Corporate travel is one of the largest expenses that a business can incur, but it is also one of the most controllable. According to the Global Business Travel Association, (GBTA) spending on business travel is likely to increase by 3.7 percent in 2016, meaning an even larger impact on the business bottom line.
In addition to is being a significant expense; corporate travel management is a key component to SME business plans. Scheduling face-to-face meetings with clients or attending a new product launch on-site can create new business, increase profits and successfully contribute to overall business goals.
As the Travel Manager in your organization, how can you increase the return on investment (ROI) for corporate travel?
Position corporate travel management as a company investment
A managed travel program gives control, compliance, safety and support to both your business and your travelers. When corporate travel is managed poorly, this greatly reduces the potential for a positive ROI. Dollars are lost through outside-of-policy booking; time is wasted through expense reconciliation; safety for travelers is at risk if their itinerary is incomplete and both leadership and travelers feel a lack of company support.
It’s critical for Travel Managers to strategically position travel management as a necessary investment and demonstrate how it will increase ROI. Following are solutions that can help.
Develop and communicate a clear travel policy
GBTA states that setting a clear corporate travel policy and enforcing it consistently are two of the most important steps you can take to reduce travel costs. Your travel policy is the engine that drives everything related to your travel management process, and works to balance the needs of your employees who travel, with the needs of your business.
The travel policy defines all areas related to travel including preferred suppliers, travel requirements based on security and safety and expectations on ancillary fee management. Adhering to policy not only reduces expense, but saves time for employees, increasing their productivity.
As you consider the positive impact of travel on the bottom line, and subsequent increase in employee time on the road, consider traveler preferences and specific “soft” benefits that will support your road warriors. Seat upgrades on international flights, flexibility with work requirements while traveling and the ability to add on a personal day (or two) at the end of trip will encourage and refresh travelers, increasing their willingness to travel again. Be sure these added extras are clearly stated in your travel policy.
ROI for trips that are compliant to policy positively impact your business bottom line providing a decrease in trip expenses and increase traveler satisfaction.
Set expectations for each trip
Many times traveler ROI decreases because your business leadership and your business traveler aren’t clear on the expectations and results of travel. Determine a shared set of goals and objectives between managers and travelers on what each trip needs to accomplish such as:
- A client meeting resulting in additional business
- Multiple client meetings to assess how a current project is going
- Education and/or training that will benefit your business
- Networking opportunities with prospective clients
Once expectations and the purpose of travel is determined, it’s much easier to consider what employees should bring back as a result of travel. ROI can be determined based on the following, for example:
- Additional clients resulting in increased profits
- Increased visibility within your industry resulting in added awareness and potential new business
- Product/service knowledge to improve current business strategy resulting in time and productivity savings for employees
- Increased traveler satisfaction and confidence in travel purpose
Through a clear determination of trip goals and leadership expectations, the traveler and business can accurately assess the ROI from a specific trip. It’s also important to be clear on traveler expectations during the flight time and “down” time during travel. Determine their overall bandwidth for other projects depending on the purpose of the trip, and adjust accordingly.
When travel goals are clear, travelers are able to focus on generating positive results that can positively impact the bottom line, increasing ROI for their trip.
Develop a measurement and reporting strategy
Consider what pieces of the travel you’d like to measure. Is it simply the cost of airfare, hotel and car rental? Are ancillary fees (like seat upgrades, Wi-Fi expense or client entertainment costs) increasing the overall expense of each trip? Is it the health and happiness of your travelers?
Once you’ve decided what needs to be measured, set benchmarks based on the overall travel goals. If the goals of corporate travel are to secure a new business contract with a current client, ancillary fees may be larger because of client dinners or other entertainment. If the goal of travel is the investment in additional employee knowledge, set long-term benchmarks regarding how each traveler’s new knowledge and information will impact business in the future.
Once benchmarks are established and measured it’s critical to report ROI benefits from the trip. Through automation, travel and expense line items can be accurately measured, reporting trip cost versus benefit, and trip-specific details relating to ROI.
Efficient reporting through automation helps with data control and employee productivity, and allows you to assess travel ROI and provide positive strategic insight.
Decide what actions need to be taken for ROI improvement
Following the above tactics will help improve traveler ROI. If your return on investment is not as expected, it’s critical to review all aspects of travel and develop an action plan for ROI improvement.
- Reassess trip expectations and goals and determine success and failures based on this information.
- Review and update your travel policy. Be sure your policy clearly states the role of corporate travel within your business, and procedures that employees need to follow to stay within compliance.
- Gather road warriors and leadership to determine best practices for increasing employee productivity and support during travel. If travelers understand how their adherence to policy increases program savings, they are more inclined to stay compliant. In turn, your leadership team should have realistic expectations of employee productivity while travelling to enhance the traveler experience.
Continued review and assessment of trip goals and corporate travel expectations will help determine the positive action needed to increase traveler ROI.
Consider the use of a travel management company (TMC)
When working with an exceptional TMC, expect an increase in ROI. Through strategic travel leadership TMC’s can ensure a positive ROI for businesses through increased control with automated travel and expense management tools, leveraging supplier discounts for increased savings and development of a travel policy resulting in traveler compliance. Increases in traveler safety and productivity are also realized. Working with a TMC can decrease bottom line travel spend by 10-20%, thereby increasing corporate travel ROI.
Corporate business travel is an important and expensive piece of your business’ success. Yet adherence to travel policy, clear communication, collaboration on trip expectations, efficient measurement and continual improvement will increase trip ROI and support your corporate travel management investment. Have you considered working with a TMC? We invite you to learn how a TMC provides this support by reading TMC’s- What They Mean for Your Company.