Does Your Company Need To Update Its Travel Policy?
New research by American Express Global Business Travel outlines gaps and opportunities for companies to strengthen managed travel programs by focusing on their travel and expense policies early this year. Analyzing nearly 100 travel policies of global, multinational, and mid-sized companies, the research shows less than one third of these companies overall have updated their travel policies within the last year. This oversight can leave companies exposed to losing hard-earned corporate negotiated rates, and more importantly, may put travelers at unnecessary risk.
“It’s a new year and with any good business practice, corporate travel departments are setting goals, including bringing their programs in line with the competition and external marketplace dynamics,” said Christa Degnan Manning, director of EXPERT INSIGHTS research, American Express Global Business Travel. “However, like many improvement resolutions, reviewing and revising travel policy tends to get neglected. Yet a healthy travel policy can help companies achieve long-term success. Policies can support business-critical goals such as risk mitigation and employee engagement, as they touch on issues from traveler safety and security to corporate social responsibility.”
This new Best Practice Roadmap report on Travel Policy, produced by EXPERT INSIGHTS, shows many organizations still need to close the gap between their policy content and emerging industry trends.
Highlights of the policy gaps exposed in this report, based on 100 corporate policies reviewed, include:
- Only 12% addressed traveler security despite it being a critical issue for companies to consider as more and more employees embark on worldwide business travel today
- 80% did not address reimbursement of ancillary fees such as checked bags, reservation change fees, or other for-purchase services offered at hotels and car rentals
- Only 35% of smaller companies and large international organizations require an agency to book hotels, compared to 85% of global companies
- None of the travel policies addressed the use of mobile applications or even referenced tools they may have available for travelers to use on the road or when working remotely
- 70 percent of companies do not provide specific guidelines to travelers on when it makes sense to book airfares through a non-preferred supplier if the ticket price is less expensive
“Policy is the foundation of a successful managed travel program and maintaining this infrastructure by conducting regular check-ups is paramount,” said Helen Brough, Advisory Services Global Policy Practice Director, American Express Global Business Travel. “In our policy practice we have identified over 300 areas companies should be reviewing in their policy for the best outcomes – for the company, for the traveling employees, and for ultimate travel management program success. Companies that are most successful are those that regularly review and update their travel policies based on changing market conditions as well as focus on communicating those policies to their travelers.”
FILLING THE GAPS
- Security: Companies should provide guidance to their travelers for the range of areas associated with security, such as how to prepare for a trip, what to do during a trip, and after travel, particularly when traveling to high-risk destinations. Guidance around what to do during a travel emergency or disruption should also not go overlooked in policies, as well as information on security around company assets.
- Fees: Addressing the various fees that travelers are confronted with while on the road remains a policy opportunity. It should be made easier on travelers in understanding what is reimbursable as well as being made aware of waived fees and other benefits associated with booking with preferred suppliers, such as free checked baggage on airlines or complimentary wi-fi as part of a hotel rate.
- Hotel Compliance: Safety and security rank at the top of the list of reasons for traveler compliance to hotel policy. Knowing the city to which a traveler is headed is only half of the equation, particularly when locating travelers in an emergency. This area also poses the greatest area of leakage in travel policy, compromising negotiated rates when booking hotels outside of policy. Companies should communicate to travelers the reasons for booking hotels at the same time as air reservations.
- Mobile Technology: There have been advancements in travel technology that can help business travelers manage trip details before, during and after traveling. Company supported mobile applications can be used to facilitate communication, both during critical issues like travel emergencies and for day-to-day support, including policy and traveler benefits notifications. A successful travel policy should include rules for these resources, and help travelers find and take advantage of them to save time and increase compliance.
- Addressing Lowest Logical Airfare: Companies increasingly have introduced language instructing employees to find the lowest fare possible, regardless of whether or not a flight is with a preferred supplier. The reality of this practice is that the individual trip savings by booking cheaper fares with non-preferred airlines can jeopardize negotiated rates, unintentionally driving up overall travel costs over time. Guidelines should be established indicating when this practice should be used. Recent capacity constraints, merger and acquisition activity, and even low-cost carrier dynamics require that travel managers revisit this concept and communicate it appropriately in policy.
The one thing companies can’t afford not to do: UPDATING TRAVEL POLICY. Less than one third of companies have updated their travel policies within the last year according to new research from American Express Global Business Travel.
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