Foundation Tendriling Vacation Charges

As business journey charges nose upward, providers are recognizing car hire superior cost-management procedures may make a variance

US. company travel charges rocketed to additional than $143 billion in 1994, according to American Express' most recent study on business journey administration. Private-sector businesses expend an believed $2,484 for each staff on travel and entertainment, a seventeen per cent increase over the past 4 a long time.

Company T&E costs, now the third-largest controllable expense behind sales and data-processing costs, are under new scrutiny. Corporations are realizing that even a savings of 1 per cent or two % can translate into millions of dollars added to their bottom line.

Savings of that order are sure to get management's attention, which is a requirement for this type of project. Involvement begins with understanding and evaluating the components of T&E management in order to control and monitor it far more effectively.

Hands-on management includes assigning responsibility for vacation management, implementing a quality-measurement system for travel services used, and writing and distributing a formal travel policy. Only 64 % of U.S. corporations have travel policies.

Even with senior management's support, the road to savings is rocky-only one in three companies has successfully instituted an internal program that will help cut vacation bills, and the myriad aspects of vacation are so overwhelming, most providers don't know where to start. "The industry of journey is based on information," says Steven R. Schoen, founder and CEO of The Global Group Inc. "Until such time as a passenger actually sets foot on the plane, they've [only] been purchasing information."

If that's the case, information technology seems a viable place to hammer out those elusive, but highly sought-after, savings. "Technological innovations in the company travel industry are allowing firms to realize the potential of automation to control and reduce indirect [travel] costs," says Roger H. Ballou, president of the Journey Services Group USA of American Express. "In addition, many companies are embarking on quality programs that include sophisticated process improvement and reengineering efforts designed to substantially improve T&E management processes and reduce indirect costs."