To assess how their own travel costs, policies and performance metrics stack up, many companies have long sought ways to benchmark against others.
More than half of companies recently surveyed for ARC by The BTN Group said they benchmark against other companies in their industry or others served by their travel management company.
About 45 percent said they benchmark against other companies or organizations with similar spend or travel patterns, while 28 percent benchmark against other companies or organizations in their geographic area. Nearly one-quarter said they don’t benchmark externally.
Airfares were the most frequently benchmarked cost component on a quarterly basis, as 36 percent of respondents said they compare such figures, while 27 percent compare airfare costs of peers on an “as needed” basis.
Airfares were the most frequently benchmarked cost component on a quarterly basis.
That’s not surprising, as air costs are usually the largest component of travel and entertainment spending (typically 42 percent or more of the budget). In an earlier survey, more than three out of five respondents said their organizations had airline contracts with between one and three domestic airline carriers, and 15 percent of respondents reported airline contracts with four or more domestic airline partners as they sought to best leverage their
buying power and travel needs.
In that earlier survey, more than seven out of 10 respondents said they routinely measured both average ticket price, as well as average advance purchase days as key performance indicators to evaluate the effectiveness of their travel programs.
Hotel and Car Rental Benchmarking
On hotel costs—usually the second largest T&E cost component—about 32 percent of respondents said they benchmark on a quarterly basis, while 29 percent said they do so annually and 24 percent “as needed.” Nearly 31 percent of respondents said they benchmark car rental costs annually, while 28 percent benchmark that category as needed and 27 percent on a quarterly basis.
Why They Benchmark
For nearly 75 percent of respondents, benchmarking is done “to ensure that travel is being managed as effectively and efficiently as possible.” More than 70 percent benchmark to compare costs, while 69 percent said they benchmark to identify savings or missed opportunities.
The Rise of Benchmarking
Across all respondents, external benchmarking has become slightly more important to their senior management than it was a year ago. But for about 20 percent of respondents, benchmarking against external companies has become “significantly more important” to their management.
The growing importance of benchmarking is in line with other key trends reported in both ARC surveys, as well as others conducted by The BTN Group this year. Travel managers said they report air data to procurement, finance and expense managers, senior management and business unit budget owners more frequently than a year ago on a monthly basis.
Corporate travel decision-makers report increased pressure to deliver savings, as well as value to their travelers, managers and other key stakeholders. Benchmarking is a way to compare one’s own performance metrics against others to show both the value delivered from the existing program as well as opportunities for future improvements.
In the latest ARC survey on benchmarking, 143 travel managers, buyers or other decision-makers were surveyed by The BTN Group in July and August 2016. Asked to indicate their organization’s 2015 air volume, 19 percent of respondents said $50 million or more, 20 percent reported $15 million to $49.9 million, 18 percent indicated $5 million to $14.9 million, 27 percent said $1 million to $4.9 million and the remaining 16 percent said less than $1 million.
Benchmarking is a way to compare one’s own performance metrics against others to show both the value delivered from the existing program as well as opportunities for future improvements.
The Highest Quality Data
With ARC data solutions, corporate travel programs have the ability to gain unique insights into their travel programs, as well as benchmark with similarly sized organizations and across the corporate travel industry as a whole. Leveraging ARC’s unbiased and comprehensive settled ticketing database, ARC data solutions allow travel manager, procurement teams and their executives to better visualize, analyze and monitor their air travel programs with insights across spend, policy, O&Ds and airlines.
