The costs of corporate travel are rising. Air fares are increasing, due to fuel price volatility and capacity constraints, the rate of hotels is also on the rise, due in part to inflation, and transport and grounds costs are skyrocketing.
However, despite this hurdle, corporations recognise the huge value that business travel can bring to their organisation. Rather than reducing trips, which serve things like market expansion, driving sales and the strengthening of business relationships, they are instead looking at how to mitigate costs.
So, in 2024, senior managers and corporate executives are under pressure to ensure they reap the full benefits of what is sowed in their travel budgets. With budgets increasingly scrutinised, the importance of demonstrating a tangible return on investment (ROI) for business travel is sharply rising on the agenda. Here are 5 easy to optimise the ROI of every business trip.
1. Assess the value of each business trip
Develop a framework you can use to evaluate the merits of a business trip before booking. It should include the costs, potential benefits and drawbacks, the strategic goals of your organisation and any alternative approaches to achieving those goals.
For costs, include travel, accommodation, subsistence and employee time. Benefits might include closing sales, strengthening client relationships, increasing brand awareness, understanding new markets and improving employee collaboration. Drawbacks might be risks associated with the time an employee spends away from their day-to-day responsibilities. For alternative approaches, consider if tools such as video conferencing or a webinar could achieve the same outcome.
The more you use this framework, the easier it will be to understand whether a trip is likely to bring you the ROI you expect against the costs incurred.
2. Leverage travel data and analytics for better insights
Tightening budgets means finance leaders are under more pressure for transparency. Travel managers need the most up-to-date analytics and data to support them in fulfilling their day-to-day responsibilities and, in particular, when it comes to demonstrating ROI to senior leadership and setting budgets.
Analysing historical travel data, including flights, hotels, car rentals and destinations, can uncover patterns, trends and spending behaviours that a business can use to optimise budgets, reduce waste and identify cost-savings. For instance, you might discover that employees frequently use a particular airline or hotel, which could be an opportunity to negotiate a corporate discount.
Certain organisations may be at risk if they have not consolidated travel data from multiple sources, which can make it challenging to manage and analyse. Clear visibility over expenditure is essential for controlling costs and demonstrating travel ROI.
If you’re looking to centralise reconciliation of your business travel expenses, look no further than an American Express® Business Travel Account. Users benefit from comprehensive data analytics reports that automate the generation of travel insights and cost-saving opportunities.
3. Optimise travel policies with advanced tools
A well-defined travel policy helps employees understand what travel is considered essential, how much can be spent, what costs will be reimbursed and what processes to follow when booking trips and recording expenses. This makes it a valuable tool for monitoring and controlling costs.
To optimise travel policies, leveraging advanced tools can be highly beneficial. Effective platforms may provide real-time policy compliance checks, automated altars for non-compliant bookings, and overall integration with corporate guidelines.
4. Enhance negotiation leverage with travel suppliers
Many decision-makers look to data analytics as a powerful tool for negotiating better. Insights into travel patterns and spending enable organisations to discover opportunities to source new suppliers and negotiate better rates.
If you regularly spend with a certain hotel chain, for example, you could look to negotiate a discounted or custom corporate rate. It may also be possible to arrange more customisable travel packages with certain suppliers based on longer-term corporate spend.
5. Automate travel expense reporting and reconciliation
Even against the backdrop of digital transformation, many organisations still rely on spreadsheets to manage records and report expenses. These manual methods of reporting can lead to mistakes.
Automating expense reporting and reconciliation saves time, money and the likelihood of errors. Moreover, this can boost both productivity and employee satisfaction by reducing the administrative burden on travelling staff.
The American Express Business Travel Account can centralise these costs and travel expenses in one place, giving you visibility over employee spending that you can use to optimise budgets.
Balancing costs with employee satisfaction
Business travel costs are rising, but this isn’t deterring companies from booking trips. Instead, finance teams are focussed on how to make their travel budgets stretch further.
Achieving this in part relies on embracing technology and automation, to streamline processes, reduce mistakes and gain more transparency over travel data. It also requires finance leaders to take a more considered approach to business travel, ensuring that every trip is necessary and aligned to strategic goals.
At the same time, finance teams will need to strike a careful balance between mitigating costs while keeping travelling staff happy. As part of this, consider exploring our range of American Express Corporate Travel Solutions which provide a number of tailored organisational benefits, from secure virtual payment supplier facilities to simple reconciliation processes and much more to longer payment terms of up to 54 days when it comes to our Corporate Charge Cards¹.
Moreover, our Business Travel Account makes reporting easier and enables money saving opportunities. With no annual fee or hidden costs, it can save time by streamlining the reconciliation process and administrative tasks. All while ensuring your employees have access to a wide range of travel benefits.
1. The maximum payment period on purchases is 54 calendar days and is obtained only if you spend on the first day of the new statement period and repay the balance in full on the due date.