A complete guide to corporate travel management
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A complete guide to corporate travel management
Businesswoman in airport using a laptop while waiting for flight.
Employee travel is often a necessity. Whether it’s attending conferences, meeting with clients, or visiting remote offices, corporate travel is an integral part of operations for businesses of all sizes.
However, managing the logistics of booking flights, hotels, and ground transportation all while keeping costs in check can be daunting. This is where corporate travel management comes in, providing a structured way to simplify business travel from start to finish.
In this guide, Ramp dives deep into the world of corporate travel management, exploring what it entails, key strategies to streamline the process, and how to maximize cost savings while ensuring employee safety and satisfaction.
What Is Corporate Travel Management?
Corporate travel management, or CTM, is the process of coordinating and optimizing all aspects of business travel. It’s a comprehensive approach that includes setting travel and expense policies, booking business trips, managing expenses, and ensuring employee safety while on the road.
Corporate travel management includes activities such as:
- Developing travel policies and guidelines for employees.
- Booking flights, hotels, rental cars, and other transportation.
- Arranging full travel itineraries.
- Negotiating discounted rates with vendors like airlines and hotels.
- Managing business travel expenses, reimbursements, and reporting.
- Ensuring traveler safety through risk management practices.
- Analyzing travel data to identify cost-saving opportunities.
Ultimately, the main purpose of CTM is to make business travel as smooth as possible for employees, while also keeping costs under control and ensuring travel supports business goals.
The Importance of Corporate Travel Management
Effectively managing corporate travel is important for several reasons:
1. Cost control
Business travel is a major expense category for many companies. Having a structured corporate travel program helps keep costs under control in several ways. First, it allows your company to leverage its purchasing power to negotiate discounted rates with airlines, hotels, and other vendors. It also provides a way to set and enforce travel policies that prevent overspending and budget overruns.
2. Employee productivity
A well-run corporate travel program makes the travel experience smoother for employees, allowing them to focus on their trip’s business objectives. With pre-arranged travel, they can skip the nightmare of last-minute bookings. Automated processes reduce administrative overhead, and having support available lets them hit the ground running once they arrive.
3. Duty of care
When employees travel for business, their safety and well-being is the company’s responsibility. This “duty of care” obligation is a major part of corporate travel management. It involves having rigorous risk assessment protocols, providing travel advisories and alerts, facilitating emergency assistance if needed, and prioritizing traveler security overall.
4. Compliance with travel policies
Most companies have internal policies that govern booking procedures, preferred suppliers, expense limits, and more for business travel. An effective travel management program is key for clearly documenting those policies and ensuring employees follow them. This helps maintain compliance with both internal guidelines and relevant external regulations.
5. Data and reporting
By centralizing all travel data—bookings, expenses, supplier usage, and more—corporate travel management programs can provide valuable reporting and analytics capabilities. Having insights into travel patterns, spending trends, areas of overspending, and more allows companies to optimize their travel programs over time.
Who Manages Business Travel?
Corporate travel is typically managed by the procurement, finance, or operations department within an organization. The scope and structure of corporate travel management can vary based on the company’s size and the volume of business travel required.
Large enterprises with substantial travel needs may have a business travel management team. This team is typically led by a corporate travel manager who coordinates across finance, HR, and other departments to implement travel policies, negotiate with suppliers, procure travel management software, and ensure compliance with travel regulations and duty of care obligations.
In smaller organizations, travel management responsibilities may be shared between multiple roles within the finance or operations teams, or fall under the purview of a single employee.
What is a travel management company?
A travel management company, or TMC, is a travel agency that handles travel planning and booking for other businesses. Instead of using internal resources to coordinate flights, hotels, rental cars, and everything else that goes into business travel, companies can hire a TMC to handle it for them.
These organizations have specialized travel booking systems, access to better rates thanks to strong relationships with travel providers, and extensive industry knowledge. They use this expertise to find travel options that fit each client’s budget, policies, and preferences.
TMCs offer round-the-clock support for travelers who encounter issues during their journey. They also provide analytics on travel expenses, allowing companies to track expenditures and identify areas for improvement in their travel program.
What does a corporate travel planner do?
While the travel experts at TMCs can be valuable partners, many organizations also have dedicated internal resources to manage their travel programs. This is where the role of a corporate travel planner comes in.
A corporate travel planner oversees all aspects of their company’s business travel planning. Their main job is ensuring employees can easily book business trips, while also managing costs and enforcing the company’s travel rules. This means they often wear many hats—from negotiating deals with airlines and hotels to helping employees book complicated itineraries.
One of the most challenging parts of the job is creating and enforcing the company’s travel policy. Travel planners have to balance convenience and ease of booking with the company’s travel budgets and expense management needs. They also have to stay current with the latest travel technology and other tools to improve efficiency.
Components of a Corporate Travel Management Program
When employees have to travel for work, a well-structured corporate travel management program is essential. By combining clear policies, helpful technology, and ongoing support, companies can ensure business travel is as smooth as possible for everyone involved. Ramp breaks down the key pieces of an effective business travel program:
Travel policies
A well-defined corporate travel policy provides guidelines for booking trips, submitting expenses, getting approvals, and other travel-related procedures. It’s the foundation that ensures everyone is on the same page and playing by the same rules. When policies are clear and cover all the bases, it’s easier for the company to keep costs under control.
Online booking tools
These websites and mobile apps let employees book their own flights, hotels, rental cars, and other travel needs while still following the company’s travel policies. These self-service tools streamline the booking process while enforcing policy guardrails.
Expense management software
With expense management software, employees can keep track of expenses, like meals, taxis, and other costs while traveling. These tools integrate with corporate credit cards and accounting systems, making it easy for employees to report expenses, get reimbursed, and keep everything organized. Automating expense reporting and approval saves time and reduces errors.
Policy enforcement
This is about having automatic checks in place to ensure employees follow all the company’s rules when booking trips and submitting expenses. If anything looks suspicious or violates the policy, it gets flagged for a closer look. This helps keep spending under control and ensures the policy is enforced fairly across the company.
Vendor management
This involves negotiating deals with—and evaluating the performance of—airlines, hotels, rental car companies, and other travel suppliers. Effective supplier management leads to better rates and terms, and regular review helps optimize preferred vendor lists.
Challenges of Corporate Travel Management
Managing corporate travel isn’t all smooth sailing. Companies often face significant challenges when trying to run an effective travel program, which can include:
Cost control and policy compliance
One of the biggest challenges is simply managing travel spend. With the cost of flights, hotels, and other travel expenses constantly fluctuating, it can be tough to stick to a budget. Setting clear policies that outline spending limits can help, but getting employees to follow those policies is another challenge entirely. It often requires a lot of communication, education, and sometimes even enforcement to ensure everyone is on the same page about travel spending.
Difficulty tracking approvals
Another common challenge is managing expense approvals. Many companies have a lengthy approval process that involves multiple people signing off on travel plans before employees can book their trips. This can lead to delays and frustration for travelers, and it can be a real headache for travel managers to keep everything moving. Streamlining the approval process can make a big difference in the program’s overall efficiency.
Managing expense fraud
Unfortunately, expense fraud is a real problem in many companies, and it can be especially tricky to catch when it comes to travel expenses. Employees might exaggerate expenses, claim reimbursement for costs that aren’t within company policy, or even submit fabricated receipts. This kind of misreporting can add up to significant losses over time. Robust expense management software can flag suspicious activity and help prevent fraud before it happens.
Integration issues
Another big hurdle in corporate travel management is organizing all the data flowing in from different parts of the travel process: online booking tools, expense reporting software, invoices from travel suppliers, corporate credit card systems, and more. Getting all that data in one place so you can use it to improve your program can be a real headache without the right tools.
Logistical inefficiency
Even the basic logistics of corporate travel can be hard to manage, especially when you’re dealing with many employees traveling at once. Getting everyone to use the company’s booking tools correctly, making sure traveler profiles are up to date, and keeping your various processes running smoothly can be a full-time job in itself. These kinds of inefficiencies can be frustrating for managers and travelers alike, and finding ways to simplify things is an ongoing battle.
5 Tips to Manage Business Travel Effectively
1. Create a clear and easy-to-follow travel policy
Have a travel policy that lays out your guidelines in a way that’s easy to understand. This policy should cover how to book trips, what kinds of expenses are allowed, and how to report them. Make sure the policy is easy to find and access, and review it regularly to keep it up to date with any changes in the company or the travel industry.
2. Improve efficiency with technology
Investing in the right travel management solution can make a big difference in streamlining processes and saving time. Online booking platforms and expense management software can automate many tasks and make it easier for employees to handle their own travel arrangements.
3. Build strong relationships with travel vendors
Building strong partnerships with suppliers like airlines, hotels, and rental car companies can yield better rates and customer service. Negotiate favorable contracts and establish preferred vendor programs to get the most value. Regularly evaluate supplier performance and be open to making changes to ensure you’re getting the best deals and meeting your business needs.
4. Emphasize communication and education
Effective communication is key to ensuring everyone understands and follows the company’s travel policies. Provide regular training and updates, and encourage open feedback to hear travelers’ concerns and suggestions. The more engaged and informed employees are, the smoother the travel process will be.
5. Use data for continuous improvement
Business travel generates a wealth of data you can use to identify areas for improvement. Regularly analyze spending patterns, policy compliance, and traveler feedback to spot trends and issues. Use this data to make informed decisions about policy changes, supplier negotiations, and program enhancements.
This story was produced by Ramp and reviewed and distributed by Stacker Media.
