The Hourly Cost of Air Travel

plane-thru-glass-with-peopleRoad warriors, by definition, do a lot of traveling. All their airline tickets add up to some pretty big expenses, as do the hours they spend inside airplanes.

Why not take those two pieces of data and show what it costs business folks to fly per hour? Let’s face it, talking about price per mile might be great for aviation pros, but it’s not great for briefing management about travel expenses.

ARC’s Definitive Data, Air Clarity’s Innovative Analysis

Air Clarity, my firm’s air spend benchmarking tool, crunched a few million airline tickets from ARC’s corporate ticket database to get the answers. Since ARC stores all travel agency tickets sold in the U.S. on most every airline (excluding Southwest and a few other low cost airlines), this data is as good as it gets.

Here’s what the price per flight hour looks like, based on the average hourly prices paid by roughly 2,100 corporate travel programs:

price-per-hour-Air-Clarity

The quick answer: About $80 an hour for short haul (domestic) flights; about $110 an hour for long haul flights

Doesn’t that make for a much easier conversation about the cost of air travel?

For context, this study by American Express GBT, ARC and my firm found that the average road warrior earned about $80 an hour, assuming 2,000 work hours per year.

Travel managers, try talking to your business stakeholders about the price per hour of air travel, and see if that doesn’t make for more engaged discussions.

Custom Industry Peer Group Benchmarks

If you’re wondering what your company’s price per hour is, and how that compares to other firms in your industry, good news…tClara is organizing industry peer groups to help provide even better value from our Air Clarity benchmark data. Here are the groups we’re starting:

benchmark-industry-groups-list

If you’re a travel manager interested in one of our industry peer groups, follow the group by signing up here…no cost, no obligation.

More information about Air Clarity’s benchmark reports for corporate travel managers, TMCs and airlines is here.

Some limitations and definitions around these price per hour  numbers:

Continue reading

What’s The Real Goal of a Travel Program?

 

Nine Fall LeavesQuick – name three metrics that travel managers care most about…and no, you can’t say savings, savings and savings.

Savings, for sure, maybe followed by discounts and policy compliance, or average ticket price/room/car rate.    These are time-tested, industry-accepted, common-sense metrics that are the foundation for status-quo management of the travel category.

(Going to GBTA’s Convention? See a related meet-up note at the end of this post)

Before you reject my call to demote these traditional metrics, consider the maxim “Measure what matters”.  Note that it isn’t “Measure what’s laying around, looking like it matters”.  It’s not “Measure what we’ve always measured”.

It’s the “what matters” part that’s the key.  That, and an evolved view of travel management’s mission.

Shouldn’t the goal of managing travel be to create the most value from whatever the travel budget is?  To create the biggest business impact, net of the cost?  Sure…which means we need to think about measuring said impact. Continue reading

Manage Travelers and Their Taxes with Traveler Data

Editorial license from istockphotoSure, payroll taxes are not in scope of a travel manager’s job.  But there is a great way for travel managers and TMCs to add real value here by being proactive with traveler data.

Curious?

The Problem

Many countries and other taxing jurisdictions are aggressively seeking more payroll taxes from business travelers.  This means their pay could be docked for spending just one day in a foreign country on business.

This article reports that “more than 100 countries have joined The Global Forum on Transparency and Exchange of Information for Tax Purposes, which is working toward automated exchange of immigration reports, hotel stays and airline reservations. Better-informed enforcement bodies will have an easier time catching non-compliant firms and individuals.” (emphasis added)

The problem is not limited to international travel.  In the US, many states have some form of traveler tax, according to this 2013 Pew report.

The Solution

File this under “Being a proactive problem solver”.  These traveler tax issues place the burden of proof on the employer.  So travel managers should reach out to their payroll tax liability folks to discuss the types of travel data needed to manage these risks.

There is the historical travel angle, and the future travel angle.  The key is to analyze each traveler’s location and duration history, and calculate how many days the traveler has until triggering some type of tax liability.

Complex? OMG, yes.  Fortunately, there are at least two firms working specifically in this area.  Blackspark uses TMC booking data and is integrated with Concur, while Monaeo uses the traveler’s mobile phone data.

The point is that there are automated ways to feed traveler data into the equation.  This can keep travelers from triggering significant tax liabilities – and from refusing to travel for fear of losing more of their hard-earned pay.

TMCs, you should raise this issue with your clients.  If you get enough traction, why not incorporate pre-trip alerts to help manage these future tax liabilities?

Want articles like these delivered to you by e-mail?  Sign up here.  It’s free, and you can unsubscribe at any time.

Survey Says: Biggest Analytical Pain Points Are…

* Quantifying savings (36%), and measuring the traveler experience (16%)

* Working with travel technology tools, e.g. self-booking, expense reporting and data reporting tools (34%), and the airline category (20%)

* Deciding how to structure the analysis (22%), getting good data (20%) and proving cause and effect from the data (20%)

* Meeting the analytical demands of Senior Executives (28%), Procurement (26%) and Finance (24%)

This comes from my recent survey of 50 anonymous and self-proclaimed travel buyers  – so take this as directionally interesting; not statistically significant.

It’s curious to me that this group is still struggling with Continue reading

Travel Buyers, What’s Your Big Analytical Pain Point?

question-mark-in-mazeA lot of folks in the travel industry don’t enjoy the numbers side of the business nearly as much as they do the people side.  Fair enough, as the whole industry is built on the premise of building better interpersonal relationships.

But what is it about the analytical efforts that are really causing you the most pain?

Maybe if we understood those pain points better, our industry could do a better job of making the numbers side a bit easier on everyone.

If you are a travel buyer, please take 2 minutes to answer five quick questions here:

Travel Buyers: This Quarter’s Travel Data Pain Points?

The survey is anonymous, and meant to shed some directional light on the problems.

I’ll publish the results here and on LinkedIn.

Please share this as you see fit.  Thank you!

Why Data Predicting Trumps Data Reporting

Predict What Matters Quick – name a travel metric that your CFO would pay a lot of money to predict reasonably well.

Next year’s travel savings? Maybe. Next year’s travel spend? Maybe.  But he won’t pick your firm’s future travel policy compliance rate, or next year’s average airfare, or your traveler’s future satisfaction with your online booking tool.

My point is that while firms spend a lot of money on travel data reporting, the core value that those pretty dashboards deliver is not very high – not in the grand scheme of your firm’s business.

Here’s why: Data reports are the result of the 20th-century management dictum “Measure what matters”.

Within the boundaries of a travel program there are dozens of things that matter.  And so we’ve figured out how to measure them. In order to report them.  In order to manage them.

But all those dials and gauges and stop lights really do is simply give you signals.  Signals that you have to interpret to keep your travel program  between the white lines of your side of the road.

What those travel dashboards don’t do is tell you how to get to a better travel program.

They can’t, because they have two big flaws:

  • Data reports are stuck in the past
  • Travel data reports are stuck in the world of travel

Gas Gauge vs. GPSSo that’s the data-driven solution to getting better travel programs – deal with the future, and deal with data well outside of travel.

Enter Predictive Analytics

The key is linking travel’s impact to business outcomes.  Outcomes that matter on a much bigger scale, like sales, customer satisfaction, employee attrition, health/safety costs, etc.

This will fundamentally change the way you view and manage a travel program.

Instead of seeking to minimize travel costs, you’ll be trying to maximize sales, or perhaps minimize employee turnover – by putting a travel program in place that clearly contributes to those goals.

If sales are trending down, or employee turnover is trending up, what should you, the travel manager do to help fix these problems?

Obviously, you’ll need some new lights on your dashboard – lights driven by data from Sales and HR.  More importantly, you’ll need to know how to impact those non-travel metrics.

That’s where predictive analytics comes in.  You need to have a data-driven understanding of how things like cabin policy and hotel tiers impact bigger, non-travel metrics like employee productivity, health and safety, and attrition.

You need to predict with confidence that by changing a variable in the travel policy, it will cost $X and improve the non-travel metric by Y%.

You’ll do this in one of two ways.  If your travel program is big enough, you’ll be able to mine your own data and build these models.  If your program is too small to offer enough data, you’ll depend on benchmarks and case studies from the larger firms.

Data Reporting vs. Predictive AnalyticsEither way, you’ll find yourself importing non-travel data into your travel dashboards, and exporting pro-active, fact-based advice on how to drive to your firm’s bigger goals.

Management theories evolve.  Dictums change.  It’s time to move on from measuring what matters to predicting what matters.

Want articles like these delivered to you by e-mail?  Sign up here.  It’s free, and you can unsubscribe at any time.

Solving the Blah-Blah Travel Data Problem

Good-Bad Street SignTravel managers routinely rank travel data as one of their most important issues. Yet AirPlus recently reported that 56% of North American travel managers surveyed said they would not be willing to pay for better travel data.

OK, so let’s assume those buyers are reasonable folks.  How do we explain, then solve this conundrum?

Those buyers must not see much value – provable, hard dollar value – in “better” travel data.  I get that.  This industry has put up with mediocre travel data for so long that we’re used to ordinary, low-value, blah-blah data and data reporting. Continue reading

Travel Data and Airline Sourcing Education Decks

You gotta love the 40 good folks who gave up a beautiful Sunday in San Diego to talk travel data.  I delivered a 6-hour workshop for GBTA on this topic, and am proud to report that not one person fell asleep!  Here’s the handout file we used. Topics included:

  • Sources and uses of travel data
  • Boring data reports and stupid statistics
  • Making good data-driven presentations
  • Key concepts needed for travel analyses
  • Using derivative data to answer seven key questions
  • GBTA’s KPI Resource document (as a handout; we didn’t have time to discuss it) Continue reading

I’m back in the analytics game with tClara

tClara logo

Many of you know that I sold my last company, Travel Analytics,  back in 2006.  I had a 5-year non-compete, and filled my time doing a fair amount of speaking and training, and of course writing here on whatever caught my eye in the travel industry.

Along the way I met some great guys at Diio, the aviation data intelligence firm. They know aviation data inside and out, and have an amazing group of really smart software engineers who – and this is vital – are very focused on providing great customer service.

Long story short, we’ve joined forces to offer on-demand analytics for the corporate travel industry.  Our firm is tClara, pronounced tee-CLAIR-ah, a riff on “clarity”.  You can check out our site here.

Our sweet spot is delivering customized reports in three areas: Airline category analysis, travel policy decision support, and trip friction scoring and benchmarking. Continue reading

What’s the airline’s cost of your ticket?

How helpful would it be to know the airline’s cost of any ticket?

Procurement pros often use cost modeling to estimate profit margins, then use that as  context for price negotiations.

But airline pricing doesn’t depend much (some would say at all) on costs – it’s all about supply and demand.

Evan Konwiser and I are developing a website aimed at this issue.  The initial focus is on the consumer market, but we are keen to understand the potential for the corporate travel market as well.

Your feedback will be greatly appreciated!  Click here to weigh in using this 8-question, 3-minute survey: https://aytm.com/r762623

Feel free to share the survey link as you wish.  The survey will close out after 250 responses.

Alternatively, your comments here are most welcome, as always.