Mobile Communications Virgin Territory for Travel Management

This is the third in a series of managing secondary business travel spend. Part One looked at dining expenses, while Part Two looked at ground transportation expenses.

Are companies managing mobile communications expenses? The answer is almost invariably no. And that gives travel managers a whole new arena in which to demonstrate their value.

“Mobile communications is an area that has never been touched by most companies and travel managers,” said Nate Strelow, connectivity expert for Carlson Wagonlit’s CWT Solutions Group.

Many organizations already manage smart phones and phone plans provided to travelers, Strelow said. Phone usage is typically managed through the IT department, often for security reasons rather than for expense management.

But phone usage is only one small part of mobile connectivity. The more any given employee travels, the more he or she spends for mobile connectivity. Travelers typically pay for mobile broadband connections in hotel rooms, airports, airplanes, coffee shops/restaurants and other public locations.

Pressing need to connect
Travelers have no reason to consider cost, Strelow said. They just know they need to connect in order to maintain work productivity and personal connections. The CWT Travel Stress Index released in April identified poor Internet connections as the second most stressful part of business travel, only slightly less burdensome than lost or delayed baggage.

The more often a traveler is on the road, CWT found, the more stressful and disruptive are lost time and lost productivity events such as poor connectivity. And while stress can’t be eliminated on the road, reducing traveler stress can boost productivity up to 32%.

“That correlation between stress and productivity helps tell travel managers and executives why managing mobile connectivity is important,” Strelow said.

Managing mobile connectivity also helps ensure that travelers are constantly connected. More reliable and more predictable connectivity helps improve traveler safety and security, part of every organization’s duty of care. And active management can reduce spend.

Variables on spend
How much spend can be reduced is an open question. There are too many variables to give a general answer, Strelow said. Many surveys put mobile connectivity in the top tier of travel costs, but the amount depends on individual factors such as frequency of travel, connectivity options en route and at the destination, whether negotiated hotel contracts already include in-room Internet, whether travelers typically purchase in-flight Wi-Fi, and so on.

The reality, Strelow said, is that travel managers must audit expense reports to find out just how much the company is currently spending and which vendors account for the largest portions of spend. That may mean asking travelers for more detail on their expense reports.

Higher frequency travelers are usually the highest spenders on mobile connectivity, but not always. The only way to know is to check expense reports to find out who is spending how much for what services.

“Let your travelers do some of the work for you by detailing what they are spending,” he suggested. “You get the data you need from expense reports so you can give them the kind of connectivity they need when they are on the road.”

Hotel data lacking
Hotel folio and card data may show some mobile communications charges, but detail is typically lacking. The hotel folio may show “telecommunications” without breaking out basic in-room connection fees versus fees for higher speed service versus other costs. Or the Internet charge may be rolled into a daily resort fee or some other category.

“Hotels are getting to be more opaque as they move to tiered Internet charges,” Strelow said. “A basic slow connection may be included in the rate with an extra charge for more realistic connection speeds. And even if your negotiated contract includes Internet connection, the hotel may still be charging some travelers. You need to audit your vendors and contracts as well as your travelers to determine what you are actually spending.”

Talking to vendors
Once the travel manager has good spend data, it’s time to talk with vendors. Hotels may, or may not, be willing to negotiate on in-room connectivity, but the discussions are more likely to be productive when travel managers have solid numbers of current service utilization and spend.

If inflight Wi-Fi turns out to be a significant item, travel managers have alternatives. One is to limit Wi-Fi purchases on shorter flights or not approve it at all. Another is to cut a deal with either the primary air carriers or the Internet providers that serve those carriers.

A similar strategy may work for airports and other high use areas, either negotiating directly with hub facilities that account for a significant amount of spend or negotiating with the Internet providers that serve those facilities. When it comes to airport connectivity, it may be more cost-effective to pay for airline lounge access that includes Internet services.

“Travelers are your biggest consumers of mobile connectivity and your biggest spenders on connectivity,” Strelow said. “As travel managers are asked to identify savings, this is an area most of us have never even looked at. Mobile communications is an area begging to be managed.”