Corporate travel management addresses all functions associated with supporting business travel for employees, customers, vendors and business partners. Companies may rely on in-house corporate travel management teams, travel agencies, online booking tools or any combination of those options to perform these functions. Corporate travel management policies create or enforce meeting and travel procedures while passing along travel data to accounting and finance systems and teams.
How Does Corporate Travel Management Work?
In addition to ensuring employees comply with a company’s travel policy, corporate travel management supports other tasks such as arranging business trips, establishing preferred arrangements with carriers (airlines, rental car companies, etc.) and hospitality providers, and issuing real-time reports that relay travel spend to accounting departments and other corporate stakeholders.
Why Is Corporate Travel Management Important?
Business travel management plays a key role in helping companies get the most out of their travel budgets by ensuring they are not overpaying for transportation and accommodations. It also establishes how employees arrange business trips and ensures all travel spend is allocated in the best interest of the company. A well-managed corporate travel program is also important to ensure traveler safety.
What Tasks Fall Under Travel Management?
- Meeting & Events
- Costs & Policy Compliance
- Travel Support
- Reporting & Data Analysis
Companies have different approaches when it comes to how employees create itineraries for their business trips. Considerations include cost, balanced with an employee’s business responsibilities and the company’s travel polices. In most cases, employees now use online booking tools to create their own itineraries. Some larger companies may have personnel or travel agency resources to create itineraries for senior leaders or those who travel frequently. Companies with a corporate travel program can configure travel management software with online booking tools to ensure travelers create itineraries that meet the firm’s travel guidelines while providing a mechanism for trip approval and the reporting of travel and expenses.
Corporate travel management is responsible for keeping costs in check, as travel prices are notoriously variable. Optimizing pricing can have a measurable impact on maintaining budgets and help companies fund more business trips without significantly expanding the budget. Corporate travel management can set guidelines for how much employees can spend on various travel costs, based on reasonable and customary prices in a given locale.
Some companies negotiate prices with certain providers, while others rely on agencies and other third parties who may have more leverage. Some might rely on both internal teams and a travel management company. Where it makes sense, companies should also leverage any business client relationships they may have with those who provide transportation, hospitality or other travel support functions.
Lodging costs are cyclical depending on economic conditions, location, time of year and other factors. The cost of accommodations also varies considerably throughout the world. Thus, corporate travel management may negotiate prices with major hotel chains or those who provide alternative accommodations such as Airbnb—or oversee an agency who does so. In addition to costs, businesses should consider accommodations that meet employees’ business needs and have favorable cancelation polices or are willing to waive certain fees.
When it comes to transportation, corporate travel management plays several roles, including determining the best mode of transportation for a given destination. It is the conduit through which employees make their arrangements with preferred carriers and ensures transportation arrangements comply with company polices.
Meetings and Events
Companies that host their own meetings and events need resources with which to book restaurants, hotels, convention centers or other venues that can accommodate everything from small executive meetings to large conferences. A corporate travel management team or tool facilitates these bookings.
For important meetings and events, the team will scout various venues and ensure each can meet the needs and budgets of a meeting or event. If it’s a major gathering that will bring together customers, investors or other influential stakeholders, corporate travel management teams will visit the venue. Besides evaluating the meeting facility, the team will ensure the surrounding accommodations and logistics are suitable.
Costs and Policy Compliance
Many companies require corporate travel management to not only set cost thresholds but also track and enforce employees comply with them. Ideally, corporate travel management ties compliance to reimbursement policies. Moreover, its systems should prevent employees from making arrangements that fail to meet the company’s policies.
Because circumstances at times may necessitate exceptions, corporate travel management should have flexible approval mechanisms. Many businesses also issue a corporate credit card, which allows for better tracking of travel and expenses, simplified travel booking, faster reimbursement and access to real-time data regarding employees’ costs.
Sometimes, corporate travel management teams will serve as a conduit between employees, their supervisors and accounts payable. Larger organizations may outsource this role to travel agencies, such as American Express, which have sophisticated travel management platforms. Some organizations will provide higher levels of support, such as arranging for transportation to airports, making dinner reservations or serving as a liaison to travelers when they need assistance. In both scenarios, other than top executives and VIP guests, employees are increasingly expected to rely on self-service tools to address common travel needs.
Reporting and Data Analysis
Corporate travel management must report all travel expenses to accounting. Finance departments use that information to not only track expenses incurred during an accounting period but also inform current and forward-looking budgets and forecasts.
Automated Travel Management vs. Hiring a Travel Manager
Until recently, companies had to decide whether to hire people to support and manage travel or to rely on outside agencies to oversee those functions and then let accounts payable departments enforce policies when reimbursing employee expenses. While some companies choose one or the other and others go with a blend of both, nowadays companies have the option to automate much of the travel management process.
Some business management platforms, for example, offer corporate travel management capabilities. Many of the leading platforms have features including expense management, analytics, client management and project management, which together serve to automate travel management. These platforms also give accounting teams real-time information on travel’s impact on financial performance.
How Is AI Changing the Travel Management Landscape?
Business travelers are now actively using tools to automate travel management. With recent advances in artificial intelligence (AI), they can now book a business trip with online booking tools even faster. For example, American Express Global Business Travel (GBT) is among the firms using AI to automate business travel planning. The global travel agency now has a recommendation engine that uses a traveler’s history to help find suitable accommodations when planning a trip.
But it is not just the giant travel agencies that are using AI to help automate business travel booking and related processes. Airlines, hotel operators and car rental agencies have started introducing chatbots to address routine inquires and issues. People are using voice commands for recommendations and to place reservations. These technologies are starting to appear in workforce automation, help desk and other business process management systems to enable increased self-service to routine processes.
The true potential of AI for corporate travel management comes from using all the data amassed by travelers to eliminate as many tasks in the planning of trips as possible, according to Travel & Hospitality magazine.
By analyzing how travelers across companies behave in creating their itineraries, AI automation tools can become more precise in predicting preferences, according to the report. “When preferences can be catered to without even asking for them, search time is heavily reduced, and traction is increased. Even shifts in traveler partners can be detected beforehand while negotiating with properties. Ultimately, an AI-powered recommendation mechanism could eliminate the dependence on potential complications of last-minute changes.”
Challenges of Corporate Travel Management
- Employee desire for flexibility and comfort can conflict with a company’s efforts to manage costs.
- Services that were once included in the cost of airfare or a hotel booking may now cost extra, creating disparities in company policies.
- Escalating cancellation or change fees are costly if employees make errors when booking.
- Company polices can often limit employees’ ability to choose lower-cost services that they discover on their own.
- Many companies still lack ways to calibrate the needs of the business with costs and changing business conditions when it comes to travel.
- Accounts payable policies are not always aligned with corporate travel management. The reimbursement process is very manual and requires significant resources to review and verify receipts for travel expenses.
How to Institute a Travel Management Policy
Every company should have a documented travel management policy and one that they enforce. The policy should be reasonable and ideally put together with input from employees who frequently travel. Gathering that input will reduce non-compliance, which by various accounts is high. Corporate travel surveys show more than half don’t understand or meet their companies’ travel policies. The Society of Human Resource Management, a non-profit trade association for HR professionals created a template that offers a baseline policy that companies can adjust to meet their own compliance requirements and what leadership believe fits within their organization’s best practices.
Trends in Corporate Travel Management
Business travelers expect every aspect of their trips to be accessible from their phones and their computers. Gone are the days of calling a travel agent to book their travel and submitting manual expense reports.
Businesses that can integrate all of the information pertaining to the planning of trips, expenses and how employees spend their time on the road are better positioned to determine the value they are receiving.
Improvements in technology and advances in AI are helping companies ensure they are receiving the most competitive rates, more flexibility and better visibility.
Best Tools for Corporate Travel Management
Many companies expend significant resources on corporate travel for business development, sales and marketing. Besides widely variable travel expenses, there’s a cost in terms of human capital management—organizations that use modern corporate travel management tools effectively are better positioned to get higher ROI.
Ideally, organizations should ensure their corporate travel management solutions are integrated with, or include, expense and vendor management systems. Likewise, organizations should integrate corporate travel management with core financial management and accounting platforms and resource and planning solutions.
On the front end, tracking expenses for travel has become easier now that employees can use their mobile devices to scan receipts when they receive them. As a result, many organizations have simplified their formerly paper-intensive expense management processes.
Accordingly, companies should make sure their expense management solution includes configurable mobile apps that can scan receipts and allow employees to easily itemize and categorize each expense.
Tools that can track polices will automatically reject unallowed expenses. The platform should offer flexible and configurable workflows that can avoid bottlenecks that delay approvals. The best expense management tools also offer connectivity with ERP, project management, accounting, billing, and analytics systems.
Travel expense management solutions that offer certified integration with leading platforms and help organizations reduce the amount of data entry among those in accounts payable departments. Likewise, they make it easier for employees to compile expense data, especially those that provide integration with approved credit card providers.