs in different ways – BA has recently announced they will stop offering complimentary food on some flights, while also changing their credit card charges from being a flat £5 to being 1% of the ticket value up to a maximum of £20.
 
The hotel industry continues to put out mixed messages, with some reports stating that accommodation prices have dropped in the last quarter of 2016, while food costs are rumoured to be increasing anything by up to 5% in 2017. With increased costs of employment some hotels are doing everything they can to retain business, while others feel they have no choice but to increase their charges.
 
As 2017 looks increasingly to be a year of uncertainty, we would recommend asking the following three questions:
 
  1. As the majority of travel costs are due to people meeting with each other, can alternative ways of meeting such as conference calls be used to reduce travel costs and time spent out of the office?
  2. Where travel is essential, can this be planned ahead to secure better prices and availability so that all participants arrive ready to get the most out of their meeting?
  3. What do travellers like most and least about how travel is arranged for them, and are there any opportunities to reduce costs by encouraging people to think of the cost as if it were their own?
 These questions should not be seen as controversial or challenging - most people appreciate that there are uncertainties ahead in 2017, and will appreciate that a company needs to be careful around its expenditure as much as (if not more than) someone would for their personal finances.
 
Should you want to discuss how PHR could assist in further managing your costs, please do not hesitate to get in touch.
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