MacNair

Michael MacNair is president and chief executive officer of Alexandria, Va.-based MacNair Travel Management. Started in 1989, the company is a privately owned American Express Travel Services representative that bills itself not as simply a travel agency, but as a travel and logistics consulting firm. The company offers services for business travel, vacation travel, meeting travel, as well as honeymoon and romantic travel. MacNair works with individuals, companies of all sizes, professional organizations and was the travel consultant of choice for the McCain presidential campaign.

MacNair recently spoke with the IndUS Business Journal about the travel management industry and the ways in which businesses can use travel management services to save money.

Like other travel industry insiders, MacNair has felt the rallying cry in recent times to defend his industry from media and political sentiment that cutting back on business travel is a good way to save money in the current economic recession. He points to the necessity of business travel and, like his travel brethren, does not anticipate business travel suddenly falling off the map because it is crucial to the way so many companies operate.

“In the business world, it is important to have that face-to-face meeting,” MacNair said. “And the minute you stop doing that there is going to be an impact.”

“Travel is surely required,” he added. “Business travel is not going away, but people are cutting back.”

In the context of cutting back and looking to reduce costs from business travel, MacNair offers seven keys to travel savings for 2009.

These are:

• Eliminate any objections to better manage/procure travel in 2009 and take control
  
• Define more closely what your “best value” expectations are and enforce within a stronger travel policy
  
• Use travel to solve company-wide problems
  
• Address a la carte costs associated with travel in today’s environment
  
• Encourage advanced trip planning and the right online bookings
  
• Leverage and control meeting, committee, consultant and membership travel to secure enhanced supplier opportunities
  
• Stay abreast of security and service changes and issues

MacNair advises companies that do not use travel management services to consider doing so now, because he says any fees for service will more than be paid for by savings in travel expenses. Overall, he said he has always been surprised at the lack of interest small companies have taken in travel management services. According to him, in the last decade large companies have been very effective at managing travel, utilizing travel management services, while small companies have failed consistently in this regard.

“What surprises me often is this is a lost art for a lot of small businesses,” MacNair said. “This might be the only expense they don’t manage and I can’t figure out why.”

MacNair calls what companies like his do for its clients “travel procurement” versus “travel anarchy” for those businesses that try to go it on their own. The biggest factor in “travel anarchy” he says is no set travel policy, which dictates what kind of travel expenses are acceptable. Companies that do not have a system, process or way to check on travel expenses will find themselves succumbing to “travel anarchy.”

Despite the fact that the general consensus on business travel planning is to get the best price, more often times than not, this does not happen. With the average business trip taking about four hours to set up, employees are bound to cut corners out of time necessity, according to MacNair. “The staff doesn’t want to waste money, but it will happen,” he said.

With the rise of Internet travel sites, MacNair says there is a growing belief that anybody can get the best prices for flights and hotels through a few quick searches. “The assumption is the lowest available fare is just a click away,” he said. “But as simple as many of the public sites are, they are tremendously incomplete.”

He gives a quick example of an online search for a Washington to Hong Kong flight from earlier this year, which yielded such varying results as $884.25 from Cathay Pacific Airways, $1,125 from Continental Airlines, $2,565 from United Airlines and $6,548 from Air Canada.

In addition, he says, the security and reliability of Internet travel sites varies widely.

Good travel management companies are going to offer their customers more alternatives for the most cost-effective travel, as well as helping them stick to clearly established travel policies, MacNair added.

MacNair feels very strongly that many companies are missing the point when it comes to trying to save money on business travel. “The approach many people are taking right now in travel is saving money on the transaction fee of a purchase, which is 3 percent, instead of cracking down on air, hotel and car, which is 97 percent of the trip,” he said.

Overall, MacNair suggests that efficient travel management can save money, save jobs, save customers, help close more deals, reduce liability, improve productivity and enhance services and support of company travelers. He stresses that for the average company travel is the second largest controllable cost and can generate overall savings of as much as 20 percent.

MacNair reports that the current economic climate does seem to have companies reexamining their travel policies and acknowledging that they need to do a better job managing it. This has driven an increase in new business for travel management companies like his. “There is a very strong interest in having us shore up their travel procurement systems right now,” he said.

At the same time, however, he admits that previous customers are spending 15 percent to 20 percent less in their purchases through travel management companies.

Overall, MacNair stands strongly behind his assertion that examining business travel practices is a great way for companies to save money. “In difficult times it does get businesses back on track on thing they were not doing well … and I think there are a lot of companies who are not managing travel well,” he said.