Business travel can be unpredictable. Just like the famous box of chocolates, you never quite know what you’re going to get – perhaps that dreaded middle seat or an unexpected flight delay. For businesses, corporate travel is a crucial investment, driving profitable deals, fostering lasting partnerships, and expanding networking horizons. However, it also represents a significant expenditure. Globally, companies spend over $1 trillion annually on business travel.
For travel managers, this vast expenditure translates into a complex balancing act. The challenge lies in optimizing cost-effectiveness, ensuring employee comfort, and maintaining strict policy compliance. This is precisely where well-designed Corporate Travel Programs and specialized software solutions become indispensable.
In this article, we will delve into the essential role of corporate travel programs in the modern business landscape. We will explore the steps involved in creating, structuring, and effectively implementing these programs. Furthermore, we will examine the software solutions that empower corporate travel programs and highlight the vital tools that can simplify a travel manager’s often demanding role.
Before we dive into program specifics, let’s first understand the intricate workings of the corporate travel world, its key players, and their interconnected relationships. If you are already familiar with this ecosystem, feel free to skip to the program definition.
Learn about corporate travel cards and how businesses leverage them for efficient travel and expense (T&E) management.
Decoding the Corporate Travel Ecosystem
To effectively manage corporate travel, understanding its components and key stakeholders is paramount. Let’s break down the corporate travel universe.
Key Players in Corporate Travel
If you are a travel manager tasked with arranging business trips for your organization’s personnel, you undoubtedly interact with at least one of the following categories.
Service Providers: These are the foundational elements of travel – airlines, hotels, and car rental companies. They are the direct suppliers of travel services, and you will engage with them directly or through intermediaries.
Travel Inventory Aggregators and Resellers: These crucial intermediaries bridge the gap between service providers and travel agencies, and even corporations directly. They consolidate travel products from numerous suppliers, providing access to a broad spectrum of travel inventory at potentially reduced rates.
Global Distribution Systems (GDSs) are the most prominent examples, acting as the largest inventory aggregators heavily involved in corporate travel bookings. Airline consolidators, bed banks, Online Travel Agencies (OTAs), and flight aggregators also participate, albeit to a lesser degree.
Tech Providers: This group develops essential software solutions such as Online Booking Tools (OBTs) and Travel and Expense (T&E) management systems. Their solutions offer automation, transparency, and self-service capabilities, significantly aiding travel managers in booking and, crucially, tracking expenses across all business trips. These technologies empower employees to book their own travel arrangements, utilize corporate credit cards (physical or virtual), and efficiently submit expense reports for reimbursements.
Leading names in this sector include SAP Concur, Navan, and Egencia.
Travel Management Companies (TMCs): TMCs specialize in managing business travel for corporate clients. They acquire travel inventory from aggregators, negotiate preferential rates with service suppliers, and offer supplementary services like travel insurance and on-trip support. They also provide technological platforms to manage all facets of travel, from initial booking to comprehensive reporting.
In essence, the corporate travel market revolves around companies needing efficient and safe travel for their employees, service providers delivering travel products, inventory aggregators, tech companies developing streamlining software, and TMCs offering specialized travel management expertise.
Corporate travel market players and relationships
While this structure may seem straightforward, the interactions between these entities are often complex. Let’s explore common interaction scenarios.
Navigating Interaction Scenarios
Companies handle business travel in various ways. Let’s examine the most prevalent scenarios:
Corporation – OTAs/Travel Suppliers: Smaller companies often directly utilize booking websites like Skyscanner, Kayak, or Expedia to arrange travel, encompassing flights, accommodation, and transfers. Alternatively, they might book directly with airlines, hotels, etc.
Frequently, employees manage their own travel arrangements and seek reimbursement post-trip.
Corporation – Tech Provider: As companies expand, manual travel management becomes overwhelming and inefficient. Many organizations adopt T&E management solutions to digitize these processes. As discussed, these systems facilitate diverse booking options, streamline expense reporting, enable transparent tracking, and generate insightful spending reports.
Corporation – TMC: Another approach for growing companies is to delegate travel management to a TMC. By partnering with a TMC, businesses share their travel policy and submit trip requests. The TMC then leverages GDS inventory or direct supplier contracts to make necessary arrangements.
Managing travel through a TMC
Corporation – TMC – Tech Solutions: Large, multinational corporations often have intricate travel policies and requirements. They frequently combine approaches, implementing sophisticated tech ecosystems alongside TMC partnerships. For instance, they might outsource booking arrangements while using a T&E management tool for enhanced spending visibility and advanced analytics.
Consider Amazon, FedEx, Walt Disney Co., and Lockheed Martin, as examples of companies with significant travel expenditure. In 2020, Amazon reportedly *saved $1 billion in business travel costs by reducing non-essential travel due to COVID-19 restrictions.
Amazon, previously working with CWT, transitioned to BCD Travel in 2023, while retaining CWT’s RoomIt for lodging. They also utilize Concur for T&E management.
Despite their resources, even giants like Amazon prefer outsourcing corporate travel management, highlighting the significant value proposition of TMCs.
The Strategic Role of TMCs
Beyond relieving internal staff from the complexities of constant travel changes and urgent requests, TMCs offer substantial benefits to large corporations.
Comprehensive Service Range:
- Handling complex itineraries due to extensive supplier networks and GDS connections.
- Turnkey travel arrangements, including visas, insurance, leisure activities, and premium services like helicopter transfers or pet care.
- Cost savings through negotiated airfares, hotel rates, perks, and extras.
- Personalized 24/7 on-trip assistance and disruption management, including re-bookings and alternative arrangements during unforeseen events.
- Travel policy development and enforcement.
- Expense tracking and analysis for enhanced spending visibility.
- MICE arrangements, venue bookings, event planning, and more.
TMC services and benefits
TMCs create centralized databases of client profiles, encompassing traveler details, policy rules, travel history, and loyalty program information to personalize and optimize the travel experience.
Technology Integration: TMCs often provide proprietary tech solutions or leverage off-the-shelf platforms to digitize travel management. They are also prepared to integrate with diverse software systems, including custom-built platforms.
Streamlined Payments: TMCs simplify payments by offering consolidated invoicing, allowing for monthly or quarterly payments instead of managing individual transaction for each booking.
TMCs, as corporate travel experts, strive to deliver maximum value through a wide array of services and tailored support.
For in-depth information, explore our detailed overview of corporate travel management companies.
Having clarified the corporate travel ecosystem, let’s now focus on the core topic: the corporate travel program.
Defining the Corporate Travel Program
A corporate travel program is essentially a company’s strategic framework for managing all aspects of business travel. It outlines the scope of travel support, partnerships with service providers, access to booking tools, and related processes.
Furthermore, corporate travel programs define the roles and responsibilities of travel managers, whether they are internal departments or external TMCs. However, if a company fully outsources its corporate travel management, a comprehensive in-house program might be less critical.
Corporate travel programs are designed to streamline business trip organization, ensure cost-efficiency, enforce policy compliance, and prioritize traveler comfort and safety. While related, a corporate travel program is broader than a travel policy.
Corporate Travel Program vs. Travel Policy
The corporate travel program is a more encompassing concept than a travel policy. A travel policy is a specific set of rules and guidelines that employees must adhere to while traveling for business. We will detail typical travel policy components shortly.
In essence, a travel policy sets the boundaries for business travel, whereas a travel program provides the overarching structure for managing and executing travel within those boundaries. The policy dictates the ‘what’ and ‘why’, while the program addresses the ‘how’ of travel management.
Building and Implementing a Robust Corporate Travel Program
The specifics of a corporate travel program will vary depending on company size, travel needs, and strategic objectives. You’ll need to customize your program, but here are fundamental building blocks to adapt:
Corporate travel program implementation stages
Conduct a Thorough Needs Assessment
Before initiating any program development, analyze your current situation. Evaluate your company’s travel needs, expenditures, and existing processes to pinpoint requirements and areas for improvement. Define distinct traveler profiles within your organization to cater to their specific needs:
- Frequent travelers vs. occasional travelers
- Domestic vs. international travelers
- Travelers from different global locations (if multinational)
- Travelers with varying age groups or accessibility requirements
Crucially, solicit feedback from your employees. Understanding the current state and traveler needs will establish a solid foundation for your program.
Define Roles and Responsibilities Clearly
Decide who will manage your travel processes – an internal team or an external TMC. Even with outsourcing, designate internal personnel to oversee these outsourced activities.
Start by identifying the C-level executive responsible for corporate travel, typically the CFO or Head of HR. Executive sponsorship is vital for program success. Secure buy-in from regional and branch leaders as well.
Key stakeholders in travel-related workflows include:
Travel Manager(s): Whether a single person or a department, designate individuals to manage all corporate travel activities. They administer the program, manage partners, and serve as the primary contact.
Accounting/Finance Team: They are involved in budgeting, expense tracking, reimbursement, and overall cost management.
IT Staff: If implementing travel software, IT manages and maintains it.
HR Department: HR assists with policy development and employee communication.
Risk/Security Department: If dedicated, this team develops risk management protocols. Otherwise, HR can handle this.
These teams form a stakeholder network. Collaborate closely with them during program development and implementation, gathering input to enhance the program.
Determine Your Travel Management Model
Outline your company’s overall travel management approach. Decide how travel will be booked and paid for. Consider these models based on control and flexibility:
The Mandated Model is highly restrictive, with rigid policy rules, reporting procedures, payment methods, and limited booking channels and suppliers. It often involves TMC partnerships for centralized control.
This model simplifies management and expense tracking but can restrict employee choice and loyalty program usage.
The Flexible (Open Booking) Model offers maximum freedom, allowing employees and travel managers to choose suppliers and payment methods within budget limits. Netflix’s “Act in Netflix’s best interests” policy exemplifies this.
This model is traveler-friendly but complicates data gathering, expense tracking, and reduces potential savings from preferred supplier relationships.
Hybrid Models combine elements of both, offering varying degrees of flexibility and control.
Your chosen model dictates data collection, reporting, and compliance procedures. Conduct internal meetings and market research to benchmark against similar companies when defining your model.
Once your vision is clear, formalize it in a travel policy.
Develop a Comprehensive Travel Policy
A travel policy standardizes travel procedures, manages expenses, and clarifies reimbursable costs. It’s the bedrock of your corporate travel program.
A detailed travel policy should include:
- Pre-trip approval processes
- Budget limits and per diem guidelines
- Preferred providers and class of service
- Reimbursable and non-reimbursable expenses
- Post-trip reporting and reimbursement procedures
- Duty of care, emergency protocols, and travel support
- Loyalty program usage
- Leisure extensions (bleisure)
- Corporate credit card usage
Numerous online templates, like those from Workable or PandaDoc, and more detailed examples from SHRM or TravelPerk can assist in creating your policy. Ensure the finalized policy is easily accessible to all employees.
Strategically Partner with a TMC
If outsourcing travel management, selecting the right TMC is critical. Consider these factors:
Service Breadth: Beyond bookings, what services do they offer? Disruption management specifics, insurance, visa support, discounts, multilingual 24/7 assistance are crucial considerations.
Partner Network: Does their supplier network align with your policy and needs? Do they include low-cost airlines or business hotels in key locations?
Expense Management Capabilities: Evaluate their T&E processes to ensure transparency and alignment with your cost optimization strategy.
Software Integration: What tech platform do they offer? Does it integrate with your systems? What is the implementation timeline and training process? Can they integrate with your existing software if you prefer?
Pricing Structure: Subscription or per-trip fees? Clarify any hidden charges for support or international calls.
For smaller companies, consider business accounts with OTAs like Booking.com for Business, which offer online platforms, corporate discounts, and support, potentially sufficient for simpler needs.
Large corporations might benefit from multi-TMC strategies, diversifying by location or service type (e.g., separate agencies for air travel and lodging), balancing cost optimization with coordination complexity.
Cultivate Direct Supplier Partnerships
Negotiating directly with frequently used travel providers can yield corporate rates and discounts. This is optional, especially with a TMC managing supplier relations.
Consider direct partnerships if you consistently use specific providers, like hotels in key business locations, to secure better rates for frequent business travelers.
Implement Corporate Travel Software
Select and implement software solutions to support your travel program, enhancing efficiency and expense reporting. Online Booking Tools (OBTs) and Travel and Expense (T&E) management systems are key categories, which we’ll explore in detail later.
Establish Data Management and Analytics
Robust data management is crucial for informed decision-making.
Identify data sources: internal systems, supplier data, TMC data, market data. Implement systems to track spending and analyze travel patterns, addressing any data gaps.
Consider a business intelligence platform to analyze and visualize data, scrutinizing costs, supplier performance, and disruptions.
Use insights to optimize the program, reduce costs, negotiate better vendor deals, refine traveler profiles, and improve risk management.
Develop a Comprehensive Risk Management Strategy
Beyond duty of care in your policy, develop a broad risk management strategy.
This includes proactive and reactive measures to mitigate threats, from disruption alerts to local safety information and emergency support.
Implement risk management software to access real-time traveler location and disruption data.
Location tracking for travel risk management
Efficient disruption management is vital. Explore AltexSoft’s case study on developing a disruption management system for Cornerstone Information Systems.
Integrate Sustainability Initiatives
Incorporate sustainable travel practices, prioritizing eco-friendly accommodations and carbon-neutral transport to align with corporate social responsibility goals.
Educate and Train Your Staff
Communicate the policy and program across all departments and locations. Train employees on new policies, tools, and booking/expense reporting procedures. Transparent communication is key for compliance and feedback.
Regularly Review and Optimize
A corporate travel program is dynamic. Establish feedback mechanisms and regularly assess program performance, policy compliance, traveler satisfaction, and cost savings. Use data to refine and improve the program, ensuring it contributes to employee well-being, productivity, and company objectives like cost optimization, digitization, and emission reduction.
Developing and implementing a corporate travel program is a significant undertaking, but hopefully, this breakdown makes the process less daunting. Now, let’s explore the technology that underpins effective corporate travel programs.
Corporate Travel Management Software: Tools for Efficiency
Whether you partner with a TMC or manage travel internally, specialized software is invaluable for streamlining operations and data exchange. Technology addresses key challenges like cost control, policy adherence, traveler support, and data analysis, in addition to simplifying booking processes.
Two primary software categories are online booking tools and expense management software, though the lines are increasingly blurring towards integrated platforms.
While some tools remain niche, many vendors offer comprehensive solutions encompassing booking and expense management. Leading providers offer multi-featured platforms, as shown in the comparison table below.
To stay competitive, vendors are integrating ML/AI for personalized recommendations, fraud detection, and enhanced analytics.
Corporate travel management tools comparison
Explore B2B corporate travel platforms in our dedicated article.
Online Booking Tools (OBTs) Explained
A corporate booking tool, or Online Booking Tool (OBT), is software used by companies to manage business travel arrangements. OBTs streamline booking flights, hotels, car rentals, and other travel services for employees.
OBTs differ from B2C booking engines by incorporating company travel policies and traveler profiles. They enforce policy compliance by dictating bookable products, sources, and prices.
OBT profile management in corporate travel
Key features of modern OBTs include:
- Travel booking
- Itinerary management
- Compliance monitoring
- Expense tracking
- Risk management
- Reporting
OBTs can be implemented and used in two main scenarios:
Company-Side Implementation: Companies can implement OBTs to manage travel internally. Highly customizable, these systems align with specific policies and integrate with ERP, HR/CRM, and financial systems. Access levels can be configured for travel managers, employees (self-service booking), or TMC partners.
TMC-Provided OBTs: When outsourcing to a TMC, companies may utilize the TMC’s proprietary OBT. TMCs create company-specific accounts within their OBTs, incorporating policies and profiles. Access levels determine the company’s ability to manage travel, profiles, and reporting within the TMC platform.
Travel and Expense (T&E) Management Software
T&E management software primarily focuses on expense monitoring and reporting. It enables:
- Efficient expense submission
- Virtual credit card issuance for spending control
- Travel expense report generation
- Business travel spending analysis
T&E management workflow
Modular T&E tools allow customization, adding booking, policy compliance, and invoice automation functionalities. Like OBTs, T&E systems can be company-managed or provided by TMC partners.
Selecting the Right Corporate Travel Software
To choose the optimal software, assess your needs:
- Company size, travel frequency, and traveler volume
- Current travel management processes and software
- Processes needing automation
- Integration requirements with existing systems
When comparing options, consider:
- Functionality and pricing (demos/free trials)
- Customization capabilities
- Integration options and support
- Data security and ownership
- User reviews and feedback
- Customer and tech support
If off-the-shelf solutions are insufficient, custom software development might be considered. While a larger investment, custom platforms can perfectly match workflows and business needs, enhancing corporate travel management significantly.
In conclusion, mastering your corporate travel program is crucial for optimizing costs, ensuring traveler satisfaction, and driving business success. By strategically planning, implementing appropriate technology, and continuously refining your approach, you can transform business travel from a potential challenge into a strategic asset.
