There is a new normal in travel management and American Express Business Travel (AEBT) has moved to capture the new reality with an interactive scorecard to measure travel program effectiveness. The New Normal is being presented in tandem with the findings released in a new eXpert insights report: "Managing Travel in the New Normal." The report offers a survey of attitudes and actions companies have taken to scale-back travel and plan for the future. Executives responsible for oversight or management of travel can use the AEBT scorecard at www.americanexpress.com/newnormalquiz.
“Companies are struggling to reorient themselves after arriving at the crossroads where aggressive cost-cutting and long-term company performance intersect,” said Charles Petruccelli, president, American Express Global Travel Services. “As the broader economy shows signs of stability, companies are realizing the importance of measuring the impact of changed travel patterns on both sales and growth opportunities. Companies need to ask themselves: did we cut travel in the right places and did we make the proper investments to support smart travel when recovery begins?”
AEBT believes the worldwide recession has fundamentally altered the business travel landscape and companies are adapting to a new operating environment, but also feels there is an opportunity to measure how prepared they are with adjustments made during the recession and in the face of travel demand coming back.
Most respondents to the "Managing Travel in the New Normal" survey indicated they believe travel demand will come back in 2010, albeit not to pre-recession levels any time soon. Produced by American Express Business Travel’s eXpert insights research team, the report is the first formal survey of its kind to examine how corporations have adapted their travel programs in response to the global recession and if their programs are optimized for when travel does pick-up.
The survey analysis provides insight into a variety of areas, including the traveler-centric future of managed travel, a move toward mandating policy and supplier compliance, a willingness of companies to make technology investments to support both travel and alternatives to travel, and taking actions to centralize meetings as the next area for procurement-led savings.
“In creating the scorecard, we first felt it important to objectively survey executives and managed travel professionals to find out what measures they took to readjust travel spending behaviors during the recession and if it would prepare them for the future,” said Lisa Durocher, senior vice president, global marketing, AEBT. “We then designed this interactive platform to help companies measure their own actions, benchmark their programs, and appropriately address their business travel strategy with real-time advice from our experts.”
Traveler Centricity Means Mobile
Survey respondents anecdotally reported that their travelers increasingly desire to leave their laptops behind and these companies have also seen demand for mobile services increase. Respondents also suggested personal mobile services are seen as a potential threat to a traditional managed travel environment.
When respondents were asked specifically about which tools and services their companies make available to their travelers, 37 percent said they leverage technology and mobile services to make life on the road easier, more than 17 percent are researching such tools, while 26 percent said it is not a priority for their organization.
“When a company takes no action in relation to providing mobile services to travelers, they need to consider impacts of employees striking out on their own to access what they need on the road,” continued Durocher. “This has the potential of threatening compliance to policies and suppliers, similar to when travelers went on any website to book travel before managed programs offered corporate booking tools that help ensure company policies, procedures, and preferred suppliers are used by employees.”
Technology Investments Drive Efficiency
Survey results showed that more than 40 percent of C-level executives are willing to spend on new virtual meetings technologies. This finding indicates that top decision-makers likely view the concept of virtual travel as a beneficial investment and supports the idea that companies are transitioning from targeting cost reductions to a strategy built around more thoughtful spending to connect employees.
* 74 percent said their companies use or plan to use audio-conferencing as an alternative to travel
* 15 percent of respondents are currently researching broadband collaboration options
* 10 percent have no alternative technology strategy to replace in-person meetings.
Automating Processes is Key to Achieving ROI Goals
Companies increasingly are looking to make the switch from manual expense processes to online expense automation tools. Especially now that travel managers are increasingly being asked track every dollar of each trip taken and to justify the return on investment in trips.
* 64 percent of respondents with $1 million to $3 million in annual air spend and 70 percent of respondents from large companies with annual air spend of $50 million plus have invested in an expense management solution
* More than 86 percent of all respondents whose companies invested in an automated expense reporting solution link it to a corporate card data feed. These linkages help to avoid human error or fraud, increase efficiency, and drive policy compliance
Durocher added, “A key finding the survey revealed is that even with travel expense under the microscope, travel managers expressed a willingness to spend on technology. Responses highlighted how critical technology is to help companies strike a balance in an effective spend management approach that appropriately supports, rather than hinders, sales and growth.”
Mandates Are The "New Normal"
As the collective public continues to scrutinize travel expenses, companies across the board are cracking down on corporate travel policy. For most companies today, a first-time failure to comply with policy is generally met by a warning to the individual and/or a non-compliance report provided to a supervisor. The survey also found that for individuals who repeatedly fail to comply, nearly 37 percent of companies quickly escalate their response to a non-reimbursement situation to combat policy breaks.
* Only 10 percent of travel management departments that report to procurement or finance will allow a traveler's first compliance failure to go without a warning or notice of some kind
* More than 26 percent of companies with travel management reporting to HR or administrative offices allow a first offense to go unmanaged.
Meetings Management a Must
Less than 30 percent of respondents said their companies currently have a formalized and enforced meetings policy. An additional 11 percent have a meetings policy but do not enforce it, and more than one-quarter of responding companies had no meetings policy implemented. The largest percentage of survey respondents (36 percent) indicated that meeting planning processes were subject to the corporate travel policy, rather than a specific meetings policy.
The study also showed that a major factor in the maturity of meetings management practices within an organization was the sheer size of the travel management program. Corporate travel programs with an air volume of $10 million to $50 million ranked highest among survey respondents (41 percent) for managing meetings through a centralized department.