Since the implementation of their new reporting systems last year, Key Travel has been monitoring the effectiveness of buying behaviour in the not-for-profit sector. In a bid to help organisations manage their budgets more effectively, the research indicates the most common mistakes people make in their travel process and clearly highlights where savings could be achieved through improved buying practices.

 

The Key Travel ‘Missed Savings Report’ allows analysis of the fare taken at the time of booking alongside the cheapest available fare at the time (that would also have been offered at the point of sale) as well as the cheapest possible fare, if booked in advance.

 

The Missed Savings Report revealed that 1500 not-for-profit organisations spent approximately £31m on flights within the nine month research period, and in fact could save a staggering £2.3m by merely accepting the cheaper flight option offered to them at the time of booking – representing an 8% saving on a major cost item. The top reasons for lower air fares being declined is split as follows;

 

The results clearly show the most common reason for not taking a cheaper flight is preference of airline which is commonly driven by the traveller stipulating a specific airline in the pursuit of loyalty card points or due to personal preference. Secondly it is evident that class of travel is an issue as although economy is obviously a much cheaper option; travellers are not always taking it. Circumstances of course need to be taken into account, as 25.4% (just over £600k) of the identified £2.3m savings could instead be channelled directly into charity projects by downgrading some travel to the back of the plane. Close behind is the considerable cost incurred when exact travel times are required, as very often it is cheaper if you can be more flexible; sometimes even staying an extra night in a hotel and travelling the next day can be more cost effective.

Each of these identified behaviours, in this case equating to almost £2m of potential savings, could be effectively tackled by the deployment of a travel policy (the process by which an organisation describes the rules for travel procurement). But too often the management of the travel budget is a common oversight.

The estimated annual travel budget for a UK Charity is in excess of £250,000 and consequently a travel policy is a must-have budget management tool. As part of the research, Key Travel surveyed 1,200 travellers and travel bookers across a range of not-for-profit organisations and staggeringly 17.2% of people did not know their organisation’s travel policy. Of those who knew it, 60% said that they did not always follow it because they believed it to be inappropriate. A simple education programme here could improve policy compliance and decrease those buying behaviours leading to the leakage of valuable funds without compromising the level of travel undertaken.

 

Further potential savings were identified if only travellers would book earlier. An analysis of travel booking windows found that the average booking window for clients was 24 days, resulting in ticket prices being, on average, £100 more expensive than if booked say 35 days in advance. Due to the nature of the work of charity and missionary travellers, booking at short notice cannot always be helped; however awareness of the impact of the difference a few days can make, could amount to savings of up to 30% on a single ticket.

 

Says Steve Summers, COO at Key Travel: “Too many of our not-for-profit clients are missing out on considerable savings, some by simply not booking at an optimum time and others for more frivolous reasons. At a time when everyone is looking at means to save money, where better to focus than the travel budget. A change in consumer buying behaviour will not only ensure more money is available to be used on the charitable projects it was intended, but will also appease those who are actually donating.

For more information about Key Travel please visit www.keytravel.com