Ancillary fees are a pain in the budget. But the pain is not so much that suppliers are adding fees to the bottom line. The real pain comes from being blindsided by fees.
This surprise factor has prompted the Global Business Travel Association to create the first-ever handbook of travel industry ancillary fees.
“There are more than 40 different ancillary fees that you have to watch for,” said Joe Bates, senior director of research for the GBTA Foundation.
GBTA’s “2012 Ancillary Fee Handbook: Who Charges What, When & Where” calls itself the most complete guide to ancillary fees ever compiled. Based on a GBTA Foundation study, the report covers the range of fees charged by airline, hotel, and car rental suppliers.
Fees are evaluated in three areas:
• how commonly each fee is assessed
• how transparent the fee is to both traveler and travel planner/manager
• how easy it is for travelers and planners/managers to track the fee once it has been assessed
“We’re not saying that these fees are good or bad, justified or not justified. We just want travel managers to be aware of the possibilities,” Bates told Travel Market Report.
The handbook, which is free to GBTA members, gives travel managers a better idea of the kinds of charges and fees to look for on expense reports. Too many travel managers are not tracking ancillaries, he said.
A GBTA survey from mid-2011 found that only 21% of travel managers were tracking ancillary fees.
Yet fees accounted for more than 8% of the total travel spend, according to the survey. “That’s not a trivial amount at all,” Bates said. “Even if you’re only spending $1 million a year on travel, $80,000 is ancillary spend. That’s somebody’s salary for the year.
“This handbook is the first step in boosting that 21% who are tracking fees up to 100%.”
Better spend management
Tracking fees is the first step in designing policy and supplier contracts to manage the spend. While there are no firm data on the types of fees that managers are tracking, anecdotal reports suggest that coverage is spotty.
Hotel Internet charges are a good example, Bates said. Usage and charges are in the folio data, but are seldom reported as independent fees in travel management reports.
Fees collected during an airline flight are another common problem. Even if a traveler uses a corporate credit card for the charge, the carrier probably doesn’t show what the charge is for.
“You might know that your traveler charged something with United,” Bates said. “But you don’t know if it’s a meal, a drink, Internet access or what was involved.”
Knowledge is power
Once travel managers know what fees are likely to show up on expense reports, they can redesign travel policy to allow or disallow specific fees. Travelers may not be happy that specific ancillary fees are not reimbursed, but at least they won’t have to wonder about reimbursement at the point of purchase.
“With the handbook, travel managers have a better handle on what fees are out there. Now they can go back to their vendors and suppliers and look for ways to give better visibility. It is important for travel managers to continue to talk with their suppliers about ways to improve visibility,” Bates said.
“The ancillary issue isn’t going away. It has proven to be a very effective way for suppliers to generate revenue,” he added.
The 2012 Ancillary Fee Handbook is free to members. Nonmembers may purchase the report by emailing firstname.lastname@example.org.