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BBT March/April 2019 cover
March/April 2019

Visible spend ‘is only the tip of the iceberg’

The tip of an iceberg with the true size revealed under water

When it comes to understand the true cost of travel, visible spend is “only the tip of the iceberg”, with many complex factors influencing the final price tag.

This was a warning given to attendees of the Business Travel Show in London by Lina Margolin, head of business solutions, UK, at ground transportation company Gett.

Margolin said there are a number of other costs involved in travel outside of what is spent on air fares, hotel rooms and taxi rides, such as the difficulty predicting any price variance when booking ground transportation.

“A lot of ground transportation companies use dynamic pricing, meaning rates change depending on a number of circumstances and this is often passed on to businesses when their travellers use those services. This can include random factors such as bad weather, road accidents, or public transportation closures and can increase costs by 60 per cent a week. But costs cannot vary this much every week because it’s not sustainable.”

There is also operational complexity to consider, according to Margolin; the extra time it takes an employee to file their expenses, as well as lengthy approval and back-office processes can all add up to an estimated £29 a month for each employee taking four rides per month.

Travel policies can also have an effect on costs if they don’t inspire travellers to stay on piste. Margolin said a corporate policy needs to be transparent in order to show travellers the value of using preferred suppliers or keeping their spend low.

Lastly, Margolin pointed out that corporates also need to consider the cost of their duty of care obligations, GDPR compliance, global travel insurance and so on.

“To optimise spend, companies need to take a more holistic view. They need to be able to predict at least some of their spend because budgets are often set a year in advance. To do this, they need to streamline their operations and develop a more transparent travel policy that allows travellers to make smarter choices when they book.”

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