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Fixed travel budget: The model of the future?

August 02, 2012 | Hotel Marketing

With an ever-increasing eye towards ensuring traveler satisfaction - and an ever-increasing awareness that new mobile solutions are beckoning corporate travelers to leave traditional booking tools behind – corporate travel managers are exploring new approaches to travel management.

One such approach is that of a fixed budget per trip, an idea that gained attention when Google successfully implemented this method in 2008. While the details can be executed in various ways, the core idea is that travelers are provided with a fixed budget per trip, based on city pairs and trip length, rather than be required to use a specific Travel Management Company (TMC), booking tool or preferred suppliers. In the Google model, travelers are rewarded if they come in under budget and can apply those leftover funds to upgrade later trips or donate at the end of the year.

To gauge the potential of such an approach, AirPlus International surveyed 133 corporate travel managers about their familiarity with and thoughts about such an approach, including whether or not they would consider it for their own program.

The majority of travel managers surveyed said they were at least somewhat familiar with the concept, with 20 percent very familiar, 23 percent familiar and 35 percent somewhat familiar. Only 21 percent stated they were not at all familiar with it.

When asked about their beliefs about such a system, the numbers were consistently higher when it came to concerns compared to perceived benefits. However, those concerns were significantly lower among the travel managers who said they were very familiar with the concept, indicating they have already given thought to how to proactively structure such a program to avoid these kinds of issues. The only exception was concerns about data capture – 78 percent of those very familiar with the concept had such a concern, compared to 77 percent of all the travel managers.

Get the full story at AirPlus

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