Corporate travel professionals are becoming increasingly visible in organisations as go-to people for the development of internal travel policies.
In the past, corporate travel guidance was often set by the board, by the CFO or even by the chief executive. Increasingly, guidance is being implemented, developed and reviewed by company travel managers.
Sixty per cent of Asia Pacific travel professionals surveyed by the Global Business Travel Association (GBTA) for its 2012 Travel Policy Trends: 'Control' – What Does it Mean and Who Has It report said they have been granted greater control over travel policy over the last few years.
"Our study shows that in Asia Pacific, social media and technology, such as mobile devices, is reshaping both the traveller experience and travel manager's role in simultaneously supporting traveller needs and corporate objectives," said Cecilia Routledge, managing director of Egencia APAC, which collaborated on the research.
The growing prominence of the travel professional role is also a reflection of how technological developments are altering business trip administration. Travel professionals need to weigh-up pressures to keep costs down, with requirements for reporting and spend visibility to ensure financial control.
Different Businesses, Different Travel Needs
To go or not go online? Travel and entertainment spend makes up a significant proportion of company budgets and despite a renewed focus on cost-cutting, corporate travel is as valued by businesses as it ever has been. A survey by Business Traveller Magazine found one-third of road warriors intend to travel more in 2013 than in 2012, with 50% saying they would be travelling more compared to two years ago.
Concur's 2012 T&E Spend Trend report shows Australia saw a 15.3% increase in overall travel and entertainment spend in 2010 and 2011, with spend on airfare increasing by more than 12% over the same period.
This isn't just limited to Australia. The Concur study also shows that average spend for most T&E is up globally, with airfare and lodging leading the way.
Rising T&E costs shifts focus to cutting costs. But what strategies are companies harnessing to achieve this goal? For many, the choice is split between opting for in-house travel management or completely outsourcing corporate travel programmes to limit costs. Both routes have their advantages. Companies booking their own travel online can enjoy lower costs, but using the services of a third party also offers mass management of corporate travel - useful for larger companies.
Travel managers at companies large and small will have different spend management priorities, depending on factors like total number of employees and average monthly number of travel booking transactions per month, all of which have implications on how they choose to book and pay for company travel. While companies with infrequent corporate travel should think about managing operations in-house, larger firms conducting lots of trips should consider outsourcing to a travel management company (TMC).
Outsourcing the Travel Management Function
Outsourcing the travel management function to a third party has become a clear trend over the last few years, driven by the growth of the procurement function within companies.
For larger businesses, using a TMC is effective, especially if they have frequent travellers and travel makes up a significant part of their operations. According to ITM, 48% of all corporate accommodation bookings made by FTSE top 100 companies are made by TMCs.
TMCs assist with common implementation of corporate travel policies and data retrieval. However, one size does not fit all and larger firms should not think outsourcing to a TMC will solve all its problems.
Shifting travel infrastructure to a third party, for example, throws up one challenge: proper visibility over spend. The Aberdeen Group's 2012 T&E Expense Management report found 55% of organisations identified better visibility into overall travel spend as a key priority last year.
One solution is to harness a Business Travel Account (BTA) to pay for travel, aligning it with data from the TMC. A BTA combines corporate travel spend into one single consolidated account, offering full visibility over expenses and the opportunity to improve efficiency.
Direct Travel Management – Keeping It In-House
Typically, small firms undertake less business travel than their larger peers. In these cases, outsourcing to a TMC may not be necessary and it could be more cost-effective for a company to bring travel booking in-house. Automation brings lower costs for travel booking and expense report processing. Procuring travel online costs significantly less and has lower transaction costs than using a traditional travel agency for air, hotel, and car reservations. 21% of respondents to Ascend Advisory's Corporate Travel Survey 2012 said they thought using the internet to find cheaper fares was 'essential'.
Having a travel manager who is a direct company employee ensures they will adhere to corporate goals – which may not be priorities for a TMC. 71% of travel buyers from large, medium and small-sized companies believe travel spend will be higher at their companies in 2017 versus today, according to the Association of Corporate Travel Executives’ 2012 Travel Management of Tomorrow report. As such, ensuring corporate travel is consolidated internally could be key in achieving business goals.
In-house travel management, however, can still be fraught with risk. Internal expense management systems often rely on paper-based processes, meaning report filing and a lengthy reimbursement process. In this circumstance, switching to automated tools and using a Corporate Card to control costs is key.
In-house expense management can also be consolidated by a Corporate Card to bring additional reporting capabilities and enhance visibility into spend.
According to the Aberdeen Group's 2012 T&E Expense Management: The Best-in-Class Pillars of Next-Generation Expense Management report, 78% of leading companies have Corporate Card and Expense Management integration in place.
Harnessing Expert Insight
Companies looking to review their travel management infrastructure can also utilize expert insight from advisory teams and consultancies.
Often, this leads to a multi-platform approach that allows some expense processes to be kept in-house, while others are outsourced. In Asia Pacific, companies much prefer booking online (82%) to offline channels, according to the Accor Asia-Pacific Business Traveller Survey 2012. The majority of executives in the region (57%) book directly via a hotel's website, with a quarter booking through online travel agencies, the research found.
It is crucial that travel managers weigh up the specific needs of the business when choosing how to administer company travel. Considerations include volume of travel, budget levels and internal corporate goals.
However, one size does not fit all. It is crucial companies take the time to review their specific needs. Outsourcing offers a number of advantages and can be useful for enterprises with large volumes of travel, but firms must remember using a third party does not bring the level of personalization that using an in-house service does.
Whatever a company chooses, a Corporate Card or Business Travel Account can also be closely aligned with a travel expense management programme, helping a business make smarter decisions.