Corporate Travel Management Overview: Significance, Benefits, and Challenges of Corporate Travel Management

Long gone are the days when organizations would turn to corporate travel agencies as the sole antidote for the tedious process of organizing travel in-house. Corporate travel has since evolved from mere flight and accommodation booking to a fully-fledged function. Business managers have taken matters into their own hands and sourced self-service end-to-end travel booking solutions that are more inclined to their budgets in response to these developments.

Corporate travel management has seen greater prevalence as business leaders realize the need for personal interactions as a key facilitator of converting prospects into customers. Here, we explore the constituents of corporate travel management, its role in expense management, and its role in guaranteeing the safety and compliance of employees traveling on behalf of your business.

What is Corporate Travel Management?

Corporate travel management refers to the collective activities required to facilitate travel for business purposes. Travel managers and employees are responsible for organizing business trips, and negotiating with travel service vendors (airlines, accommodation providers, rental car companies). To make this joint effort a success, corporate travel managers turn to travel management solutions such as TravelBank for the collection of data at various touch points.

Elements of a Corporate Travel Management Strategy

Currently, stakeholders are facing a steady rise in a younger employee workforce with a different view of existing corporate travel objectives. This calls for a reorientation of the travel program to meet their needs without losing sight of the company’s objectives.

Below are the foundational elements of an effective travel management program:

1. Company Travel Policy

Corporate travel, unlike other types of travel, doesn’t encourage spending on leisure time and holiday getaways. Employees are expected to meet certain goals during the period of travel. The company’s travel policy exists to see that these preconditions are met. It seeks to enforce expense management, compliant booking practices, and employee conduct during travel for business purposes.

2. Travel Expense Management

Poorly managed corporate travel inflicts heavy costs on the business. The situation has been exacerbated by increased fuel prices, airline staffing shortages, and volatile geopolitical environments. Corporate travel management enables finance and accounting departments to not lose sight of these costs in light of these obscurities and identify potential areas for savings.

3. Travel Risk Management

Whenever employees are away from the premises, they’re exposed to greater risk. The salient security features at the workplace are not as readily accessible during travel. Often, travel risk assessment reports reveal that business travelers who are assaulted are accidental victims in the wrong place at the wrong time.

Travel risk management (TRM) can be better explained by the company’s duty of care actions; the employer’s obligation to protect their employees traveling on behalf of the company.

The Role of Corporate Travel Management

At minimum, corporate travel management enhances productivity at the employee level; by improving the quality of travel, traveling employees find it easier to focus on the purpose of the trip. 

Strategic oversight of corporate travel activities, facilitated by effective management, provides substantial benefits to key stakeholders. Travel managers acquire critical data for behavioral analysis and program enhancement, while employees are empowered to ensure compliance in their travel decisions. This strategic framework further enables top management to conduct precise evaluations of the travel program, thereby supporting more informed organizational choices.

Greater Cost Efficiency and Savings

Business travel accounts for the second largest operational cost in most businesses. In a deeper analysis, business travel costs spiral beyond air tickets, accommodation, and ground fare. Administrative costs such as contract fees for vendors, and invoice processing often go unseen despite their impact on the company’s budget.

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Other charges are incurred during the exchange of currency when employees travel abroad. Your comprehensive travel management program should address these costs, pointing travel managers to potential cost-cutting opportunities. And because travel managers are often well-known to supply chain vendors, they can negotiate better deals in favor of the company.

Enhanced Traveler Experiences

About 87% of business-related travelers feel that the quality of business travel greatly affects their productivity. Contributors to this sentiment narrow down to convenience, meals, and hostile working environments. Negative experiences are stress inducers that tend to weigh down employee productivity. A travel management program should take these factors into account and strive to develop hassle-free itineraries with the employees’ satisfaction in mind.

Compliance with Travel Regulations and Policies

Compliance with the travel policy is central to the success of the travel program. Fraudulent transactions should be met with active scrutiny to discourage future recurrence. Negligent spending should also be discouraged, and transparency be promoted in its place. Travel managers are tasked with making clear and unbiased interactions with the supply side of business travel in support of transparency.

Risk Mitigation

While security risks can pose challenges for traveling employees, travel managers need to be aware of additional travel risks that may befall the company.

• Sensitive data security risks for data handled by travel management companies
• Inherent risks from third-party relationships
• Non-compliance risks from non-adherence with the travel policy

Comprehensive risk assessment enables travel managers to monitor thoroughly the potential risks involved and keep employees safe during the course of the trip.

Corporate Travel Management Best Practices

In a pushback against overspending, employees should coordinate with travel managers about developing a cost-aware corporate travel program. Beyond these expectations, the travel program clearly lays down the expectations for employees when it comes to travel booking procedures, preferred vendors, expense reporting, and reimbursement.

Develop a Travel Policy

A travel policy is more than a rule book. Beyond setting guidelines and procedures that employees must adhere to when making travel arrangements, a travel policy serves as a guide to responsible financial conduct. It lays down the approval and reimbursement conditions for out-of-policy bookings.

Establish Clear Approval Processes for Employees

Assigning different roles and responsibilities comes at the behest of the travel manager. With regard to spending limits, setting aside spending limits and having a well-defined approval process secures greater control over travel expenses.

Use a Travel Management Solution

Modern travel management solutions, unlike relic travel agencies, offer an extensive inventory of flights and hotels sourced directly from the Global Distribution System (GDS). Everything you need to exert control over employee spending – from card reconciliation, expense reports, analytics, and insights to control spending – is made available on a single dashboard.

Seamless integration with accounting software, customer relationship management (CRM), card management, communication tools, single sign-on, and identity management integrations used by the company amplify these capabilities, enabling robust collaboration between departments with traveling employees.

Challenges of Corporate Travel Management

Managing corporate travel presents various setbacks that travel managers must counter, in pursuit of efficient and cost-effective operations.

• Cost management: Efficient cost management in business travel can be made a reality through travel management software. Corporate travel management services can provide businesses with a refined approach to managing their travel expenses.
• Technology integration: Although the benefits of integrations with HR software, ERP, or other tools used by the company are vast, achieving seamless integration doesn’t come without its setbacks. Security challenges pose costly implications for business travel; successful hacks not only lead to massive heists in personal employee data, they also inflict heavy fines and fees on the company. 
• Ensuring traveler safety and security: Organizations exercise limited control over the security situation outside their jurisdiction. Traveling employees may soon find the safety burden on their shoulders outside their work premises. However, companies can provide assistance services, such as 24/7 emergency hotlines and incident response teams that help travelers navigate difficult environments.
• Enforcing traveler compliance: Unfortunately, no amount of governance can guarantee 100% compliance with the travel policy. One of the key ways a travel management solution helps oversee the highest traveler compliance is through real-time notifications and updates regarding employee spending and approval workflows for certain expense limits.

FAQs

What approaches do companies take in corporate travel management?

Often, larger corporations take a departmental approach, where they have a dedicated department managing all aspects of corporate travel. This department handles everything from booking flights and accommodations to ensuring compliance with company travel policies. To achieve this, they are aided by an end-to-end travel management platform that brings online booking tools, expense management systems, and 24/7 customer support under one roof.

What are the six 6 phases of corporate travel management?

The six phases of corporate travel management are as follows: travel policy development, supplier sourcing and negotiation, travel booking and reservations, travel expense tracking and reporting, travel risk management, performance measurement, and analysis. Together, these phases drive cost savings, compliance with travel policies, and the identification of areas for improvement in future travel programs.

What is an example of corporate travel?

A good example of corporate travel is a business trip arranged for a team of delegates to attend a conference in a foreign company. Here, executives, sales representatives, and marketing professionals can be called upon to travel on behalf of the company to showcase its products at the industry event.

What are some strategies for reducing travel costs?

Travel management services are one way to reduce travel costs. These services often benefit from their long-standing partnerships with hotels, airlines, and transport companies, in the form of negotiated rates. Loyalty program memberships further amplify cost savings for the company. Many hotels and airlines offer loyalty programs that reward frequent travelers with redeemable points or discounts. 

What are the common issues with corporate travel management?

Corporate travel managers point to non-compliance with travel policies, data security, visibility, and control as major challenges while managing the travel and expenses of their employees. Additionally, micromanagement can erode trust between the company and the employees. This can cause tension and result in decreased morale.