Travel and entertainment expenses are a big chunk of change for corporations — air alone could account for one-third of your budget. Given the economic uncertainties of the past two-and-a-half years, it's not surprising that companies have taken the scissors to these expenses.
Many have instituted tighter restrictions on air travel expenses and mandated that employees use online travel booking sources instead of travel agents. Some have even required staffers to double up in hotel rooms. It all adds up to much more scrutiny of travel expenditures and more pressure than ever to contain international meeting/incentive travel costs, which, say veteran planners, can be on average $1,500 more per attendee than the same event in the United States. Here then are some tips for containing air and hotel expenses when holding an event outside the United States.
Selecting Air Travel
Knowing where your attendees will be traveling from is a key factor in any air travel decision, says Chris Pentz, CMP, president, Pentz Group Communications, Levittown, Pa., who plans corporate andoverseas. “It is easy enough to compare air lift and costs into two or three destinations. Sometimes you come up with a huge difference; sometimes the difference is negligible. But it is critical to know.”
For situations in which attendees will be arriving from a half dozen or more points, more sophisticated air analysis methods are needed. Many of the majorproducts include those air analysis tools, says Mark Williams, director, travel and meeting management, PricewaterhouseCoopers LLP, Tampa, Fla. The software models are loaded with current air rates and, after plugging in your information, will give you a ballpark air-travel cost figure. “We do some of that here,” says Williams, “since air is such an important component of the process.”
For international association meetings, there may be benefits to designating one or more preferred carriers. You can obtain discounts on fares, complimentary site-visit tickets, and reduced shipping rates.
One way to manage costs and take advantage of lower fares is to start the meeting on a Sunday, encouraging attendees to arrive Saturday. Sometimes the flight cost difference is so large that it is worth it to provide an additional overnight of ‘leisure time’ to participants.
Speakers are notorious for changing plans and resisting booking flights 30 days out. You can save in fees and higher air rates by prompting speakers to commit.
At Krugman Group International Inc., St. Petersburg, Fla., Carol Krugman, CMP, CMM, president and CEO, says, “What has changed is that with the new rules [nonrefundable tickets, change fees], when travel and business plans change, which they often do, it costs more to make the changes. I had a $138 ticket from my home airport in Tampa (to Miami, where she would pick up her international flight) that ended up costing $340 because I had to make a one-day schedule change. Now we think very carefully before we set our itinerary, weighing the cost benefit of ticketing early versus paying more to change later.” Krugman's company handles nothing but international meetings.
“‘Control’ and ‘travel costs’ is kind of an oxymoron these days,” Krugman says. “If you are not an expert in travel management, find a good partner or specialist who will help you out.”
Curbing Hotel Costs
Don't expect deeply discounted hotel room rates, free meeting room space and AV equipment, or even water on the tables. In general, meeting space is at a premium in many foreign countries. Hotels typically are smaller, so if you are planning an event with more than 50 rooms, you may have to use more than one property, and that can drive up your shuttle costs.
Many veterans advise working with a local contact during theprocess as well as through the actual meeting. A destination management company, a professional congress organizer, or a sister organization based in the host country can be an invaluable asset in successfully navigating business relationships. Working with the regional offices of many international hotel chains can not only save a planner time and money in phone calls and faxes, but can also help to minimize cultural misunderstandings.
Booking off-season continues to be an easy way to contain hotel costs and is a factor in international site selection. Work with hotels to fill ‘slow’ spots on their calendars. You might often find that the meeting itself dictates the season.
If you're handling a small group, consider using a boutique hotel. “If we know we're going to have 100 people or fewer,” says Eric McNulty, managing director of conferences, Harvard Business School Publishing, Cambridge, Mass., “we'll go with a smaller hotel that doesn't do a lot of group business. The boutique hotel is usually excited to get the business.”
Don't get caught unaware. Protocol in some countries is full payment up front. Work with a goodto help you negotiate the lay of the land. And have a lawyer, or someone very well-versed in foreign , to help you through the negotiating process. Pentz relies heavily on local DMCs and so does Krugman. “Working with a DMC, especially internationally, turns out to be one of the most cost-effective strategies of all,” says Krugman. “They know the culture, the language, the way business is done.”
Multiple bookings can help maintain travel costs, but don't get burned. McNulty once booked multiple events only to discover during the first event that the service wasn't up to par. And he was stuck with the same venue (or brand) for two more events. On the other hand, booking multiple events can be a good time saver and can help lower costs.
Don't assume that the cost structure is the same as it is domestically. A ‘great bargain’ or something that seems ‘very expensive’ might just be the normal cost of the item for that destination. And when you have to depend on suppliers that you don't know, get as many references as possible. “Work the chain,” says McNulty.
- Give yourself time
If U.S. negotiations normally take four to six months, it could take a year or more for an international event.
- Do your homework
Research online and talk with others who have been to the destination.
- Understand the culture
Cultural differences can affect what you get, when you get it — and how much you pay for it.
- Get local help
A tourism board, travel agent, customs broker, congress organizer, or your local chapter/office can be your ally in negotiations.
- Obtain insurance
Make sure your organization is ensured for losses outside the United States.
- Assume it's included
If what you need is not spelled out in the, it's probably not included in the price. The same is true for taxes, gratuities, and service charges.
- Agree to something you don't understand
Ask questions, gather information, and, if you're still unclear about something, ask again.
- Sign a contract without examining a translation
Request copies of the contract in English and in the language of the host country, and then compare the documents for consistency.
- Be the “ugly American.”
Arrogance, disrespect for cultural differences, or a “bull-in-a-china-shop” approach will only hinder negotiations.