But do they? Without a doubt, D’Astolfo says — especially when faced with the prospect of explaining their choices to their boss. “A lot of times an on-screen reminder that tells someone that their boss will know they made a less-than-optimal reservation will change their behavior,” he says.
Hold Employees Accountable
Technology can also be used on the back end. Concur, which provides T&E software, can pinpoint every cost discrepancy between the trip as planned and what actually transpired “with just the push of a button,” says co-founder Mike Hilton, executive vice president of marketing. “Nothing gets by.”
But it may be the proverbial “tone at the top” that counts the most. While it can be helpful for a company to announce that anyone who makes reservations within 14 days of a trip (and therefore too late to reap discounts on airfare or hotel rooms) needs to seek approval from a manager, that message carries more clout when it comes from the CFO — and when it’s accompanied by strong evidence that the CFO didn’t just sign the memo but is enforcing its contents. Volt’s Egan approves every executive’s expense report himself. “They know I am right there in the weeds with them,” he says.
It’s also important to show employees that management is abiding by the same T&E rules it has mandated for the rank-and-file. As a CFO, don’t hesitate to announce that the Miami meeting is being rescheduled for the off-season, or moved to Fort Lauderdale, or reconceived as a Webinar. Have everybody stay in one hotel, rather than dispersing to three. Better still, find an old college roommate who can put you up at his place. A futon — at your age? Why not. Setting that kind of example will inspire your employees to make sure every dollar travels as far as it can.
Josh Hyatt is a contributing editor of CFO.
The market for corporate jets is grounded.
You can get a great deal on a corporate jet nowadays, but be forewarned: the idea isn’t going to fly. In fact, just raising the notion may get you ejected from a board meeting. “To own a corporate jet now is a bad thing,” says aviation industry consultant Mike Boyd. “It’s widely viewed as a toy, not a tool.”
In fact, the political climate has driven many corporations to downgrade their fleets. In December, Starbucks took delivery of a $45 million Gulfstream G550 — which it put up for sale just a month later. Around that same time, Citigroup canceled delivery of a $50 million jet. In fact, aviation consultant Brian Foley estimates that in March roughly 20% of corporate jets were up for sale, double the number that would typically be available.
It ought to be a buyer’s market for used business jets, with prices descending about 30% since last year, according to Foley. But the reputational cost has soared. Last fall, Congress effectively grounded the jets by publicly castigating the CEOs of the Big Three automakers, who famously used their corporate rides to fly to the nation’s capital in search of bailouts.
The fallout has also extended to so-called air-taxi companies, once touted as cheaper alternatives. Several have gone under, as have the manufacturers of the VLJs (very light jets) that were to form their fleets.
Many argue that paying at least $2.5 million for a company jet isn’t as extravagant as it might sound. A corporation with satellite divisions can maximize management’s time by flying point-to-point, landing at smaller airports, with executives working all the while rather than waiting to slip past the beverage cart en route to the rest room.
If you think your board might be receptive to that argument, you might want to hold off anyway: Foley says prices for used jets could drop another 15% before the business shows signs of recovery in 2010. Financial recovery, anyway. The stigma associated with corporate jets, he says, “will live much longer.” — J.H.