T&E card data provides buyers with visibility, cost savings opportunities for the travel spend.

By Susan Avery

When the recession began nearly two years ago, companies put in place strict rules for travel. Cutting back, they were able to save a lot of money. Now, as the economy recovers, they recognize a need for employees to travel to conduct business and are starting to loosen the purse strings. Yet they hesitate to go back to pre-recession levels of spending.

Companies want to make sure travel generates a return, says Marcie Verdin, senior vice president, large market segment commercial products at MasterCard Worldwide in Purchase, N.Y. She points to a 2009 USTA/Oxford Economics study that shows every dollar spent on face-to-face meetings with customers generates a return of $15 to $20. For a conference or trade show, the return is $4 to $6.

To determine that return, procurement professionals use data on spending on travel with suppliers (airlines, hotels, car rental companies, etc.) provided by card companies like MasterCard, American Express and Visa in their calculations. They also use the data to track and control spending on travel, in their negotiations with travel suppliers and even to better manage company cash flow.

Verdin says customers look to MasterCard for travel spend data to integrate with their companies' expense management systems so they can do better reporting. Integration, she explains, provides users with a clear picture of spending on travel. "Companies are telling us, 'If we are going to open up travel, we want to be able to manage it,'" she says. MasterCard offers its Travel Dashboard to help buyers analyze spending on travel.

"In today's economy, we're finding a heightened focus on value," says Wendy Prewitt, vice president, global client group at American Express in New York. "Companies are making sure that travel managers are watching travel costs more closely. They are really looking for a return on investment on every dollar that they spend on travel."

Data from traveler use of cards provides the foundation for figuring ROI, she says. "Companies are mandating use of corporate card programs to ensure that all spending is captured effectively. Travel managers use the data we provide through our tools to improve compliance, identify new areas for negotiation and to track spending."

Prewitt offers up an example of a new customer that's working to consolidate its travel program for the first time. "They are mandating policy and capturing expenses globally. Using American Express corporate cards, they're tracking, managing and controlling their expenses," she says. "While we are in the early days of the relationship and the rollout, they can expect to see a 10% savings against total expenses as a result of this global consolidation and policy compliance."

As Rafael de la Vega, head of global large market at Visa in Foster City, Calif., sees it, travel buyers are looking for ways to make sure policy is strong enough and that travelers are in compliance.

"What's important to companies is access to information so they can make decisions accordingly," he says, adding that efficiency is particularly important to companies post-recession. To that end, Visa has launched IntelliLink Spend Management, a tool for analyzing and managing spending with suppliers of travel services.

Despite the recession, card companies are reporting that multinational companies with global travel programs did not cut back on spending as much as companies with a U.S. base of operations.

"Given the nature of the business, they need to travel more than domestic companies," de la Vega says. "So they are expanding programs and cardholders. We've been working with them to help them gain benefits of visibility and cost control. It's much more complex." One area of complexity: Selecting a currency in which to negotiate contracts with suppliers.

SPEND DATA. Card companies routinely provide customers with data on traveler spending with airlines, hotels, car rental companies and other suppliers, and they continue to enhance such data. For instance, card companies now can break out spending with hotels. This hotel "folio" data provides an itemized list of expenses that includes spending on meals, parking, Internet access and other amenities.

"With the data, travel managers can study patterns to spot out-of-policy spending, new opportunities for negotiating and if travelers are actually using the negotiated rate," says Prewitt at American Express.

Still, travel procurement professionals want more. They are looking for standardized reporting on certain expenses such as the fees implemented by the airlines recently for baggage, preferred seating, meals and other services. The card companies report that they are working with the airlines on this issue.

"The industry is working on more visibility into those ancillary charges especially since the airlines have said that they are going to continue the fees and maybe even increase them," says MasterCard's Verdin.

As a result, "we will see travel managers begin to institute policies limiting the number of bags travelers can take with them on trips and things like that," she says, adding that she is starting to see travel managers put limits on the number of times a traveler can order room service in a day and on spending for meals according to travel destination.

Travel buyers also are asking for card companies to provide data on spending with suppliers that are environmentally friendly. "Ultimately where we end up as an industry is still evolving," Verdin says. "It started in Europe, but we are starting to see demand pick up for reporting on emission use by aircraft type and whether a hotel is green."

And, in response to customer demand, card companies are now offering cards to track spending on meetings and are providing spend data to travel procurement pros with responsibility for meetings and events.