I couldn’t write this story without extending my sincerest gratitude to all of my industry colleagues, friends and strangers alike, who have made this one of the greatest industries to work in and the most resilient. It may take time but the comeback, I believe, will be greater than ever, and that is PHAT!
It is also times like these that we can take inventory of our managed travel programs. This month we take a look at new ways to use data to help manage the ground transportation category.
We often tend to look at our spend in this category through the lens of the total cost. But the time has come when we should be looking at these costs in the context of how they fit within our entire program. Think: How much does it actually cost our companies to get an employee from point A to B? Which categories are the most effective means for transporting our travelers?
The first step we need to take is to get a better understanding of the spend in each particular area that falls under ground transportation; mileage reimbursement, car rental, ridesharing, black car, taxi, parking and even public transportation. Factoring in all these elements can make this category very challenging. Buyers need to think about how better to capture more details on these expenses.
It would be ideal to start by modifying expense categories to ensure that you are capturing more detailed data. For example, taxi spend: Have the traveler include # of miles or start and end points. If you participate in ridesharing business programs, use that reportable data. Car rental: Work with your providers to give you mileage details on your rentals, same with black car. For the tougher more error-prone categories, you may need to make some assumptions.
Take a Closer Look
Once you are able to capture as much data as possible on the mileage, this will enable you to calculate the cost per mile. And more accurate cost-per-mile data is what will help you determine the best means of transportation for the different areas where your teams travel.
Utilizing the cost per mile information provides the baseline that allows travel buyers the ability to rethink their policy for ground transportation utilization. The first step is to break down the different means of transportation. This should also include the cost per mile of airfare as well.
Second step is to look at number of miles in each of the categories. For example: Car rental average miles driven = X, ridesharing = Y, airfare = Z, etc. Taking this data and analyzing it based on distance and cost per mile, a buyer can set the right policies and determine the best mix of the different ground transportation categories.
Buyers also need to account for parking costs, fuel costs, overall transportation time (human costs) – and of course convenience also plays into the equation. By bundling all of these hard and soft costs, buyers can uncover the tipping points for each category.
This will provide buyers the ability to answer the questions like, should my traveler drive or fly? Is it better to rent a car for one day versus using a personal car? Is it better to use ridesharing versus a taxi or car rental?
In many travel programs we are always seeking new ways to drive additional savings. Utilizing this type of Phat Data could certainly highlight new opportunities to drive down costs, or to validate that the ground transportation category is being effectively managed.
Take No Chances
But remember, cost isn’t everything. When thinking about policy decisions around ground transportation, another aspect that should be considered is the risk factor; how do some of these policy recommendations increase or decrease the company’s liability? Certainly, you don’t want to make a decision that saves two cents a mile if it increases your liability by ten cents a mile.
Leveraging this information will also assist you in your sourcing exercises. It is a great way to be able to compare apples to apples as you consider offerings from multiple suppliers. Again, bundling in all the costs and then bringing it down to the cost per mile is a more accurate view of the individual offerings.
In the car rental category specifically, it can really help determine whether you go with Primary, Co-Primary, Secondary suppliers because it casts a larger net over the offers and provide buyers more precise insight, allowing them to make the most educated decisions.
Historically ground transportation was a pretty easy category to manage, and we used what data we had at our fingertips to make our decisions. But now taking a new look with more dynamic data begins to elevate the conversations both between the buyers and their suppliers and between the buyers and the companies they work for. And that is Phat Data.
Now is a great time for many of us to do some spring cleaning of our programs, and of our data strategies, and find new and interesting ways to manage business travel.
Because sooner or later, business travel will be back. And Phat Data will be more vital than ever.
Jennifer Steinke is Global Head of Travel for PPD, Inc., and an industry thought leader with over 30 years experience managing corporate travel. She holds an MBA plus Certified Corporate Travel Executive (CCTE) and Global Travel Professional (GTP) certifications from GBTA. Jennifer strives to deliver innovative and thought provoking ideas to the corporate travel industry.
