Value of a Travel Policy
It’s a question many small and mid-sized companies often ask; with only a handful of employees who regularly travel on business, is a travel policy really necessary? The answer is a firm yes! Even with as few as five employees hitting the road or taking to flight throughout the year, and certainly for organizations with 10 or more frequent fliers, a travel policy provides the kind of cost savings — and the ability to monitor and control travel expenses — that can make a significant impact on your bottom line.
Studies by UNIGLOBE Travel and other travel management companies consistently show that by implementing a travel policy and getting their travelers on the same page (booking preferred suppliers, using the same booking tool, etc.), companies save 20 percent or more in travel and entertainment (T&E) expenses in the first year of a managed travel program. Here, in order of greatest savings, are the areas in which a customized program can make the most difference to your bottom line.
Negotiated hotel rates
By spreading your travel budget among a wide number of suppliers, you lose the opportunity to negotiate discounts and reap the benefits that naturally accrue when you establish corporate loyalty to a few vendors. By instituting a travel policy, you can drive revenue to preferred suppliers who, in turn, will reward your travelers with complimentary upgrades, airline lounge passes and other perks such as late hotel check-out or free continental breakfast.
Advance airfare discounts
An effective corporate travel policy that insists on a pre-travel approval process will consistently save you money on the entire trip, not just the airfare. Business travel using tour packages offered in resort and big city locations, for example, can cost much less than traditional, separate purchases of air tickets, hotel rooms and rental cars, particularly when booked in advance.
Car rentals and insuranceAre you putting the volume and pattern of your employees’ travel to the best advantage? You could also be missing out on up-front savings with your rental car company of choice. You may be surprised to discover that you’re paying twice for rental car insurance; have you checked your company’s insurance policy to determine if it can be waived for your employees’ car rentals? With a clear, comprehensive travel policy in place you can also save on fuel costs by insisting that renters refuel with regular unleaded gas. Premium gas is intended for high-performance vehicles only, not rental cars.
In addition to savings generated by a travel policy, your company can better track employee’s whereabouts and ensure their safety. Corporations today face a higher duty of care responsibility for their employees and a well written policy can ensure that appropriate precautions are taken before traveling to high risk destinations. Other features such as limiting the number of employees on a particular flight can protect your business in worst case scenarios.
One advantage that smaller organizations have when it comes to travel policies is their ability to communicate, monitor and ensure compliance with company travel rules. Getting the message out to your employees via a hand-out, a posting on the company’s Intranet, a teleconference or a group meeting is a breeze compared to what multinational firms must do when instituting new policies. Like so many leisure travelers, now many employees are simply relying on Internet websites to book each trip independently, losing valuable negotiating power.
Another major advantage in adopting a corporate travel policy is your ability to capture comprehensive spending data. If you can’t track expenditures, your travel spending can spiral out of control, and it’s a tedious process to review each T&E report as it’s handed in. Working within set guidelines, booking their trips using a customized booking tool or by calling their UNIGLOBE Travel corporate agency, employees are automatically participating in a sophisticated reporting system. You can pull reports anytime, and you can maintain full control over the booking system, which responds instantly if an employee attempts to purchase a trip outside company guidelines (choosing business class on a short-haul domestic flight, for example) or if he or she exceeds a pre-set travel budget.
No one knows the corporate culture and unique travel requirements of your company better than you. Put that knowledge to use! Contact your UNIGLOBE Travel agency and request a policy consultation. We can evaluate your current travel expenditures and design a realistic, effective policy that consolidates your travel expenses, gives you more control of your budget, saves you money and increases your negotiating power, no matter how many road warriors you’re sending out every month.