International business travel spending is predicted to exceed $1.6 trillion by the year 2020. There are almost 500 million individual business trips per year in the US alone, and roughly half of those travelers do not inform their companies of where they will be staying, or the flights they have selected.
For the C-Suite, this staggering volume of business travelers (and staggering frequency of noncompliance) can translate into staggering costs.
Take into account employee overspending, which can constitute one third of a business’ entire travel and expense budget, and corporate travel can become an excessively high-cost item.
However, with the right technology and management strategies, businesses can simplify, systemise and save on their corporate travel programs. Below are five ways senior management can reduce corporate travel spend.
1. Systemize your travel program
Systemization is essential in an efficient corporate travel program. A streamlined booking, approval, expense and risk management process will increase the end-to-end speed of your travel management. Systemization will also enrich your Travel Managers with consistent insight into travel policy performance, so any improvements are backed by data.
Furthermore, a systemized corporate travel program ensures your business meets duty of care obligations and operates with sound risk management to safeguard you from financial and legal damages. For example, travel management platforms like Travelport Locomote feature automation technologies that alert Travel Managers of out-of-policy bookings, travel requests to high-risk destinations, and provide up-to-date security information.
2. Invest in travel management technology
Strategic businesses are using travel management technologies like Travelport Locomote that marry premium service with powerful cost control.
When considering investing in a travel management platform, there are a number of things that businesses should look for. These span from adopting tools to streamline processes, gather analytics, and improve policy performance, to using features that enrich the travel experience for employees.
Features for businesses:
- Travel management platforms must be holistic. They should cater to the entire travel management process, from the moment an employee submits a travel request, to the moment they return to submit their expenses, and beyond. Within this process lie functions like booking, approval, expense management, risk management, messaging and analysis.
- Your travel management platform must be integrated. For example, Travelport Locomote integrates with industry leaders in expense management, Expensify, to offer the best expense solution possible for your program. Travel management platforms that do not integrate with other programs can be rigid and inflexible to market changes.
- Your platform must allow for continual improvement. A streamlined travel management program should enrich your Travel Managers with insight into every aspect of policy performance, so improvements are data-driven and strategic. For example, the Travelport Locomote platform offers powerful analytics tools so Travel Managers can dissect policies, identify areas of improvement, and action effective improvements. Our automated audit reporting provides your business with insight into everything from travel company response times and workflow approval times, through to your traveler’s booking history.
Senior management should recognise that the comfort and convenience of their staff when they're traveling has a direct correlation to the success of their business trip. Which is why an intuitive, user-friendly and rewarding travel management platform is essential for employees to get the most from corporate travel.
Features for employees:
- An effective messaging system that allows travelling staff to keep in contact with the home office.
- Visibility into expenses and travel policies, to remove room for misunderstanding and reduce noncompliance.
- Reliable risk management features with up-to-minute safety advice.
3. Take an active role in travel management
Just 27% of CFOs report that their relationship with Travel Managers is effective. To make strategic improvements to travel policy, businesses need strong collaboration between senior management and those who oversee the company travel program. Senior management should thus take an active role in their business’ travel management program, whether that be with collaborative analysis of policy performance, or by gathering first-hand feedback from traveling employees.
4. Cater to the new breed of corporate traveler
Millennial travelers will account for half of all business travel spending by the year 2020 (a figure predicted to reach $1.6 trillion). Senior management must address the divergent preferences of younger traveling staff in order to reduce travel spend and capitalise on their strengths. For example, one Hipmunk survey of Millennial business travelers found that they are more likely to include leisure days on a corporate trip and more likely to pay for ancillaries.
In collaboration with Travel Managers, senior management should study the habits and preferences of Millennial corporate travelers, and account for these in strategic travel policies.
5. Do not leave your travel policy untouched
It’s often said that in corporate travel, the best policies are always evolving. With the emergence of disruptive technologies that present new avenues for booking, new ways to connect, and new ways to conduct business overseas, senior management must ensure their business’ travel program is responding to market changes and capitalising on opportunities for cost savings.
These policy improvements must be backed by data, which is why a corporate travel management program with analytics and reporting capabilities is essential.
One of the main goals of a key client of ours (CUA) when introducing Locomote was to cut the cost of their travel spend. A big part of that saving lies in the way the platform naturally engenders a behavioural change in employees, and allows them to have a granular understanding of where their spend is going while enabling them to save costs in how they pay for travel.