Effective cost management is crucial to a company's success in today's highly competitive business environment. One of the most significant expenses for many organisations is business travel.
As travel managers, optimising the return on investment (ROI) for your company's business travel program is essential to reduce costs, enhance employee satisfaction, and, ultimately, improve the bottom line.
This comprehensive guide will explore various strategies and tips for travel managers to optimise their business travel programs, focusing on cost-effective transportation and accommodation choices. By implementing the recommendations outlined in this guide, travel managers can maximise the ROI of their business travel programs and positively impact their organisations.
Transportation optimisation
Transportation is often one of the most significant costs associated with business travel. As a travel manager, optimising transportation choices can lead to substantial cost savings and better employee travel experiences.
By implementing the following transportation optimisation strategies, travel managers can significantly reduce transportation expenses while still ensuring employees a comfortable and efficient travel experience:
Choosing the best mode of transport
To make the most efficient use of time and resources, consider the following factors when selecting the mode of transportation for your employees:
Cost: Compare prices across different transportation options (air, rail, car, etc.) to find the most budget-friendly choice.
Distance: Ground transportation (such as trains or car rentals) may be more time and cost-efficient than air travel for short distances.
Time: Evaluate the time spent on each mode of transportation, including layovers, transfers, and potential delays, to select the most efficient option for the specific business trip.
Maximising rewards and benefits from airline and rail loyalty programs
Enrolling your company in airline and rail loyalty programs can lead to significant cost savings and additional benefits such as priority boarding, free baggage allowance, and lounge access. Encourage employees to use the same airlines or rail providers to accumulate points and achieve higher membership tiers, unlocking more valuable perks.
Evaluating alternative airports and routes for cost savings
Sometimes, flying into or out of a smaller or secondary airport can result in lower fares without causing significant inconvenience. Additionally, consider alternative routes or layovers that may offer cost savings, as long as they don't negatively impact employee productivity or trip objectives.
Group and negotiated rates for air travel
Negotiate with airlines for better rates on group bookings or establish long-term agreements for discounted fares. Consolidating your company's air travel with one or a few preferred airlines can lead to better negotiation leverage and reduced costs.
Utilising ride-sharing and car rentals effectively
Depending on the destination, ride-sharing services or car rentals can be more cost-effective and convenient than taxis or public transportation. Evaluate local transportation options and establish partnerships with ride-sharing or car rental providers to secure discounts or corporate rates for your company.
Accommodation Optimisation
Optimising accommodation choices can lead to significant savings and improved employee satisfaction. Here are some ways to help you make the most cost-effective accommodation decisions:
Leveraging corporate discounts and negotiated rates with hotels
Establish partnerships with hotel chains or individual properties to secure corporate deals and negotiated rates. Consolidating your company's hotel bookings with preferred partners can result in better rates, improved service, and additional perks, such as complimentary breakfast, Wi-Fi, or upgrades.
Considering alternative lodging options
Besides traditional hotels, consider serviced apartments or Airbnb for Work as alternative lodging options. These choices can offer more space, comfort, and cost savings, especially for extended stays or group bookings.
Maximising hotel loyalty program benefits
Enrol your company in hotel loyalty programs to earn points, unlock exclusive discounts, and enjoy additional benefits such as late check-out or room upgrades. Encourage employees to stay at properties within the same loyalty program to accumulate points and achieve higher membership tiers, further enhancing the program's value.
Utilising dynamic pricing and last-minute booking platforms
Take advantage of dynamic pricing and last-minute booking platforms to secure discounted rates on hotel rooms. However, ensure these platforms align with your company's travel policies and do not compromise employee safety or convenience.
Evaluating the cost-effectiveness of extended-stay accommodations
Extended-stay hotels or serviced apartments can offer better value and more comfortable living arrangements for longer business trips. Compare the cost and amenities of various extended-stay options to determine the most suitable choice for your employees' needs.
Travel policy compliance
A well-defined and consistently enforced travel policy is crucial to achieving the best ROI on your business travel program. It helps control costs, ensures employee safety, and aligns travel decisions with your company's goals and values.
Establishing clear and flexible travel policies — Develop a comprehensive travel policy that outlines the acceptable parameters for transportation, accommodation, meals, and other expenses. Ensure the policy is straightforward, easy to understand, and flexible enough to accommodate the diverse needs of your employees. Regularly review and update the policy to stay current with industry trends and best practices.
Implementing pre-trip approval processes to control costs — Incorporate a pre-trip approval process to manage travel expenses proactively. This process enables travel managers to review and approve travel plans before booking, ensuring that employees adhere to the company's travel policy and budget constraints. Pre-trip approval can also help identify cost-saving opportunities and prevent last-minute changes, often resulting in higher costs.
Ensuring employee compliance with travel policies — Educate employees on the importance of adhering to the travel policy and make it easily accessible through the company's intranet, travel management software, or mobile apps. Foster a culture of accountability by monitoring compliance and addressing policy violations promptly and consistently. Regularly review travel data to identify patterns of non-compliance and implement corrective measures as needed.
Monitoring and analysing travel data for continuous improvement — Track and analyse your company's travel data to identify areas of improvement, potential cost savings, and trends in employee preferences. Use this data-driven approach to refine your travel policy, negotiate better rates with vendors, and make more informed decisions about your business travel program.
By implementing a robust travel policy and ensuring compliance, travel managers can effectively control costs and optimise the ROI of their business travel program. This, in turn, contributes to a more efficient and cost-effective business travel experience for both the company and its employees.
Use technology to your advantage
Incorporating innovative technologies and cutting-edge tools can revolutionise how travel managers handle their travel programs in the ever-evolving business travel landscape. These advanced solutions contribute to time savings, cost reductions, and improved compliance while fostering better decision-making and maximising the ROI of your company's business travel investments.
Adopt next-generation travel management platforms for seamless booking and expense monitoring
Invest in a state-of-the-art travel management platform that offers a unified, intuitive experience for managing bookings, tracking expenses, and handling travel data. Such platforms help enforce travel policies and manage approvals, ensure compliance, and simplify the booking process for employees.
Empower employees with cutting-edge mobile apps
Promote sophisticated mobile apps for booking, itinerary organisation, and expense reporting among employees. These advanced apps offer real-time updates, easy access to travel documents, and straightforward expense submission, leading to time savings, reduced errors, and enhanced compliance.
Capitalise on data analytics tools for data-driven decision-making
Utilise advanced data analytics tools to unlock valuable insights into your company's travel patterns, spending tendencies, and potential cost-saving opportunities. Analysing this data allows you to detect trends, fine-tune your travel policy, and negotiate more favourable rates with vendors, ultimately empowering travel managers to make well-informed decisions that boost the company's ROI.
Integrate AI-powered solutions for personalised travel experiences
Implement AI-powered solutions that offer personalised travel recommendations and dynamic pricing based on employees' preferences and historical data. These solutions can help identify cost-saving opportunities while ensuring a tailored travel experience for employees, balancing cost-efficiency with satisfaction.
Streamline processes with seamless corporate systems integration
Connect your travel management platform with essential corporate systems, including human resources, finance, and procurement. This integration leads to more efficient expense management, enhanced reporting, and a comprehensive view of your company's travel program, ultimately enabling better decision-making and improved ROI.
Sustainability and Corporate Social Responsibility
As environmental concerns and corporate social responsibility become increasingly crucial in business, incorporating sustainable practices into your company's travel program is essential. In their annual sustainable travel report, Booking.com found that 81% of global travellers claim that sustainable travel is important to them.
By focusing on eco-friendly travel practices and balancing cost savings with employee well-being and company values, travel managers can contribute to a more responsible and sustainable approach to business travel.
Encouraging eco-friendly travel practices
Promote environmentally friendly travel options, such as choosing airlines with lower carbon emissions, utilising ride-sharing services, selecting fuel-efficient rental cars, or opting for rail travel when possible.
Supporting carbon offset programs
Consider implementing a carbon offset program to counteract the environmental impact of your company's business travel. By investing in projects that reduce greenhouse gas emissions, your company can take responsibility for its travel-related carbon footprint and contribute to global climate action.
Prioritising green hotels and accommodations
Include green hotels and eco-friendly accommodation options in your travel policy. Look for properties with environmental certifications, such as LEED or Green Key, and prioritise those implementing sustainable practices, such as energy and water conservation, waste reduction, and locally sourced food.
Balancing cost savings with employee well-being and company values
While optimising the ROI of your business travel program is crucial, it's essential to balance cost savings with your employees' well-being and your company's importance. Ensure that your travel policy and practices align with your company's commitment to sustainability, employee satisfaction, and ethical conduct.
Educating employees about sustainable travel practices
Provide resources and training to inform employees about the importance of sustainable travel and how they can make eco-friendly choices during their trips. Foster a culture of awareness and accountability, encouraging employees to actively contribute to your company's sustainability goals.
By implementing these strategies, travel managers can create a more responsible and sustainable business travel program that aligns with their company's values and environmental commitments. This approach helps reduce the environmental impact of business travel and contributes to a positive brand image and improved employee satisfaction.
Measuring the success of your business travel program
Establishing key performance indicators (KPIs) and consistently monitoring your program's performance is crucial. By consistently monitoring the performance of your business travel program, travel managers can ensure that their strategies deliver the desired ROI.
Regularly reviewing your program's performance and adjusting your approach as needed will help you create a more efficient, cost-effective, and satisfying travel experience for your employees.
Define KPIs — Identify KPIs that align with your company's travel goals and objectives. Common KPIs include travel spend, cost savings, policy compliance rate, booking lead time, employee satisfaction, and environmental impact.
Track travel spend — Monitor your total travel spend and savings achieved through your travel program optimisation efforts. Analyse this data to identify trends, evaluate the effectiveness of your cost-saving measures, and uncover opportunities for further improvement.
Assess travel policy compliance — Measure the rate of policy compliance among your employees to gauge the effectiveness of your travel policy and communication efforts. High compliance rates often result in better cost control and increased savings.
Track booking lead time — This represents the time between booking and the actual travel date, as shorter lead times can result in higher travel costs. Encourage employees to book travel arrangements as early as possible to secure better rates and availability.
Measure employee satisfaction — Gather employee feedback regarding their travel experiences to assess their satisfaction with the travel program. Employee satisfaction is essential, as it can impact productivity and overall company performance.
Monitor environmental impact — Track the environmental impact of your business travel program, such as carbon emissions, to ensure alignment with your company's sustainability goals. Consider implementing carbon offset programs or promoting eco-friendly travel practices to reduce your program's environmental footprint.
Reviewing performance and adjusting strategy — Regularly review your program's performance based on the defined KPIs, and adjust your strategy as needed to optimise your travel program further. Continual improvement is critical to maximising the ROI of your business travel program.
Preparing for the future of business travel
By staying informed about emerging trends and developments in the business travel industry, travel managers can ensure that their programs remain optimised for the future.
Adapting to change and embracing new technologies and practices will help travel managers continue to maximise the ROI of their business travel programs.
The rise of remote work and virtual collaboration — With remote work and virtual collaboration now a standard operating procedure for many, businesses may opt for virtual meetings and conferences instead of in-person events. Travel managers should stay informed about the latest remote work trends and adapt their travel programs accordingly, ensuring their strategies remain relevant and cost-effective.
Increased focus on sustainability and responsible travel — Sustainability and responsible travel will continue to be a significant focus for businesses. Travel managers should stay current with new developments in eco-friendly travel practices and technologies, integrating these elements into their programs to reduce their company's environmental impact.
Personalisation and traveller-centric experiences — As employee well-being and satisfaction become increasingly important, businesses must provide personalised, traveller-centric experiences. Travel managers should explore leveraging data and technology to offer customised travel options catering to individual preferences and needs.
Technological advancements in travel management: Emerging technologies, such as artificial intelligence, machine learning, and advanced data analytics, will continue to shape the travel management landscape. Travel managers should stay up-to-date with the latest innovations and invest in tools that can streamline processes, enhance decision-making, and improve the overall travel experience.
Evolving travel policies and risk management: As the world grapples with global health concerns and geopolitical uncertainties, travel policies and risk management strategies must adapt. Travel managers should monitor international events and assess potential risks, updating travel policies and procedures to protect employees and maintain business continuity.
Get the most out of your business travel
Embracing innovation, placing importance on eco-friendly practices, and continuously monitoring and refining their tactics will empower travel managers to sustain a competitive advantage and guarantee the enduring success of their business travel programs amidst a constantly changing landscape.
At CMAC, we support businesses with a wide range of corporate travel services so that you can always get your people where they need to be.
Working with tried and tested suppliers, we ensure you're connected with the right transportation and accommodation solutions to suit your needs. If you'd like to learn more about our full range of services, contact our 24/7/365 customer service team for more information.