29 April 2010 | Amon Cohen

From return on investment to VAT, the hottest issue in the business travel industry is balancing value against cost. In the following pages we find out how buyers are dealing with it, says supplement editor Amon Cohen

The prize for boldest statement in the SM spring 2010 business travel supplement goes to Paul Tilstone, chief executive of the Institute of Travel & Meetings. “Return on investment will become the main subject [in travel management] this year,” he says in a feature on that very topic.

A few months ago I would have agreed fully. Reaching a deeper understanding of the value of travel, and not just the price of it, will become a dominant issue in corporate travel. Now that meeting technologies are becoming not only viable but ubiquitous, travel can no longer be considered as the only form of business interaction.

However, I no longer think this will assume centre stage in 2010. Travel buyers are only in the infant stages of evaluating the benefit of travel and discussing whether quantification of ROI is possible. There is a lot of scepticism, especially in the conference and events sector, where they have been playing with this idea for longer.

Nevertheless, some forward-thinking travel managers are giving the concept their best shot. Our feature focuses on two in Sweden, a country which has led travel procurement trends before, including adopting greater environmental awareness. In a separate feature, we interview a pioneering travel manager based in a rather more surprising location, Portugal, who has introduced ROI to his work in a very direct way. NetJets Europe senior manager for travel and vendor operations Toni Goth and his team travel to meet hotel suppliers only if he has assessed formally in advance that the additional discounts to be achieved through meeting face to face will outweigh the cost of the trip.

Themes related to ROI crop up elsewhere in the supplement. As usual, we include a “how to” guide for newcomers to travel management, this time on creating a travel policy. One tip is that the very first paragraph of the policy should instruct employees to consider an alternative before proceeding with booking a trip. This sort of wording is rapidly becoming standard.

Meanwhile, a roundtable with leading travel professionals explores how to increase adoption of these other options and integrate them with the conventional travel programme. It is part of a discussion about making the most of travel-related technology, including online booking and automated expense management systems. The experts also ponder new trends that buyers are only just beginning to get their heads round, such as social media.

We get to grips, too, with what has proved the hottest topic of the year, judging by various industry conferences: unbundled air fares. It is too late to stop ancillary fees, as they are also known, but buyers at least want a mechanism to book, pay for and track these additional costs. Solutions are on their way.

Answers are also appearing for various knotty problems related to recovering value-added tax on travel costs. Several potentially expensive complications have reared their heads in recent months. VAT difficulties have afflicted hotel billback as well, a process whereby hotels invoice a corporate customer’s travel management company instead of making the traveller pay on the spot. Some buyers love billback because it provides good data and relieves them of various administrative tasks, but since these inefficiencies are transferred to the TMC and the hotel, there are costs attached. Find out how the inefficiencies are being tackled to reduce wastage and expense for all parties.

Amon Cohen is a specialist business travel writer. He is contributing editor to Business Travel News, a US publication for travel managers, and  writes for Supply Management. He also runs TravelWord, which helps travel managers communicate with travellers, senior managers and key stakeholders (amoncohen@travelword.com)