The Blueprint to Effective Business Travel Policies
Crafting a corporate travel policy might seem like a daunting task, one you might be tempted to throw together and call it a day hastily. However, let's not forget that your policy is a potent tool capable of impacting future decisions made by travellers, managers, and administrators.
A well-designed policy can streamline your company's travel, simplifying reporting and tracking of business trips. On the other hand, a poorly structured policy might not influence behaviour at all.
This guide kicks off with an exploration of what a corporate travel policy is and its potential benefits to your company. It then delves into critical topics and resources: best practices for drafting a travel policy, tips for creating a flexible corporate travel policy template, strategies for achieving near-full travel policy compliance, managing trip approval with technology, and even automating the business travel booking process.
Unpacking the Concept of a Travel Policy
At its core, a travel policy is a company's blueprint for approving, booking, and expensing travel for business purposes. Corporate travel policies are usually the brainchildren of the Finance and Travel Managers and typically detail matters like business class eligibility, advance booking periods, and precautions for solo travellers.
An all-encompassing travel policy generally includes both international and domestic travel and addresses:
- The booking procedure and approved corporate travel company
- Allowable costs (hotels, airfare, ground transportation)
- Special rules for pricier cities or routes
- Preferred Vendors
- The approval process for trips exceeding typical limits
- Reimbursement process
- Acceptable and unacceptable expenses
- Debriefing process
- Travel insurance carrier
- Duty of care vendor or procedures
Evidently, a travel policy transcends booking and its associated costs. It governs all your travel arrangements and impacts employees across multiple departments.
The Rationale Behind a Business Travel Policy
Clearly defined guidelines promote fairness across the board.
Travel policies are more than just a list of dos and don'ts. They shouldn't incite frustration or eye rolls. Instead, well-crafted travel policies can positively impact both travellers and businesses. Here's how:
Perks for Travelers
- Flexibility and autonomy to book their own travel within guidelines
- Safety prioritization (Travelers' whereabouts are monitored)
- Reduced confusion and hassle with travel booking
Advantages for the Company
- Control over travel spending fluctuations
- Minimized friction over expenses and reimbursements
- Reduced overall business travel costs and optimized budget
- Fostered fairness and a positive company culture
Crafting a Corporate Travel Policy
The nature of your company's travel policy will be influenced by your company's travel habits, the individuals travelling, and the purpose of their travel. Nevertheless, some elements need to be present in any company's policy.
It's paramount to include your approved booking process and tool. Do you prefer travellers to use one business travel platform like BNW Travel to consolidate their spending? Do you want travellers to book for themselves within policy, or would you rather have them make a travel request to an office manager who handles all trips?
Your policy should also transparently list what purchases can be expensed and what can't, preventing your travellers from unwittingly buying something that won't be reimbursed or adding unnecessary charges to their corporate card. For example, business expenses like entertainment expenses, business meals, or registration fees for events must be explicitly outlined in your policy.
Guidelines for Accommodation Policy
Your company's accommodation policy rules and lodging expenses need to be embedded into your corporate travel policy. Every organization has different regulations regarding accommodation within their corporate lodging policy, so it's crucial to clarify them from the outset.
As for hotel costs, it's typical for organizations to set a maximum hotel star rating or
nightly/room rate that employees cannot exceed. It's also normal for employees to be required to stay in standard hotel rooms, with 'deluxe' suites or rooms off-limits.
Secondly, be explicit about which incidentals can be reimbursed. These can range from room service and dry cleaning/laundry services to valet parking and the use of hotel amenities (gym, swimming pool, sauna, etc.)
Remember, hotel rates are susceptible to seasonal fluctuations and locations, so you need to consider any variations depending on the time of year and employees' destinations. For this reason, many organizations prefer to partner with specific suppliers, negotiate travel packages, and require their employees to use these suppliers whenever possible.
Travel and Entertainment Policy Guidelines
Your policy should also include a section on travel and entertainment best practices. This should include rules and guidelines on what employees can purchase in the name of entertainment while travelling.
Travel and entertainment guidelines should include the following:
- Spending limits for meal expenses (either per meal or per day basis)
- Rules on what is allowed when entertaining clients (meals, alcoholic beverages, etc.)
- Clear instructions on situations where alcohol can and cannot be expensed and a maximum amount that can be spent on alcohol per head
- List of unacceptable personal expenses, such as laundry services, mini-bar charges, and personal phone call charges
- Instructions on information, original receipts, and other documentation required to process reimbursements
The travel policy is an ideal place to put your expense reimbursement process. This way, travellers have a reason to check out the policy. You also need to state the final approver for these expenses clearly and the preferred payment method (do you offer travel advances? Should travellers use their own debit or credit cards for these payments?).
Lastly (but certainly not least), you need to include all the safety information travellers need. What should they do in case of an emergency while they're away? Who should they contact for different types of emergencies? What insurance is available to them?
For more details on all of the above, see our corporate travel policy template and a section on how to write a policy.
Air Travel Policy Guidelines for Employees
Formulating an easy-to-follow air travel policy for employees is key to ensuring your employees' safety and keeping your business travel expenditure as low as possible.
Your air travel policy should primarily contain documentation for your employees to refer to, ensuring their bookings are compliant, detailed information on what is needed to submit travel expense forms, a list of approved in-flight purchases, and, if relevant, a list of your company's preferred airlines.
Two of the most common queries surrounding air travel policies pertain to business class bookings vs economy bookings and rules about using business frequent flyer miles for personal use. Below, we delve into both of these queries in more detail to help you draft the most helpful and clear air travel policy for employees.
Guidelines for Business Class Bookings
Your corporate travel policy should unequivocally lay out the guidelines for business class bookings. Although generally less economical than economy class, there are situations where business class bookings can be justified.
Many companies allow business class bookings for long-haul journeys exceeding a certain number of hours, usually between six and ten. This provision increases employee comfort on extended flights, contributing positively to traveller satisfaction - a crucial travel management metric.
Your policy should also cater to instances where business class bookings end up being less expensive than economy class after factoring in additional costs like baggage fees and in-flight meals. Furthermore, in situations where last-minute travel is necessary, and economy class is unavailable, employees could be permitted to book business class.
BNW Travel’s Policy Builder tool allows you to account for those flights by creating custom filters that account for things like price, class, and location.
If there are no allowances for business class bookings, your policy should explicitly state this to prevent confusion during the reimbursement process.
Guidelines on Using Business Frequent Flyer Miles for Personal Use
Employees inevitably accumulate frequent flyer miles during business travel. However, no global standard determines whether these miles belong to the company or the individual. Therefore, your policy must address this issue.
Some companies acknowledge the personal sacrifice in business travel and permit employees to retain frequent flyer miles. Others may require these miles to offset future business travel costs. If your company allows employees to use frequent flyer miles, consider implementing rules to prevent booking more expensive fares solely to earn extra miles or favouring an airline due to their frequent flyer program.
Consider providing a tool, like BNW Travel that can help employees conveniently track and manage their accrued miles.
Common Challenges with Travel Policies
Corporate travel policies often face several obstacles, reducing their effectiveness:
- Difficulty in comprehending the policy.
- Lack of interest or ability to remember the policy.
- Effective communication and accessibility are key to successfully implementing your corporate travel policy. Here are some tips to ensure higher compliance rates:
How to Market Your Corporate Travel Policy
Effective communication and accessibility are key for your corporate travel policy's successful implementation. Here are some tips to ensure higher compliance rates:
- Visibility and Accessibility: The policy should be readily accessible, ideally through your HR or employee portal. It should be concise, easy to read, and free from excessive jargon. Providing a checklist could also assist employees in following each booking or expense submission step.
- Create a Comprehensive FAQ: An FAQ section can address recurring questions about your travel policy. This section should be updated whenever changes are made to the policy.
- Encourage Employee Feedback: Encourage feedback to understand the employee experience and potential policy issues. This feedback can be used to enhance your policy and boost compliance rates.
Travel Policy Problems By the Numbers
Despite comprehending their company's travel policy, 64% of millennials still book outside of it. Additionally, 72% of businesses haven't achieved their desired level of travel policy compliance, with 50% or more of hotel bookings being made outside of corporate policy. These challenges could be addressed by updating the policy to reflect current travel prices and demands and ensuring the policy is actionable and technologically enforceable.
How to Integrate Your Policy into the Booking Process
To improve compliance, embed your travel policy into your business travel booking technology. Use a booking tool that includes customizable travel policies and approval workflows, notifying the relevant manager or finance department when a trip deviates from the policy.
BNW VoyagePro allows you to upload your travel policy for employees to access anytime during their booking and access multiple approval workflows that will fit your business's specific needs.
Business Travel Policy for Startups
While startup travel policies shouldn't differ significantly from those of established companies, there are some unique considerations:
- Self-booking: Millennials often prefer booking their own travel arrangements. Allowing this freedom within the policy's confines could be beneficial.
- Embracing Work and Leisure in Travel: A popular trend among millennials is combining business and leisure travel. If you plan to offer this perk, ensure your policy includes clear bleisure guidelines.
- Non-Traditional Accommodations: Younger employees may prefer unique accommodation options like Airbnb. If feasible, these options could be integrated into your policy.
As you develop your startup's travel policy, align it with your business objectives, considering both employee satisfaction and your company's interests. For comprehensive coverage, consider using travel policy templates as a starting point.
Conclusion
In conclusion, VoyagePro offers a comprehensive solution to business travel management. With a suite of tools that simplify travel bookings, track expenses, and enforce travel policy compliance, it significantly streamlines corporate travel processes. It also allows for flexibility and customization to cater to the unique needs of every business, whether a startup or an established company. By prioritizing both the comfort of the employees and the financial considerations of the company, VoyagePro proves to be an invaluable resource in modern business travel management.
