For companies spending about $250,000 on airfare annually, this type of budget allows you to explore 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 that you can convert into plane tickets, seat upgrades and airport club day passes. These operate in tandem with your individual traveler’s loyalty programs, so they will not lose their miles while you begin to collect points for corporate use -- but using these corporate reward points to get the most value takes careful planning and a deep understanding of how to work with legacy carriers.
What are ‘Soft Dollars’?
Soft dollar airline programs pay your company back for consolidating airfare spending with a designated carrier. When done well, you receive points in exchange for buying airfare that can be used for free tickets, upgrades and lounge day passes. To take full advantage of soft dollar program points, companies will use them to offset hard dollars that would have been spent on business travel airfare.
Perks like airline lounge access can make those weather and air traffic delays somewhat productive.
But how do you know which airlines to set up soft dollar programs with? The business travel experts at Travel Leaders Group analyze spending patterns and your company’s most popular routes to help identify the best match in an airline partner. We can implement and optimize a soft dollar program that is sure to become one of the most valuable plays in your business travel budget.
Soft Dollars: A Case Study
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 hard dollar 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 $50,000 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.
The Benefits Are Clear
Your company gains significant value for merging your airfare spend into a soft dollar program. Travel Leaders Group tracks how your airfare budget is spent so you can see just how much money you’ve saved by redeeming soft dollar tickets to pay for the more expensive flights. We ensure all eligible travelers are in the program and that your bookings are with the right airline. By using our proprietary booking system, your employees won’t have to remember to apply the program code to each reservation. And, Travel Leaders Group will steer you away from the program’s pitfalls – such as allowing your soft dollar points to expire. We’ll also make sure you don’t miss your spending target, as most programs require an annual revenue threshold or your program will be deactivated. It does no good to stockpile soft dollar points if you still have employees booking last-minute tickets with sky-high fares. Travel Leaders Group can monitor employee bookings to make sure you’re getting the maximum value from the program.
Your Employees Win Too
Another valuable use of Sky Points is for Delta airport Sky Club day passes. Cindy 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.”
Your employees reap the rewards of participating in a soft dollar airline’s loyalty program too. As your company racks up the soft dollars, they keep the miles and move up the status levels faster! With Travel Leaders Group, you can feel confident that every booking made through our online travel booking portal will receive credit. And for your company's most frequent flyers, perks like airline lounge access can make those weather and air traffic delays somewhat productive.
The Hard Truth and an Easy Solution
The truth is that you need to actively manage the program to see the most value, which is where Travel Leaders Group can offer major assistance. Our travel experts can advise you on when to use points for high-fare routes and how to distribute the plan’s perks to your hardest working road warriors, especially those valuable Business Class upgrades that keep your travelers happy.
Want to learn more ways to cut the cost of business travel? Read Tips for Negotiating Discounted Corporate Rates with Airlines & Hotels.