Webinar - Maximizing Travel Program Savings in 2023

Hello and welcome to the second installment of our 2023 webinar series brought to you by Amtrav. Our topic today focuses on maximizing travel program savings in 2023 and specifically geared toward middle market firms.

[Speaker 2]

My name is Susan Altman, I am the Chief Sales Officer at Amtrav and your host and moderator for the day.

We would like to thank you for your participation as we continue on with our webinar educational series. We've heard from many of you that we're providing thought-provoking insight into the issues of business travel today and we welcome our customers, prospective customers, suppliers and the entire business travel community to join us and to gain a source of information and education as we chart the new waters in our post-COVID-19 business travel environment. In each installment we've brought leading experts to the table to express and explore the topics that matter most to those that we serve.

We have done so again today and plan on having you hear from one of our Heads of Relationship Management and Consulting at Amtrav as well as two valued customers of ours in the middle market space about insights into savings, sharing some real-life examples and more. So we have a full agenda and let me get started with a brief overview of our topic and then introduce you to the panelists for the deeper discussion. So are we there yet?

We'd like to level set at first really talking about where is business travel in the United States relative to pre-pandemic 2019. Since mid-2022 we've been sitting around 25 to 30 percent recovered so as you can see there's been many different instances of variants and other issues that have had us climb almost to the levels of 2019. So we're not quite there yet as an industry but we're almost there.

What we do know is that prices and budgets are going up. If you were one of the attendees to our budget forecast webinar in November this isn't a surprise to you. Prices increased quite a bit in 2022 and are expected to increase again in 2023.

Maybe not as much but still definitely the increases are there. So on the travel budget side I mean you're experiencing both the inflation that's going on right now and the increase in the number of trips because restrictions have been lifted and more travel is actually taking place. And most of this most of us at least I did knew this was coming because we're feeling that cost pressure in our own lives on the consumer side.

So it begs the question what can you do to save in your corporate travel programs? Airfare. Airfare is expected to increase about 10 percent in 2023 almost back to those 2019 levels.

And hotel 11 percent exceeding the 2019 levels. And the car rental overall about eight percent. 20 percent over 20,000 to 2019 levels.

So as you can see cost the cost pressure is going up. So what can you do? What can you do in your middle market firms?

What can you do in general that will help really focus on cost and avoiding costs as well as you know making sure that you're optimizing programs. So I've listed five key strategies to optimize middle market programs and that's what we'll be talking about in more detail today. So I'll summarize the five different ways.

First working with a TMC travel management company. So we definitely have your back. We at Amtrav in addition to being a tech company are a travel management company and have been since 32 years ago.

So we have all that expertise as well as other travel management firms in looking at key savings opportunities, cost avoidance strategies, and setting up a game plan for maximizing your spend. Second developing travel policies clearly displayed easy to follow and that fits your business needs. Have a clear policy.

Structure is good right? So guidelines are essential to driving good behaviors and less exceptions to the behaviors you do not want. And really offering travelers and stakeholders the best possible choices on cost.

So use your TMC to help you assess, create, and develop a new policy if need be. Having stellar data. So have great data visibility.

Booking data, expense data, credit card data, all those things are really insightful and can help you look at your cost, your trends, and behaviors of your traveling populace. Identify opportunities from that data visibility. The booking data alone you can look at and identify trends and set a strategy on your cost related issues as to what you can do and where to go.

And then honestly as you look at that data visibility change in course if need be. And having a great supplier strategy. One that's very solid.

Developing and pursuing that supplier strategy to maximize money saving, discounts, perks, credits, non-refundable tickets, etc. That is all going to be talked about today. You know the lower end of middle market volume accounts may not have the opportunity to have an airline discount.

But maybe middle market larger companies can do that. And large customers as well as those in the fortune 500 may be able to capitalize on having their own discount programs with air and hotel. And maybe you don't in other segments and volumes of business.

And if that's the case what do you do? Well you can capitalize on the TMC, on Amtrav's programs, discounted programs in air and hotel. And maybe if you are a little larger you can develop your own discount programs with air, car, hotel.

But then again you have to really set a strategy because even though you have a discount program sometimes it's not great to be locked into that program. Maybe the spot buy, those lower web fairs availability that are available through the TMC. Maybe those are better for you.

Maybe some of the deeper discount hotel opportunities are better. So again that's what we'll be talking about today. And who's going to lead the charge on that and I'll introduce right now is Kyle Harrison.

And Kyle is that individual I was talking about that works for us. That is Director of Relationship Management and Consulting Strategies at Amtrav. So take it away Kyle.

[Speaker 1]

Thank you so much Susan. Hi everyone. Good morning, good afternoon, wherever you're joining us from.

Thank you so much. We're really happy that you're here. As Susan mentioned I'm Kyle Harrison.

I am the Director of Relationship Management for 10 years now here at Amtrav. Responsible for our key customer segment as well as corporate strategy as well across the board. So very very happy to be with you.

I'm also joined by Jeff from Praying Pelicans and also Christy as well from Avanos Medical who will be popping in and out throughout the webinar and then also at the end to answer any of your questions. And also if anything organically comes up that they want to put some great insight in, they are going to join in and give us some opinions on all the slides that we're going to talk through. So we'll go ahead and we'll get started here.

So let's take a look at our agenda. So we are going to head through airfare policy and planning insights. We're going to take a little bit time to talk about unused tickets.

There are some major changes to the American Airlines program when it comes to corporate contracts, air pass, and also fare visibility and display. So we're going to go ahead and take a look at that as well. We're going to take a look at hotel programs and lastly car rental programs as well.

So a lot to cover. We'll go ahead and we'll get started here. So first let's talk about how most businesses manage their travel today or don't.

Every year here at Amtrav we study over 1 billion airfares to pull insightful data points to be able to provide you recommendations for your travel program. Yes, I said 1 billion airfares that we study. Let's talk a little bit about advanced purchase of airline tickets.

So after reviewing over the 1 billion airfares, the question came down to can you book too early? Yes, we actually found that prices drop two months prior to departure and then continue to climb as we approach the date of the flight. So you don't want to book too far in advance.

When studying advanced purchase we also found that 14 days prior to departure the price jump was roughly six percent and seven days prior to departure was eight percent. So what does this mean? Setting a policy around a 14 day advanced purchase window is advisable.

Although given the nature of your travel program this might not always be feasible if you have folks who travel last minute due to the nature of your business. But if you have the means to be able to book in advance we encourage you to do so. And lastly interestingly enough the 14 to 13 day jump was 13 percent in 2020.

So great insight on that as well. Change fees. So this is actually something of the past and a very positive change in the airline industry that came from the pandemic.

So for example in the past with a 200 change fee being applied to a new ticket say that was booked for example for 300 but we're now trying to exchange that ticket for a new ticket for 400 this would have cost you 300. But in that same scenario now without the 200 change fee we're only owing the difference in fare which would be a hundred dollars saving you 200. This is incredible savings on your behalf.

Amtrak customers saved over 5.7 million dollars in change fees due to these no longer being applied to the bookings which is just fantastic savings on your behalf. So the question at hand does advanced purchase still matter? Yes if you have the means to be able to book in advance do so.

We did see a 20 percent savings in 2022 from advanced purchase so yes it's definitely still important and if you can work this into your travel policy we do encourage you to do so. So let's take a look at which day of the week is best to book. We actually found that on Tuesday and Wednesday they were reliably cheaper by about 15 percent.

But when we really evaluated is there a best day of the week to book not really. Honestly the daily average ranged honestly in pennies when it came down to us but the insight that we do want to provide is in our study we did find that Tuesday and Wednesday in most cases were reliably cheaper depending on the route and the specific airfare. What about the best month to travel?

So taking a look at which month is cheapest to travel during February. We actually found that February was reliably the cheapest month interestingly enough. Next would be April and May which is about 15 percent cheaper than June and July and then lastly September and October were 15 percent cheaper than the surrounding.

So February interestingly enough was reliably the cheapest month to book. So again planning meetings events around that could be something valuable and a hard savings for your program. All right so what steps should you take to save?

Let's go ahead and let's review all the steps in order for you to be able to save on your program. Number one check your travel policies. Does it make sense for your program to require possibly a 7 to 14 day advance purchase window?

Again as mentioned just given the nature of your travel if most of it's last minute it might not always make sense but if your travelers have the means to be able to book in advance we encourage you to implement that in your policy and enforce that. Communicate. Communicate with your travelers.

Share insights so they have knowledge to make informed decisions and also know the direction that you're heading when it comes to saving on behalf of your organization. Plan smart. Consider cheaper months as we just reviewed.

So February for example maybe that is when you would decide to have a group meeting incentive trip just given that we did find that February was reliably cheaper when it comes to planning in advance. But of course make sure your travel policies fit your business needs. Every program is unique and so that's why Amtribe is here to help to be able to strategize and help you drive savings to your travel program.

Let's talk a little bit about unused airline tickets. So one of the easiest ways to save is exchange your company's unused ticket credits before they expire. Consider it money that has already been paid for for a trip that you didn't take and they'll expire if you don't apply them.

These are even more valuable now that you don't have to pay the $200 change fee in piece to redeem them with major carriers such as United, Delta, and American. And Southwest was actually first in the industry to do this where they never had change fees so that always stays true as well. There's lots of opportunity.

Right now currently with Amtribe we're holding more than $6 million in credits for our customers which are going to be applied towards future use tickets and provide direct savings on behalf of our customers. So I told you that unused tickets are valuable. Amtribe clients saved 6% on airfare overall using their unused tickets and 110 Amtribe customers saved more than 10%.

It is the biggest discount and savings opportunity. Taking these tickets that again have already been paid for expense and then using them to save on a new trip is incredible savings. So let's review some of the current rules for most of the major carriers for each airline and their unused tickets.

So we'll take a look at some of the expiration dates and exceptions and also some new program insights as well too. So we'll start with American. So tickets are good from one year from the original date of travel and we have not seen any new exceptions to the expiration date.

But again our program also our online software A2B and our relationship management team will inform you of any exceptions as those are continuing to evolve over 2023. Delta. So you need to book your new flight by the end of this year.

So again 12-31-23 and you also need to travel on that new ticket by December 31st of the following year of 2024. So very important two specifics either when it needs to get rebooked and then also when it needs to get traveled on. Southwest.

So there is a huge change to their program if you did not see this in the industry. Tickets issued after July 28, 2022 never expire. This is incredible and such a incredible change on behalf of Southwest Airlines and anything that was issued prior to July 28, 2022 those tickets are going to be good for one year from the original date of travel.

United. So you do need to book your new flight by the end of this year. So 12-31-2023 and the travel actually needs to start by the end of the year.

So before 12-31-2023. We're also going to discuss a very unique refund program here shortly with American Airlines which we will get to here shortly. And then lastly JetBlue Alaska they have no active ticket expiration date exceptions.

So those are the standard one-year ticket expiration from the original date of travel. So let's review this refund program for United Airlines. Amtrav issued tickets are refund eligible minus a penalty for roughly $125 per ticket which is incredible savings.

So these will actually get submitted for refund back to the original form of payment that was used to purchase the ticket. So that is one caveat is we cannot manipulate where the refund is being sourced to. That is going to go directly back to the original form of payment that was used.

But still any tickets that are eligible and we can refund on your behalf for the $125 penalty is worth it. We've actually refunded over half a million dollars worth of United tickets already for our customers. Let's also review some name changes for unused tickets.

We often get the question of can I exchange a ticket purchased for one individual that has left the organization? Maybe they have been termed or maybe they were a one-time traveler that's never going to use that ticket. Can I use this towards someone else?

And answer is it really depends. So we're going to go over a couple highlights here. So for American, Delta, and Southwest.

So we'll focus on those three. Bullet point one is number one you must have a corporate agreement with those carriers in order to even be eligible for name change options. So if you have a direct deal and discount with any of those major carriers that opens up the conversation with our relationship manager at all of those programs in order to talk about can we do any name changes for exceptions for penalties.

So number one first and foremost is you do need to be involved in a corporate program in order to qualify for those. Secondly UATP payment cards. So travel purchasing cards.

These are a great option again if you have a corporate agreement with a carrier that will allow for you to essentially think of it as cooling all of your credits into a single form of payment. So a unique 16-digit card number is generated with all of your credit values that we are able to issue future tickets against until the balance is gone. So if you do have a corporate program with most of the major carriers we would want to strategize with account manager there to see if you can qualify for a UATP payment.

Big change with Southwest. Recently if you did not see as well is they introduced a new fare type called want to get away bus and one of the biggest benefits to these new fares is that they can be exchanged for a different traveler. Also in my experience in taking a look at pricing really the the variance between the want to get away which is their baseline and the want to get away bus was roughly 20, 25, 30 dollars in most instances.

So purchasing this fare class just knowing that we're able to exchange it for another traveler is an incredible savings. And then lastly Alaska, JetBlue, United. They do have name change options.

JetBlue actually is offering a free name change so we're able to do that for free. Alaska and United the penalty is roughly between 125 and 150 in order for us to exchange these for new travelers but it is an option that's on the table. So what steps should you take to save with unused tickets after reviewing everything that we have in the past couple slides?

Know your balances. So strategize also with your relationship manager to come up with a strategy on how you can get these used. Communicate.

So alert your travelers of what credits they are currently holding and also within the Amtrak program in our online software A2B we have a very specific setting where you can automatically email a once a month reminder to all of your travelers of what credits they are currently holding, what's the value, and when do they expire. So we make it extremely easy that will actually communicate on your behalf with your travelers of what tickets are they currently holding. And lastly make it easy.

Here at Amtrak we do this by one automatically displaying your tickets while shopping on our online software A2B. Also when the traveler goes to purchase the ticket we make it extremely simple for them to point click and apply that credit and we will handle the exchange. They don't have to talk to anyone to even apply these credits.

So we make it extremely easy with just one click at the time of purchase in order to apply any applicable credits. Just so everyone can get an idea of how this looks on the left hand side we've actually invested a lot through the pandemic to make it as easy as possible to track and use these unused tickets on behalf of our customers so you can save money. So on the left hand side this is an example of our unused ticket report.

So you can see the latest status of every ticket including any automatically updated values and expiration dates. During the course of the pandemic the expiration dates and exceptions were changing quite frequently. Now they've become a little bit more stable and not changed as drastically as they have over the past two years.

But in the event that we get word that there is any new exception to your program for the travel credits we're going to automatically apply that for you. So this unused ticket report is going to get updated instantly with the most up-to-date information. And then on the right hand side as I mentioned this is an example of someone applying the unused ticket on the purchase page.

So we make it extremely easy with just one click for them to be able to apply this at the time of booking. And this is actually how we helped our customers save roughly a 10% savings on their overall program by making it extremely easy for their travelers to be able to point click and apply these unused tickets towards a new trip. So now let's segue a little bit to talk about some program changes with American Airlines.

So go ahead we'll get into this one.

[Speaker 2]

Before we do we have a couple of questions. So could we pause for a moment?

[Speaker 1]

Let's do it.

[Speaker 2]

Okay the first question is and I will direct this one to Kyle. How do you get a corporate agreement with a carrier?

[Speaker 1]

Great question. So the corporate agreement number one is going to start with analyzing the volume of your program and also your share between not only the vendor that you're trying to deal with. We'll just say in this example American Airlines.

They're actually going to pull data sets from previous years of what was your direct volume with that carrier and then also what was your share with other vendors. So we can see number one do you qualify? The thresholds vary.

So we would be happy to follow up with you directly on this to take a look at any reporting and analytics you have on your current program. It's really varying depending on every major carrier and the entry level to be able to get into those programs but it all starts with analyzing that data set.

[Speaker 2]

That's great and that was from Michael. Thank you Michael. The next question that's kind of related and I'll take this one second was did basically did the fact that you have to have a contract in place with a carrier in order to have unused tickets name changes done did that change recently?

Because that wasn't the impression this caller and it's anonymous I don't know who it is but had had. So did that change or do you 100% need a corporate agreement with a carrier in order to get a name change?

[Speaker 1]

Yes so the only exception I can think of as we mentioned is United and then also JetBlue as well too. So again there's going to be a small penalty which was roughly anywhere between 125 to 150 dollars but yes the corporate agreement is really the baseline qualifier for most of the major carriers in order to even consider the name changes. I've also seen now over the past gosh I want to say maybe like six seven months is even some customers with corporate agreements it's becoming a lot harder in order to qualify for those exceptions.

So really coming down to the relationship and also the volume that you are driving to those carriers in order to make those exceptions. But as of right now really United and again JetBlue are the two that are definitely holding strong and allowing the name changes but the others would be a case-by-case basis we'd have to evaluate.

[Speaker 2]

Now we go to bat for you we do.

[Speaker 1]

Absolutely.

[Speaker 2]

And Denise asks can we qualify for those exceptions through your corporate agreements with carriers and I believe she is referring to discounts with Amtrak related discounts.

[Speaker 1]

Unfortunately not so everything is going to be driven by the unique specific program of your organization so that's not going to be on our behalf that is going to be the relationship that you hold directly with the vendor.

[Speaker 2]

Okay thank you. All right let's move on and we will there's one more a couple of more and if I don't get to I'm going to give you the email at the end where you can send the questions to if you're anonymous and we'll answer them for you. Okay and let's move on.

Great.

[Speaker 1]

All right so let's get back into the American Airlines major changes within their program. So some big changes happening with American in regards to their corporate agreement programs. So what exactly are we looking at?

First and foremost the spend threshold and again this is a great segue to the question that was asked earlier of certain qualifications of how do you get involved in certain corporate programs. So for American specifically this is a dramatic jump from a baseline which used to be $250,000 to now $1.5 million in qualifying spend and also proven spend in order to qualify for one of their direct deals. So $1.5 million and above is going to be the new baseline when it comes to getting into their corporate agreement program. So secondly there are some expected changes to the soft dollar programs which again you can think of these as more waivers and favors programs. So when it comes to any name changes refund exceptions. We don't have full details on the changes to the soft dollar programs.

We do know they're coming so we will be sure to communicate on anything and everything as we continue to get more information on the changes with those soft dollar programs. Thirdly you can no longer join or add funds to Airpass. So Airpass was a pre-funded corporate discount program that American Airlines offered and it is now this program's being sunsetted and discontinued completely.

So this is definitely a major change within their program. And then lastly