How to get better ROI on business travel.
How to get better ROI on business travel.
With the rising frequency and importance of business travel, the numbers have to add up.
In July 2023, we surveyed more than 200 travel and expense management decision-makers at US companies, and not only did they confirm these trends but also offered insights into what’s driving the recovery and how current patterns have made the management of business travel more complex.
Here are the key considerations for finance leaders like you who are in the same position and need to ensure they are tracking travel, automating controls, and improving ROI:
Nearly every company in our survey (98%) rated travel as important to achieving its business goals, with three-quarters declaring it “very important.”
More than 75% of companies in our survey said they had boosted their travel allocation in the last 12 months.
The shift toward hybrid work, now the most popular model for companies, is a primary reason for this increase — nearly half of respondents said that having more employees outside of company offices led to bigger travel budget
Below, we dig even deeper into what the data tell us about the state of travel today, and how businesses can implement solutions that solve today's common business travel challenges.
Most T&E solutions lack adequate automation & visibility.
Ease of use, which was cited as a “main challenge” by 42%.
Slow reimbursements (32%) and time-consuming expense approvals (32%) due to manual processes and lack of automation.
31% of respondents expressed problems integrating with other software, such as accounting systems.
29% highlighted difficulty with employees failing to submit documentation for their expenses.
Poor fee transparency also hinders ROI improvement.
Some 88% of leaders said cost savings and travel management fee reductions are a priority, and that they wish to implement strategies like restricting employees from booking expensive flight classes and requiring advance bookings and preapprovals for going over budget, two tactics used by 44% and 42% of companies, respectively.
Among our survey respondents, only 58% said that they understand all their fees, while 39% said they understand some but not all. When it’s a herculean effort just to find out how much you're paying for your corporate travel program — and you’re paying multiple SaaS bills for different types of spend — you’re constraining your ROI before anyone even sets foot on a plane.
Controlling costs is a top priority.
Part of the challenge is also that some companies are still settling into the groove of a distributed workforce. The fully remote companies that we spoke to said actual costs were higher than they had expected, and half of them said costs exceeded projections by a whopping 50% or more.
What companies need to improve the ROI of business travel: Real-time automation, tracking, and insights.
A strong motivation for this pursuit of automated compliance is accounting automation. When compliance is automated through auto-enforcement of policies, automated receipts, etc., accounting teams have everything they need to close the books quickly and cleanly.
Our recommendations for adapting to a new era of business travel.
Based on the data we gathered, these are the five overarching considerations and recommendations we compiled as you aim to increase the ROI of your travel program:
Evaluate the readiness of your travel policies and processes to empower employees to make the right decisions depending on their trip. For example, a generous or flexible travel policy may make sense for a sales executive going to close a new client that will drive revenue; a slightly stricter policy may be preferable for a team-building employee offsite that will have less obvious ROI.
Keep travel in check with user-friendly, AI-powered automation and controls that can help you automate T&E policy compliance, manage an influx in travel requests and approvals efficiently, and uphold duty of care.
Assess your T&E solution's ability to manage the pre-trip approval process and enforce policy compliance, especially in the context of rising interest in group events and executive travel. If you're using a TMC, you may enjoy the benefits of lodge cards. Modern T&E solutions can help you manage an influx of travel requests and auto-enforce policies at the time of booking.
Invest in event management capabilities that can help them plan, manage, and track group events like company offsite and related spend from a single centralized system. Tracking event details, RSVPs, and attendees through a T&E solution can help prevent overspending.
Address duty of care implications that are omnipresent in distributed workforces. Access to the real-time location of travelers can assist you in assessing risk, tracking, and communicating with travelers no matter where they are.
Next steps to automate travel and expense controls and improve travel ROI.
Travel solutions that are integrated with card and expense management software may allow companies to consolidate SaaS costs and embed their policies during travel booking, so employees will only see travel options that meet established rules. It’s the easiest way to control air, hotel, and transit costs and can lead to major savings.
Lastly, it’s important for companies to get a solution that gives them real-time visibility into how actual travel spending compares to budgets, and that provides AI-driven insights and alerts such as automatically detecting and flagging expense anomalies, concerning patterns, fraud indicators, or increases in MoM. This allows them to take swift action and ensure that travel dollars are delivering strong ROI and going to the most impactful purposes.
Evaluate the readiness of your travel policies and processes to empower employees to make the right decisions depending on their trip. For example, a generous or flexible travel policy may make sense for a sales executive going to close a new client that will drive revenue; a slightly stricter policy may be preferable for a team-building employee offsite that will have less obvious ROI.
Keep travel in check with user-friendly, AI-powered automation and controls that can help you automate T&E policy compliance, manage an influx in travel requests and approvals efficiently, and uphold duty of care.
Assess your T&E solution's ability to manage the pre-trip approval process and enforce policy compliance, especially in the context of rising interest in group events and executive travel. Modern T&E solutions can help you manage an influx in travel requests and auto-enforce policies at the time of booking.
Invest in event management capabilities that can help them plan, manage, and track group events like company offsite and related spend from a single centralized system. Tracking event details, RSVPs, and attendees through a T&E solution can help prevent overspending.
Address duty of care implications that are omnipresent in distributed workforces. Access to the real-time location of travelers can assist you in assessing risk, tracking, and communicating with travelers no matter where they are.