2022 and the Evolution of Corporate Travel Policy
About once a year we publish a blog that discusses how changes to the industry or our work environment will impact corporate travel policy. As a result, we typically engage in yearly re-writes of policy to ensure the right balance of traveler satisfaction and cost savings in light of new technologies in the marketplace, talent acquisition and retention strategy, and supplier leverage opportunities.
By the end of 2020, the impact of COVID-19 put a hyper-focus on traveler risk management. The ability to track and help travelers in the event of an emergency has always been part of typical travel policies but since the pandemic a program cannot be defined as well managed without this box thoroughly checked. Sustainability efforts within organizations have also come to the forefront over the past year and while arguably not driven by the pandemic, this has certainly become a higher priority among business travelers as they consider getting back on the road. We have seen huge announcements from travel vendors investing in sustainable fuel, electric vehicles, enhanced reporting capabilities – both travel managers and travelers are attempting to navigate these new developments as they re-train themselves on getting back on the road.
While travel policies have emphasized both risk management and sustainability as key program drivers over the past two years, we have found a few less obvious trends amongst our clients that may be thought provoking as your program considers policy changes going into 2022.
As it relates to the pandemic and risk mitigation, our focus should not be too narrow. The normal course of business and the travel risks associated are far wider and more encompassing than COVID-19. Political instability across the globe and natural disasters are just two examples of real and present threats travelers face that may be easy to ignore as the latest COVID variant dissipates. Policy should be reflective of an organization’s legal and fiduciary responsibility it has to its travelers no matter the risk type. We are seeing clients consider how to better embed general duty of care language into their corporate travel policies than in the past – and incorporate general safety tips and training into an annual refresh process.
How Technology Can Help
In only the past few years, technology and agency operations have enabled corporate travel programs to action sustainability related information. Historically, our consulting engagements would bring in stakeholders from an organization’s sustainability council and as a result we would come away with rear-view looking data that was vaguely measurable and only actionable if the organization participated in an offset program of some kind. Today, travelers and travel managers can make better informed decisions about their preferred supplier mix during negotiations or at the point of sale based on measurable and actionable sustainability data. Perhaps more importantly the majority of the traveling population today identifies sustainability initiatives as part of what attracts them (or not) to work for a particular company. The notion of balancing traveler satisfaction with cost savings is not new but the goal posts have moved over the past few years.
These fundamental priorities – risk and sustainability – are modern day examples of how corporate travel is so personal. The balancing act between traveler satisfaction, program optimization, and return on investment is not only helping drive policy decisions but also can have a direct impact on all corporate activities. In this way, the trend that we see emerging is a blurring of the lines between stand-alone corporate travel policy and more general corporate policy. While travel policy is still separate from more general policies around corporate governance, we are starting to see how one has a direct impact on the other as companies take a harder look at the impact of a new normal hybrid work environment. Factors such as unused real estate, organizational sales goals, use of mobile technology such as videoconferencing, and squaring cost to value have implications that impact how or if an organization negotiates that airline deal or utilizes a hotel’s meeting space. In addition, suppliers including Travel Management Companies (TMC’s) are strapped for resources so the burden of managing policy and strategy is shifting in a traditionally managed environment from the TMC to the company itself more than ever.
The optimistic reader may argue that the above narrative creates an opportunity for companies to gain better control over their travel programs by being closer to the traveler and more directly tied to management decisions that impact the whole of the organization. I would agree. The result is a growing trend of greater influence among corporate travel category managers within organizations. As a result, corporate travel has to think about its policies through the lens of not only program optimization but also corporate return on investment (ROI). The more intrinsically tied the corporate travel program is to general business activities, the more visible travel activities become within senior management.
It’s Time to Review Your Corporate Travel Policy
Five years ago, we used to benchmark best practices for items such as Business Class vs. Economy or basics around per diems. Travel policy would be tweaked here and there based on cost/benefit and the prevailing corporate sentiment. But today, the discussion has become much more complex and the stakes have been raised. Corporate travel policy is becoming a reflection on the way a company does business. As travel starts to come back, now is the time to take a hard look at the impact corporate travel has on the business and if policy reflects the “new normal”.