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11 January 2011 | Angeline Albert
Almost half of the UK spend on business travel is unmanaged, resulting in £1.5 billion a year in potential savings lost, industry experts report.
Business Travel & Meetings Show’s event director David Chapple said SMEs are wasting tens of thousands of pounds every year because staff book their own business travel.
Chapple said SMEs’ unstructured and chaotic approach to buying business travel makes them the biggest travel spend losers.
The annual UK spend on business travel is around £24 billion according to the Institute of Travel & Meetings. The Guild of Travel Management Companies, which represents travel management companies, said an estimated £10 billion of this is unmanaged.
With the average ‘managed business travel’ deal reaping a 10-15 per cent saving, Chapple said up to £1.5 billion a year in potential savings is being lost as a result of the £10 billion of unmanaged spend.
Referring to billable hours lost, Chapple said: “Travellers who insist on booking their own business trips are almost certainly wasting the company unnecessary time. Let’s assume the guy travelling to Washington earns £60,000. That morning’s searching just cost £128.”
Chapple went on to say that £51,200 of billable hours would be wasted if 20 employees on this salary each booked 20 trips a year independently.
He said: “I fully understand that SMEs are operating in a price-driven environment and that they may not have the buying power to negotiate discounts. But that doesn’t mean they can’t buy smarter, save the company time and effort, and enjoy increased benefits and rewards from suppliers.”
Chapple said such companies needed to appoint a buyer for business travel and introduce a company-wide travel policy to control spending and reporting.
The Business Travel & Meetings Show takes place on 8-9 February 2011 in London for business travel suppliers to promote their services to business travel buyers in Europe.