Corporate travel is an essential part of most businesses. But it can also be pretty expensive if not managed properly. Organizations across the globe are striving to optimize their operations and reduce costs. Hence, achieving corporate travel savings has become a critical goal for companies in order to stay profitable and sustainable.
However, many factors can hinder a company’s ability to achieve cost savings in travel. These factors include employee behavior, outdated technology, and lack of data analysis and reporting.
Let’s list a few factors stopping you from achieving corporate travel savings. By addressing these challenges, travel managers can identify opportunities for cost savings, optimize their travel spend, and ultimately improve their bottom line.
Here are the seven factors that you should look into:
1. Lack of Visibility Into Travel Spend
One of the primary reasons why businesses struggle to save on corporate travel is because they lack visibility into their travel spend. Without an accurate understanding of how much is being spent on travel, where the money is going, and which expenses are essential, it can be challenging for travel managers to identify areas for cost savings.
To overcome this issue, travel managers must implement a robust employee expense management system that provides real-time visibility into travel expenses. Whether a business lunch with clients, attending a business conference, or expenses such as mileage expenses, this system allows you to access all the expense data in real time. This data can assist you in identifying areas of cost leakages and unusual spending. Â
Furthermore, this data also provides travel managers with opportunities for negotiating better rates with travel vendors. Deeper spend visibility also lets you take control of the company’s travel budget and distribute them in a better way.Â
2. Ineffective Travel Policies
Another factor that can hinder corporate travel savings is ineffective travel policies. Many organizations have policies that are outdated, too complex to understand, or not well-communicated properly to employees. This can lead to confusion and non-compliance. When business travelers fail to comply with travel policies, there can be little to no room for cost-saving opportunities.
To address this, travel managers should take a holistic approach to travel policy management. Here, you must review your existing travel policy to ensure it aligns with your organization’s goals, simplify any guidelines wherever possible and effectively communicate the policy to employees.
Additionally, travel managers or finance managers should automate their travel policies. When you integrate your travel policies into an automated system such as travel management software, your employees can get real-time visibility into the policy. This not only ensures policy compliance but also aids corporate travel savings.Â
3. Inadequate Communication and Collaboration
Another significant challenge to achieving corporate travel savings is the lack of communication and collaboration between stakeholders. This includes employees, travel managers, finance teams, and travel vendors. When there is no proper communication and collaboration between them, it can be very challenging to make an informed decision about travel spending.
By establishing clear communication channels between various stakeholders, you can overcome this issue. You must conduct regular meetings, share information via emails or a common chatbox, or even host collaborative planning sessions.
Here, everyone can give their updates, opinions, and suggestions about travel spend, identify areas for improvement and collaborate to update the travel policy. This helps ensure corporate travel savings to a certain extent.
4. Failure to Leverage Technology
Technology plays a crucial role in the business travel world. It not only helps you with your booking process but also saves costs. But, many businesses fail to leverage it effectively, which can put a strain on your company’s finances. Moreover, without technology, it becomes difficult for companies to operate efficiently.
Hence, it becomes imperative that you make use of the latest travel technology for corporate travel savings. For instance, travel and expense management software help streamline the booking process, provide real-time visibility into travel expenses, identify any travel expense fraud, and automate policy compliance.Â
Additionally, virtual travel consultant such as ITILITE Mastermind helps you identify any cost-saving opportunities and suggests actionable ways to improve the corporate travel management process. You should also regularly review and evaluate the effectiveness of these technological solutions, which will help you seek out new opportunities to leverage technology for cost savings.
5. Lack of Data Analysis and Reporting
Getting comprehensive data and analytics is essential to ensure corporate travel-saving opportunities. Without the data, it becomes challenging for travel managers to enhance the business travel management process, make smart decisions, and save costs.
It is also vital to track essential travel KPIs like employee and department-wise spending, out-of-policy bookings, and budget savings, among many others, that will help you improve your financial performance.
Hence, you must invest in T&E software that combines all the travel data in a single dashboard. The dashboard allows you to view and manage all your expenditures. Travel managers can also get to see the top spenders, the percentage of any last-minute bookings, out-of-policy bookings, most traveled destinations, and many more. With these reports, you get insights that will help you save business travel costs.
6. Failing to Measure ROI
Most companies struggle to achieve corporate travel savings because they fail to measure the Return On Investment (ROI) of their travel spend. ROI is a critical metric that companies must use to measure their financial success. Without understanding the ROI of business travel, it’s difficult to identify areas for improvement or justify the expense of business travel.
To overcome this challenge, travel and finance managers should establish clear metrics for measuring the ROI of their travel spend. This may include metrics such as cost savings, employee productivity, and revenue generated from travel.
By tracking these metrics, travel managers and finance managers can identify areas for improvement and make informed decisions about travel spend.
7. Less Employee Engagement
Employee engagement is a critical factor in achieving corporate travel savings. If your employees are not engaged during the travel booking process, they may feel less valued and not be motivated to adhere to your travel or expense policies. This, in turn, can result in cost leakages, affecting your overall company’s finance.
Therefore, travel managers should involve employees in the travel booking process. You should provide training and guidelines on various business travel expenses and let them know the expense limits. You should also inform them what expenses are reimbursable and non-reimbursable.
Additionally, travel managers should communicate the importance of cost savings and policy compliance to employees, highlighting the impact these efforts can have on the business.
Ensure Corporate Travel Savings with a Travel Management Company
Corporate travel savings is one of the important aspects of business travel. Hence, many organizations are looking for measures to save travel costs. However, if you don’t address the factors that are listed above, they can stop you from achieving corporate travel savings.
A better way to achieve corporate travel savings is with the help of a TMC such as ITILITE. At ITILITE, we leverage travel and expense management software that gives complete insights into your travel spending, prepares a robust travel policy per your company’s standards, utilizes a virtual travel consultant, helps you identify fraudulent travel expenses, and many more.Â
