Small & Midsize Firms Hitting Refresh on Travel Management

The pandemic hiatus and recovery had a clear impact on travel management at small and midsize companies, leading many to reevaluate their policies or build a program where there was none. Many have sharpened their focus on employee needs, risk management and savings considering rising travel costs and safety concerns. For some, prior travel policies were not giving them the visibility they needed to make good decisions, whether they were unmanaged, lightly managed or tightly managed. Reevaluating customer needs, technology, partners, and policies—or building a policy from scratch—has become commonplace in this new, riskier environment. SME travel programs were seemingly forced to develop overnight, and many SMEs now lead the way as travel management evolves.

Though SMEs might be nimbler and more flexible than larger corporations, they still value travel management and the benefits of a tightly run program. According to the BTN’s SME survey results, more than seven in 10 respondents closely manage travel, while 16 percent run a lightly managed program. More than half (53 percent) have a dedicated, full-time, in-house travel manager, while about 32 percent have someone in the organization with travel management responsibilities along with other duties.

“We are centralizing all travel and expense management in one department rather than each division being responsible for their own, thereby ensuring that everyone is traveling under the same rules,” one travel manager respondent told BTN.

Travel is in the spotlight as finance and upper management seek more cost control, especially considering inflation and economic concerns. Nearly half of respondents said their organization is managing travel more closely than before the pandemic, while only 3 percent have a looser policy. When asked about their travel management policy goals or plans for 2023, tighter management was high on the list. “We need to drive compliance and implement cost savings technologies and tools,” said one. Others mentioned new travel policies with “more oversight on spend,” especially for international travel or “high-cost tickets.” Another implemented “executive leadership dashboards on travel.”

However, a tighter policy doesn’t necessarily limit traveler perks, as there can be trade-offs and compromise. “We permitted reimbursement of ancillary services, such as priority boarding and paid seats. We limited the use of private car services and launched Uber for Business,” one travel manager explained.

Back to Normal?

Six in 10 travel manager respondents projected their organizations’ 2023 business travel spending would match or exceed 2019 levels. With that move toward “back to normal” status, 58 percent indicated no changes in company travel policy rules during the past 12 months. But for those 41 percent who did report changes in the past year, rules for 70 percent were tightened versus 30 percent who now have fewer or less strict rules. According to one travel manager with travel compliance above 80 percent, “there is always room for improvement.”

A Balancing Act

For most SMEs struggling to attract and retain talent, traveler satisfaction is high on the agenda. Many spoke about adding new programs to improve the traveler experience, including increased meal allowances, more generous long-haul flight policies, higher hotel caps, and more flexibility around combined business and leisure travel. Duty of care also remains a top priority as companies seek to keep their employees safe. But as prices keep rising, there could be closer scrutiny of spend. “SMEs are hyper-focused on cost control, savings and visibility,” according to Dan Corwin, executive revenue leader at travel management company Navan, leading many to tighten their rules to stay within budgets.

Managing costs against traveler needs requires better tools and tighter management. SMEs are seeking improved access to data, both current and forward-looking, to understand the impact of traveler-focused policies on the budget, while also keeping employees’ best interests in mind. “We need to smooth out the travel experience, build easy tools to educate staff on policy, and reduce costs through compliance where possible,” said one travel manager.

Brianna Lazzaro, group travel manager at medical device development firm Globus Medical, is prioritizing that travelers are “comfortable, happy and safe” over cost. As travel continues to be scrutinized by finance and upper management, it is important to remember that “travel is really personal,” and “it’s a balancing act” to keep all stakeholders satisfied, she said. Audubon, Pa.-based Globus Medical is in the process of rewriting its T&E policy with certain changes in mind, including updating permitted classes of service, days of rest, long-distance travel rules and hotel room rate caps for its employees.

Renegotiating with suppliers and pushing preferred vendor usage is another key initiative for 2023. “We are looking at air spend and working with preferred vendors to home in on key markets for cost savings,” said one travel manager, who may field a ground transportation company request for proposals this year, “due to the rising costs of transportation.” Another wants to “push preferred vendor usage through custom messages and communications.”

TMCs on Notice

Some SMEs are putting TMCs on notice and are looking to renegotiate, consolidate or replace their current TMCs and online booking tools. Faster turnaround, better self-service, New Distribution Capability connectivity and synching with mobile apps are among some of the imperatives they are looking for in a partner. Many mentioned plans to consolidate their TMCs, and one said it was time for “OBT refinements or replacement.” Another planned to “switch to a new TMC and deliver new key performance indicators to budget owners.”

SMEs must provide greater service in some cases with fewer staff, raising the importance of effective automation. SMEs reviewing their travel policies often are seeking more self-serve options and easy-to-use tools so they can manage effectively with smaller teams, Corwin said. He mentioned implementing AI offerings, including Navan’s AI-powered chatbot, Ava, as an example of a ways SMEs can gain efficiency through self-service. Lazzaro agreed, adding Globus is looking to incorporate AI into its offerings to make self-service “easy and seamless.”

Other respondent travel policy goals for 2023 include improved duty of care, increased sustainability efforts, and preparedness for NDC. “We need to source a TMC that can fully operate with NDC changes,” one manager wrote.

Team Travel

More companies are traveling to bring their teams together during a shift to hybrid work. The BTN survey found that 84 percent of responding companies had some sort of flexible work policy, and only 10 percent required all employees to work on site every day. These new patterns of travel, in which remote employees often meet at headquarters or other central locations, have driven many changes to the travel program. “We are more flexible with flight locations in the remote work environment,” wrote one respondent.

SMEs are broad and diverse, and their travel management goals vary widely based on size, industry, and other variables. However, SMEs often share a common desire to build robust travel programs that empower better decision-making. It’s all about “control, visibility, efficiency and self-service,” said Corwin. SMEs have sharpened their vision for travel’s role in the organization and are now better prepared for the next phases of travel management.