Overview

The client is a national electronics retailer with an annual travel spend of almost AUD 2M.

CTM conducted a major review of the company’s travel policy with the aim of reducing travel costs for the business.

Objectives

The key objectives were to design and implement a new travel policy for the client which would reduce total travel expenditure without impacting on the number of trips taken. The key objectives were to:

• implement a new travel policy and approval process to maximise savings.
• achieve a target of AUD 250k in annual savings on travel expenditure
• increase transparency of purchasing behaviour

Challenges

Without a formal travel policy in place the client was unable to accurately monitor and analyse their purchasing behaviour against the company’s actual travel needs. This lack of structure presented CTM with a number of challenges which would ultimately determine their ability to meet the client’s objectives.

These included:

• no formal structure or guidelines for air travel bookings.
• an over reliance on a single preferred airline.
• an unsubstantiated dependence on fully flexible fares based upon a perceived need for travel flexibility.

Solutions

CTM first needed to fully understand the client’s existing purchasing behaviour compared to their actual travel needs. This was achieved by conducting a three month review of booking and travel trends to determine the legitimate need for flexible airfares versus the cost-saving opportunities presented by Best Fare of the Day.

Based upon the findings of the three month trial, CTM was able to:

• Implement a formal ‘open-skies’ travel policy utilising Best Fare of the Day fares across two airline networks.
• Develop a 14-day advanced purchase booking policy for domestic travel to maximise restrictive fare availability.
• Deploy and manage a pre-trip approval process.
• Run fortnightly Corporate Savings Reports to highlight further potential savings per booking.

Results

Within the first three months of implementing the new travel policy, the following cost reductions were achieved:

Travel spend decreased by 21% (AUD 100k) in 3 months

By establishing a needs-driven travel policy based upon actual booking behaviour and trends, the client achieved over AUD 100k in travel savings despite a 10% increase in travel activity. This saving represents 42% of the company’s annual travel savings target during the first quarter of implementation. This result was achieved by reducing the company’s over-reliance on expensive fully-flexible fares by 40% and increasing domestic booking lead-in times.

Open skies policy shifts 50% market share to competitor airline

By implementing a stringent open-skies domestic airline policy, previously 100% dominated by a single airline, the client achieved a 50:50 market share between two airlines, increasing the range of best available airfares, schedules and inclusions.