Travel Policy Do’s & Don’ts: Lessons Learned from Real Business Travel Management
TravelBank staffers Connor Lawrence, Corey Walker, and Natalie Farr recently presented “Travel Policy Do’s and Don’ts: Lessons Learned from Real Travel Policies,” the second in our webinar series. The recording is available and below we’ve covered the business travel management highlights, including five common policy traps.
1. Approving Travel
There are a wide range of policy options, from requiring approval prior to every booking, to never requiring approval. Approvals can become very costly if you don’t structure them properly. One TravelBank customer realized they were previously having an issue when managers were taking from 24 to 72 hours to approve each trip. In that duration, the rates could increase or completely sell out. A lengthy approval process will also increase a travelers’ frustration. Whereas if your policy is too loose, some will overspend. You need something in the “Goldilocks zone.”
TravelBank’s budgeting tool calculates the cost of each trip using real-time data based on your exact search dates and destination city, providing accurate averages for flight and hotel costs. TravelBank customers can allow their employees to book underneath the budget without manager approval.
2. Rewarding Your Team
To further drive down costs, you can offer employees an incentive to spend below the budget. With TravelBank, you can offer tax-free rewards in the form of gift cards that employees can redeem for services they use every day.
“At TravelBank, I’m always looking for the best deal because I want to earn those Amazon and Airbnb credits. It’s just made me more aware of my spending patterns and is a win-win for both me and TravelBank,” explained Natalie.
Many TravelBank customers are finding that the employees earning rewards are beating their budget almost every time, and even competing with one another to earn the most. Rewards can also boost adoption of your new business travel management tool.
3. Hotel Policy
Some companies apply a blanket cap of $200 or $250 per night for any location or conduct extensive research to set max nightly rates for each major city the company travels to. However, variability in travel prices due to not only destination, but also travel dates, advance booking, and market availability means that fixed spending guidelines are of limited use. Additionally, a hard cap tends to drive the wrong behavior, as people book all the way up to it.
TravelBank provides real-time data on the average trip cost for comparison, providing both accountability and realistic budgeting both for the traveler and the company.
Negotiated Hotel Rates for Business Travel Management?
Corporate negotiated hotel programs require a high level of maintenance, and there are many important things to consider such as:
- Are they waiving fees like parking and breakfast?
- Are they offering any additional amenities?
- Are they offering a percentage off the best available rate or a flat rate with blackout dates?
- Do you have travelers who have status, resulting in perks like free in-room WiFi, exclusive member rates, or waiving late cancellation fees?
Negotiating from $400 to $350 could be a nice discount, but not if there’s a nearby alternative for $250. Additionally, if you severely limit hotels, you’ll isolate your travelers, which can lose you money while creating a bad traveler experience.
Again, the Goldilocks zone is needed.
With TravelBank, you can trust that your travelers know best and offer flexibility, while providing policy guidelines that are comfortable to the finance team. You can also lean on TravelBank to negotiate on your behalf when it makes sense.
4. Booking in Advance
For business travel management, you have to build a policy that accounts for increasing costs but also rapidly changing plans. Unfortunately, the cheapest time to buy a flight is approximately 50 days prior, but that’s infeasible for most business travel.
While booking more than 14 days in advance is preferable, even booking a flight 7 days in advance can save you money. You can implement an advance purchase requirement as a suggestion rather than a hard stop and require a manager’s approval for anything booked within 14 days. This brings awareness to the traveler as well as the manager.
5. Expense Reimbursement
Employees traveling extensively could end up spending several thousand dollars and many have to wait to receive reimbursement by check once a month. Essentially loaning their employer money can be difficult for personal budgets and a negative experience for employees.
And that is in addition to the burden of effort for the accounting team. Some expense reimbursements systems, even popular apps, require tedious and time-consuming report preparation, as well as high costs for each expense report submitted.
To solve this, use the right technology to automate it, sync travel management with expense reimbursement, and include ACH for direct deposit. Alleviating these time-consuming chores drives a positive ROI, although it can be difficult to measure.
Don’t Overcomplicate Business Travel Management
A more complicated travel policy isn’t necessarily going to save you more money and it certainly won’t leave your employees happy. Create a policy that aligns your financial goals with your employees’ needs. Leverage incentives to drive better behavior, reducing costs and pleasing your team.
Education is a great place to start, and you can put policy education in the platform. Train your team on how they can best manage their travel. Considering having your travel management company conduct training. Use analytics to gain insights such as determining who your repeat offenders are so you can adapt your policies accordingly.