What Are You Getting for Your Business Travel Spend?
Your company is on the move. Your people are hitting the road and taking flight to attend meetings and present at conferences. They’re opening markets. And closing deals. They are Getting Things Done. But exactly what are you getting for all that T&E spending? Is the investment a good value – for your traveling employees as well as your business?
Traditionally, we assess return on investment by looking backward -- at what we got for money already spent. But when it comes to corporate travel, it is essential to look to the future, to be sure you will get what you pay for so you can continue to move forward profitably.
Forecasting is critical if you hope to grow your business without wasting precious resources. With travel spending likely one of your heftiest budget lines, however, failure to sharpen your forecasting acumen here can lead to serious financial consequences. You can outright waste money, true, but you can also miss opportunities to save through savvier negotiating or taking full advantage of new travel trends.
It’s time to pivot 180 degrees
Forecasting based solely on the past – what you’ve been doing and how – ignores the fact that change happens. To get the most from your travel spend, you’ll need to proactively contemplate what is likely to be different (or even could possibly be different) in the future. Too bad you aren’t clairvoyant. On the other hand, “educated guesses” have distinct value compared to wild speculation.
But predicting what you will need to spend presupposes you know what you need in the way of travel. One thing’s for sure – it won’t be simply more of the same. And that’s the problem with relying solely on “what was” to predict “what will be.” Just a few years ago, who knew Uber and Lyft would upend ground transportation?
Yet, you must try to anticipate potential changes and challenges in order to prepare for them. Not all changes will significantly affect your organization, but you won’t know if you don’t even see them coming. The key is understanding which changes are most likely to impact your business, and your travelers.
What data will you need to understand those potential impacts and then prepare for them? Ideally, you hope to prevent problems or overspending from occurring in the first place. At the very least, you can take steps to mitigate their effects. But there’s also that spicy upside to preparation – the ability to see into the future puts you in the best position to take advantage of changes that can save you money or make your people more productive, more comfortable, or even safer while they’re on the road.
Ask yourself why
Data for its own sake is pointless, no matter how much you collect. So think quality over quantity, as they say. What you want to learn dictates the data you need. The right data can help you:
- Streamline processes and experience for travelers so they are motivated to follow guidelines
- Forecast travel needs and costs more effectively
- Improve overall corporate travel management
How will data enable you to achieve your objectives -- travel-specific and/or overall business goals? For instance, is some aspect of your corporate travel policy routinely ignored? Data can help clarify the problem so you can devise a solution. Everyone’s happier, you save money.
Become a corporate travel futurist
You have to keep up with trends in the travel industry because these changes directly affect what you’re paying as well as your travelers’ on-the-road experience. They affect your forecasting, travel policy assessment, etc. But your business is changing and evolving as well – more people, probably more travelers, maybe more far-flung itineraries, all of which reflect company growth and goals as well as what’s next for your travel program.
Reactive decision-making slows you down. A future-focused data strategy lets you make proactive travel and overall business management decisions. You can be more efficient and more competitive. That’s some nice ROI.
So what might the future bring that could affect your travel program or individual travelers in some way? Only you can answer that because every organization is different. On the functional side, is your company planning a geographical expansion? What if you lose confidence in a formerly-key supplier – or add a new one? How might your frequent flyers be affected if 737 Max groundings continue longer than projected? Or new air routes are added or eliminated?
On the financial side, what if your employees continue to book out of policy at the current rate? A GBTA study released in August of 2018 revealed that non-compliant bookings account for 37% of hotel stays and 15% of flights. What if you could cut that in half? Or virtually eliminate bookings outside of company guidelines? What if the national (or global) economy slows significantly? You can’t control that, but you should consider the potential ramifications (and not only as they relate to travel).
You know technology will keep changing. How might that affect your supplier relationships? Or your ability to manage corporate travel internally? Cloud-based spend management can cut employee time spent on expense reporting by 70%. And FinancialDirector notes that a comprehensive solutionnotes that a comprehensive solution allows you “to consolidate the entire process and provide that all important end-to-end auditable trail, as well as provide one central reporting function that provides cost-saving recommendations consistently.”
Lola.com impacts travelers, admins, and finance managers with multiple efficiencies and experience boosters that ensure you’re getting the most from your T&E spend.
Your suppliers have data you need
Internal data isn’t enough. Business Travel Executive columnist Jennifer Steinke says your “conversations with suppliers have to be about more than discounted fares or more amenities” because they have data your company needs to forecast accurately as well as control costs. Don’t just settle for whatever the vendor wants to divulge or is willing to part with, she cautions. They’re supposed to be your willing partner, remember? That’s one reason you consider them “preferred.”
Steinke says preferred providers should be able to immediately notify you about service disruptions or failures. For example, within 24 hours of booking, you should know about:
- Out-of-policy bookings
- Incorrectly applied preferred hotel rates
- Changes in airfares for any given key route
And, P.S. She says it will be easier for suppliers to give you more, or more specific, data if you can tell them why you need that information.
Forecasting is critical. For that, you need data. But it has to be the right data. Getting the right data requires asking the right questions – about the future as well as the past. That way, you can answer the most important question: not what are we getting from our travel spend, but what will we be getting for that investment?