For a company that spends in the $250,000 range on airfare annually, there are some insider tricks to cutting business travel expenses. One of the most effective corporate incentive plans is referred to as a ‘soft dollar’ airline program, which rewards your airfare spending with points back that you can convert into plane tickets, seat upgrades and airport club day passes. But using the reward points to get the most value takes careful planning and a deep understanding of how to work with legacy carriers.
Soft Dollar Program in Action
Take the case of Cindy Starr, Senior Travel Consultant with Travel Leaders Group. She’s been running soft dollar programs since they were rolled out by the airlines and also spent 10+ years as an airline employee. All of the major airlines have similar loyalty programs, but Cindy’s on the phone with the Delta SkyBonus desk so often that they know her by name.
Travel Leaders Group has been working with a 3,000-person engineering and manufacturing company based in Atlanta, GA since 2007. Cindy manages their business travel program which has 92 participants, of which 25 are executive-level employees and a CEO who usually flies first class. Their business frequently sends employees on extended trips to Europe, with multiple stops in major capital cities for a week to 10 days, or longer. Cindy says, “I rarely book a simple roundtrip ticket. Sometimes I’m booking so many city stops that they literally go around the world.” This company’s travel policy specifies that employees who fly on international flights of 5 hours or more are eligible to fly in business class. So Cindy gets to work trying to book the best routing to allow travelers to fly in business class even if they have to make a stopover in another city.
Use Points for Upgrades
Cindy has found that the best value for the points is to upgrade an economy ticket into business class, instead of simply buying a business class ticket outright. Cindy states, “I have to get really creative. Although there are non-stop flights available, the upgrade seats can be hard to find. This is an account we take good care of, so we look at all kinds of ways to get them to Europe in upgraded seats.”
A guideline that Cindy follows is that the use of an upgrade certificate will save the company at least $2,000 over a regular purchase. A single transatlantic upgrade certificate requires 140,000 points, and two certificates are needed to upgrade a roundtrip ticket. Points are earned by airfare spending on domestic travel, and on the economy international fares that may eventually be upgraded.
Use the Plan for Significant Cost Savings
All of this time spent strategically booking air reservations pays off for clients. This company alone has saved about $170,000 in airfare spending in each of the last five years thanks to Travel Leaders Group’s management of their soft dollar programs. A recent example from Cindy: “A traveler flew to London and back from Paris last month. We used soft dollar upgrade certificates in both directions and saved $5,900 over the cost of a business class ticket.” Although Air France is a Delta partner, the upgrade certificates can only be used for flights on Delta aircraft, not code-share partners.
Add Value for Your Business Travelers
Another valuable use of Sky Points is for Delta airport Sky Club day passes. She recalls, “We had a big group of about 200 people coming in from Europe, China, Canada and the U.S. for an internal meeting. We used points for Sky Club day passes to not only keep them comfortable in transit, but also to maximize their time together in the same location.”
Is your company traveling frequently enough to warrant a look at significant savings opportunities? Take our quiz to find out if a managed travel program can help you save money on business travel.
Got an idea? Email Editor@ViewFrom36k.com to share your thoughts.