Travel Expense Management Key Terms

Understand more about how to manage business travel expenses by learning these key terms

Business travel can be costly. Therefore, managing expenses related to that travel has a real impact on a company's bottom line. While it's important that employees feel ownership regarding cutting travel expenses, it's also vital for medium and large businesses to have experts on staff to ensure the company gets the volume discounts and other expense-reduction perks it deserves.

Key terms to learn to understand travel expense management include key accounts, base fare, yield management, negotiated rate, economy plus, and hotel voucher.

 

Key accounts

Key accounts are a travel industry term for regular customers who can use their leverage to get a lower rate on travel or overnight stays. Becoming a key account with specific airlines and hotel chains will help businesses control travel expenses.
Try: BNET gives a more thorough definition of key accounts that can be applied to travel expense management.

Base fare

The base fare is the fare paid for air or train travel before tax or upgrades are added. Sticking to the base fare whenever possible helps control both private and business travel expenses.
Try: You can read about how taxes and add-ons affect base fares, and what you can do about it, in The Denver Post.

Yield management

Yield management is the practice of adjusting prices up or down depending upon demand. This is part of how two people on the same flight who purchased tickets at different times can pay different fares. Understanding yield management and the likely change times for rates will help manage travel expenses.
Try: Hotels use yield management since every empty room night is an unrecoverable resource. The explanations in this Hotel News Resource article apply to other goods like airline seats.

Negotiated rate

This is a rate negotiated by a preferred customer that is lower than posted rates. Negotiated rates are common in the hotel, rental car, airline and train travel industries.
Try: There is an interesting piece at Hospitality Net that describes how negotiated rates work and discusses improvements in their application within the travel industry.

Economy plus

Economy plus is an air travel term referring to a class of ticket in the coach section that has more space than coach but without the amenities of business class. Using economy plus tickets is a good way to wean some executives off business class travel and manage travel expenses.
Try: High Anxiety by Joe Sharkey sums up the value of economy plus in corporate travel as a response to a corporate crackdown on business class and first class travel.

Hotel voucher

Hotel vouchers can be obtained by frequent individual users or large corporate accounts. They represent prepaid hotel rooms at a heavily discounted rate. Using these vouchers will create upfront costs but lessen overall hotel travel expenses.
Try: The News & Observer goes into detail about how hotel vouchers are being used less and less. Cheap Voucher Store sells hotel vouchers to businesses.

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