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Optimizing Travel Policy and Compliance

WU KEJIAN

Ctrip Corporate Travel

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China Market Trends

• Travel demand recovered from 2008 financial crisis, steady growth expected for future

• Airlines consolidate supply through Merge/JV/Alliance

• Int’l and local hotel chains are expanding coverage into remote cities

• Car rental services are much improved

• High-speed trains become an alternative way

• Airlines are enhancing B2C (Corporate) relation

• Smart phone is creating new opportunities –service model and application

• Traditional TMC is facing competition from emerging OTA

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Travel Management Goal

Reduce Travel Spend

Improve Management Efficiency

Enhance Policy and Compliance

Strategic Travel Management

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Key savings opportunities by

optimizing policy and compliance

Source: CWT Travel Management Institute

On average 20% of total travel spend

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Travel Policy Aspects

Coverage

Travel

Policy

Effectiveness

How many key saving areas are

addressed

How clearly the rules and standards

are defined

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Effective Policy Positions

Air

Advanced booking: mandatory X+ days

Preferred airlines: always favored over non-preferred

Class of service: economy, business for int’l flight over 6 hours

Discount fares: LLF within booking window

Hotel

Preferred hotels: always favored

Rate cap: staff level and/or in high occupancy cities

Ground

Consider rail for short-haul travel, particularly where high-speed train is available

Booking Channel

Mandatory through the appointed agency

Online for non-urgent booking

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Compliance Management

Drive through point-of-sale measures

Track progress and take corrective actions

Benchmark industry performance

Provide traveler with comprehensive guidelines

Promote through communication and training

Engage management throughout the organization

Success

Factors

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Optimize Booking Procedure

Define Customized Booking Procedure

System

Interface

Travel

Policy

Suppliers

Contract

Quality

Assurance

LLF Options

Policy

Reminding

Approval

Process

Back-office

Integration

Data

Capture

Unused Tkt

Reporting

Traveler

Tracking

Traveler

Profiles

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Track Progress

Make Business Plan

Define KPIs for savings target

Agree on program implementation timeline

Conduct Regular Performance Review

Use consolidated data report available from TMC

Identify leakages & opportunities

Take Improvement Actions

Enhance policy communication & training

Implement new process

Adjust policy as needed

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Benchmark using TMC data

100% compliance is unrealistic

Understand own performance by comparing with

industry peers

Find additional opportunities

Ensure that travel policy remains in line with evolving standards

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Business Intelligence (1)

Drive savings with proper travel policy in place

ADR FFP ATP

With Clear Policy No Clear Policy

34%

ADR FFP ATP

987元

0.80

1020元

0.8243%

ADR: Average Discount Rate

FFP: Full Fare Percentage

ATP: Average Ticket Price

Note: Ctrip 2010 client data

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Business Intelligence (2)

Advance booking vs DiscountWeekly Average Discount Level

Note: Ctrip 2010 client data

Change traveler behavior can easily achieve savings

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Optimizing Policy Compliance

Change

Behavior

Mgr

Traveler TMC

Enforce at POS

Track & Improve

Benchmark

Engage

Influence

Communicate

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THANK YOU !