We have clients of all shapes and sizes at AirPlus International – but many of the problems they face are very similar. These are the five challenges we hear most often across our customer base – and some best practice tips we’ve picked up on how to solve them.
1. Balance spend control with traveller wellbeing
The challenge: Pretty much all travel programmes aim to maximise protection and productivity for travellers while minimising how much it costs. Yet meeting one of these twin priorities without harming the other is tough. You could save a fortune by making employees travel on buses and stay in backpacker dormitories but that’s not going to fulfil your duty of care obligations or make their missions successful. On the other hand, businesses can’t afford to fly everyone in first class and accommodate them in five-star hotels. How do you find the right balance?
- Get more travellers to use your preferred suppliers: The more you can drive bookings towards a select group of preferred suppliers, the better the rates you can negotiate with them. That could enable the business, for example, to afford four-star hotels when normally travellers would have to stay in three-star properties. It’s a win-win for corporate savings and traveller comfort.
- Cut out unnecessary travel: All businesses need their people to travel, but could the volume of trips be reduced? Could that quarterly team meeting take place just twice a year, halving the amount spent while reducing wear and tear on employees?
- Re-think business class policy: Flying business class also reduces wear and tear – but it is very expensive. Rules about who is allowed to fly up front are usually based on seniority or length of flight but there are other options. For example, some companies allow business class only for employees flying long-haul a minimum number of times per year. Or you could move travellers to premium economy (which still offers more legroom than economy) for daytime flights. Use detailed analysis of cabin class data from bookings paid through the AirPlus Company Account to guide your decision-making.
2. Improve hotel compliance
The challenge: Accommodation is the biggest slice of business travel spend for many companies (27% versus 21% for air, according to German travel buyers’ association VDR), yet compliance levels are very poor. When we surveyed 1,285 business travellers recently, 41% said they book their hotel privately instead of through an authorised company channel.
- Pay centrally: Today, most hotel bookings on business trips are paid by the business traveller on departure using a personal credit card or corporate card. In either case, the traveller has to submit an expense claim afterwards. But if the company pays centrally instead through a lodge or virtual card, the traveller can stop worrying having to foot the bill. Making travellers’ lives eaiser in this way explains why global hotel solutions company HRS found compliance rates rocket after companies introduce central payments, leading to average hotel rate reductions of 12%.
- Review your self-booking options: Research also shows many travellers defect to consumer hotel booking sites because they don’t find the corporate booking tools they’re given user-friendly. Take another look at what you’re offering your travellers and the increasing range of corporate booking processes on the market. Could you do better?
- Communicate your policy: Sometimes travellers don’t follow the rules simply because they don’t know what they are. Create a simple marketing campaign to explain what your hotel policy is, and how it benefits not only the company but the travellers themeselves.
3. Managing travel for non-employees
The challenge: Whether it’s contractors, interns, customers or many others, handling travel by non-employees is fiddly and time-consuming. One of the biggest problems is how to pay (you can’t give them corporate cards and they may be unable or unwilling to use personal cards), plus issues like reimbursement and cost allocation.
- Use virtual cards: Centrally billed virtual cards enable payment for travel by employees and non-employees alike. No reimbursement process is required and cost centres can be allocated to each payment to provide comprehensive data.
- Be aware of duty of care risks: Duty of care responsibilities towards non-employee travellers are often just the same as for employees. Check you are doing what’s necessary: can you track them in an emergency? Do they have adequate insurance cover?
- Watch out for contractor tax risks: UK tax authorities are clamping down on contractors who could be considered hidden employees subject to PAYE taxation and National Insurance contributions. One test inspectors look at is whether contractors’ travel is handled in a similar way to regular employees. Talk to your HR, financial and legal departments to learn more.
4. Get a grip on “bleisure” travel
The challenge: "Bleisure" travel, where employees add leisure time off work to their business trip, is a growing trend, especially among millennial employees. Some travel managers tell us they now receive more enquiries about this issue than any other. Allowing bleisure travel keeps your workforce happy, but it does create challenges around duty of care, data distortion and potential additional costs.
- Create policy rules: Examples could include requiring employees to obtain their own travel insurance and clarifying whether you allow spouse travel.
- Check your supplier contracts: Understand whether the preferred fares and rates you have negotiated can be used for private purposes.
- Allow bleisure bookings through your travel management company: Having employees book all elements of their trip through your TMC may incur additional transaction fees but it’s usually worth taking the hit to keep track of where your travellers are.
5. Find the right balance between global and local
The challenge: One challenge that never goes away for anyone managing a multinational travel programme is deciding when to insist countries follow global rules and when to allow local exceptions.
- Find common ground: Design a global travel policy that, as far as possible, only includes rules which employees could reasonably follow wherever they are based.
- Allow tougher, but not easier: Tell local businesses they can make their version of the global policy stricter, but they can’t make it more relaxed.
- Don’t sweat the small stuff: If the five people in your Azerbaijan office insist on using a hotel outside your preferred programme, let them. It’s not going to make or break your supplier deal.
Looking across the list of challenges above, the common theme which really stands out is that travel management is as much about HR as it is about procurement and that the management of travellers is as important, if not more so, than the management of suppliers. That’s always been true but perhaps it’s even more so today.
What also stands out is that many of the solutions to these challenges lie in partnerships. Travel management is a hard road to walk alone, or with the wrong companions. Getting the very best partners, including the best possible booking tool, TMC and payment provider, have all become mission-critical.