Cost Saving

2024/09/17

Marvel Travels – Corporate & Leisure (MTCL) Achieves 20% Cost Savings for Client Through Strategic Travel Management.

By leveraging detailed diagnostic analysis and expert industry insights, MTCL successfully developed a strategic travel management program that led to 20% cost savings for the client. This achievement was realized by implementing best practices and influencing booking behaviors, ensuring the client surpassed their cost-saving goals.

Overview
The client, a prestigious 35-year-old educational institution, offers a broad range of undergraduate and postgraduate programs in Engineering, Life Sciences, Law, Design, Hospitality, and Management. Ranked among the Top 20 business schools in India, it operates across the country and includes two highly regarded Institutes of Hospitality Management and Culinary Arts in Mumbai, alongside specialized schools for Design, Media, and Health Sciences. With a significant presence in the educational sector, the client sought to optimize their travel spend without sacrificing travel frequency.

MTCL conducted a comprehensive review of the company’s travel policies with a clear goal: to reduce travel costs while maintaining the client’s travel requirements.

Objectives.
The primary goals of this initiative were to:

*Develop and implement a new travel policy that maximizes cost savings while maintaining travel efficiency.
*Achieve an annual travel expenditure reduction.
*Increase transparency in purchasing behavior to enhance accountability.

Challenges.
Without an established travel policy, the client was unable to accurately track or evaluate purchasing decisions relative to actual travel needs. This lack of structure posed several challenges, which MTCL needed to address to ensure the success of the initiative:

*Absence of formal guidelines for air travel bookings.
*Over-reliance on a single preferred airline.
*Heavy use of fully flexible fares based on an assumed need for travel flexibility. Solutions.

MTCL's first step was to analyze the client’s purchasing behavior and compare it with their actual travel needs. A three-month review of booking and travel trends was conducted to evaluate the necessity of flexible airfares against the potential savings from Best Fare of the Day options.

Based on this analysis, MTCL implemented the following key changes:

*Established an ‘open-skies’ policy, introducing Best Fare of the Day across two airline networks.
*Introduced a 14-day advance purchase requirement for domestic travel to take advantage of restrictive fares.
*Rolled out a pre-trip approval process to ensure that all bookings aligned with the new travel policy.
*Generated fortnightly Corporate Savings Reports to highlight additional savings opportunities for each booking.

Results
Within just three months of implementing the new travel policy, the client achieved the following:

A 20% reduction in travel spend, despite a 10% increase in travel activity. This result represented 42% of the company’s annual savings target in the first quarter alone. The savings were driven by reducing the company’s reliance on expensive fully-flexible fares by 40% and improving domestic booking lead times.
A shift in airline market share, with a 50:50 balance between two competing airlines. Previously dominated by a single airline, the new open-skies policy allowed the client to take advantage of more competitive fares, schedules, and services, ensuring greater cost efficiency and flexibility.

Conclusion:
Through targeted analysis and strategic changes, MTCL helped the client achieve significant cost savings while enhancing transparency and maintaining travel efficiency. By adopting an open-skies policy and shifting booking behaviors, the client not only reduced costs but also improved the flexibility and value of their travel program.