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% 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.
Tips for Making Policy Connect to Travelers
"As today's global marketplace is constantly changing, and the logistics of capitalizing on growth in emerging markets make travel more complex than ever before, it is not enough to just develop a travel policy and assume that employees know what to do with it," continued Brough. "Companies should be actively leveraging and communicating their travel policy to employees and enlisting influencers within the company such as Human Resources, Security and Legal to support these efforts."
- Make it Accessible: There are many ways a company can address communicating to travelers and encouraging compliance, including using pre-trip tools, policy messages integrated at the point of sale and even prior to booking. Intranets and other portals can also provide a channel to communicate policy to help travelers make the right decisions.
- Appeal to the Traveler: If travelers do not understand their travel policy or know where to find it, it is unlikely that it will be adhered to or that travelers will be able to benefit from the perks. Most employees want to do the right thing by the business, so businesses need to let employees know what is in it for the company and for them. That way the traveler can benefit from the perks of following the policy and the company can benefit from travel policy compliance.
- Revisit for Relevancy: Establish a policy team with representatives from all stakeholders, including those that can represent the traveler, and charge them with the maintenance of the travel policy. Then communicate changes to travelers so everyone can stay current.
- Eliminate Uncertainty: It has been reported that one in four expense reports is typically sent back to the traveler for clarification or additional documentation support. Travel policy should take into consideration the process for expense reimbursement. The better a traveler understands the reimbursement process, the less time will be spent on re-doing these reports.
About American Express Global Business Travel
American Express Global Business Travel, a division of American Express Company, is a global industry leader in business travel and meetings management committed to helping businesses succeed through cost-effective program management, world-class customer service, and enhanced traveler productivity support worldwide. Through leading online, offline and on-the-go solutions, consulting services, business insights and research, supplier negotiation expertise, and meetings and events capabilities, innovative services are delivered to clients to maximize the return on their travel and meetings investments. Learn more at americanexpress.com/businesstravel interact with peers on businesstravelconnexion.com and follow us on facebook.com/businesstravelconneXion and twitter.com/btconnexion.
American Express operates one of the world's largest travel agency networks with locations in over 140 countries worldwide. Total travel sales volume processed in 2010 was $25.7 billion, including consolidated volume and non-consolidated volume processed through joint ventures and its partner network.
American Express Company is a global services company, providing customers with access to products, insights, and experiences that enrich lives and build business success.