Big corporations spend huge amounts of money on travel each year. For instance, IBM's travel budget for 2004 was over $400 million. Fortunately, travel expenditures are somewhat controllable unlike many fixed business costs. Corporations, and even smaller companies can implement policies and programs that will cut their travel costs considerably. This is where travel management comes into play.

Large and mid-sized companies may have several divisions and offices. The different segments of each company may have a certain travel budget and are able to purchase their travel arrangements as they see fit. For some corporate offices this means buying airline tickets and making hotel and rental car reservations on the same travel websites that everyone else uses. There are business travel management companies that allow different divisions of a company to purchase tickets and make reservations online and save considerable money on travel costs.

Travel management companies can save corporations up to 20 percent on travel costs, which translates into a lot of money. Twenty percent of $400 million is $80 million! Travel management companies negotiate the best rates with the airlines, hotels, and rental car agencies. Travel management companies also act as monitors of corporate travel policies, and require authorization for any purchases outside of policy. This holds the individuals within the various divisions accountable when they book their travel.

Rewards Programs Abuse
Airline, hotel, and rental car rewards programs, like any incentive program can invite abuse. Division managers, salespeople, and other employees sometimes make travel decisions based on how it will personally benefit them, rather than what it will cost the company. Travel management companies safeguard the best interests of the corporation as a whole.

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