Business travel management is not a unidimensional venture. It involves juggling multiple responsibilities, like booking suitable flights and comfortable accommodation, while minimizing overall travel spending. It also involves educating employees about the do’s and don’ts of the company’s travel process. Managing all these aspects requires a robust travel policy.
Your company’s travel policy should be an all-inclusive encyclopedia that answers all corporate travel-related questions. It should define the booking intricacies, budget limits, and approval mechanisms.
Here are 10 travel policy essentials you should include in your company’s travel policy to ensure it is comprehensive.
If you have partnered with a Travel Management Company (TMC ), you must include the details in the policy document. This way, travelers can easily find the official partners’ information and use their services to manage trips.
You should mention the name, contact number, and email address of the TMC’s points of contact and a link to the online travel management platform.
Moreover, to ensure 100% adoption, you can also include a provision stating that only the trips booked through the official channel will be reimbursable.
The primary question you must ask is whether the policy guidelines should be uniform for the entire company. If most business trips are taken for a similar purpose, you can implement the same guidelines throughout the company.
However, if multiple employee groups partake in business travel with different goals, you should create separate guidelines for each group. For instance, the accounts managers go on business trips regularly; hence, you should set lower flight and hotel budget limits to avoid over-the-top expenditure.
Alternatively, the trips taken by C-suite executives require higher budget limits. This is because they are responsible for many critical decisions. So, they need comfortable flights and hotels to be well-rested and ready to make those decisions.
Moreover, if the top management of your company is seen associating with lower-value brands, it can create a negative impression in front of various stakeholders.
Better travel privileges can also be a perk for senior executives and a way to motivate people to rise to senior roles.
You should clearly define if all the employees in the company need approval for their trips. Generally, having at least one level of travel approval is a good idea to avoid non-essential trips and ensure policy compliance.
For instance, you can mandate approvals for junior and mid-level employees for international travel or booking trips last minute. Alternatively, you can choose to exempt high-level executives from requiring approvals.
After determining who needs approvals, define domestic and international travel workflows. Along with that, you can set up the following 3 types of approval workflows:
Another crucial aspect you should consider while defining the workflow is whether the approval requirements will be soft or hard. Soft or preliminary approvals involve a quick, informal review of the proposed travel plans.
On the contrary, in hard approval workflows, the employees must select the booking option, prepare the complete itinerary and send it to the approver for the final nod. The bookings can only be made after they receive the approval.
An automated travel management software can help with control over your policy definition at granular levels and provide real-time visibility into its adherence. Find out how your organization’s travel and expense management processes score against similar such factors and gain an insight into the potential for improvements.
If most of your company’s business trips are routine and don’t involve last-minute approvals, you should include early booking nudges in the corporate travel policy.
Here is how you can encourage employees to book early:
The policy should contain flight class eligibility according to employee levels and flight routes. This is because business class flights cost 3x more than economy class, hence, cannot be offered to regular travelers.
You can allow a higher cabin class, like business or first class, for senior-level employees and longer flight routes to ensure travelers’ comfort.
Alternatively, mid-level employees who travel frequently and for short distances can be given the option to choose between economy and premium economy classes.
Another important aspect of travel policy essentials is the price limit. While defining the price limit in your travel policy, the best practice is to allow the “Lowest Logical Fare.” In simple terms, this means the most economical flight available for the travel date. Setting a dynamic budget limit allows adequate flexibility while ensuring maximum savings.
However, you should also not refrain from putting a price cap over the lowest logical fare. This involves stating a fixed amount that the dynamic price should not exceed.
You should also allow 10-20% flexibility over the maximum flight budget for every employee. This will help accommodate travel-related contingencies.
For instance, if a traveler has to make itinerary changes at the eleventh hour, and all the policy-compliant flight options are red-eye, this extra flexibility will ensure the traveler can book a flight at a reasonable hour.
Flat hotel pricing limits do not work well across different locations. This is because you may not get the same grade hotel for the same price in Manhattan as in Indiana. Hence, you should incorporate a dynamic hotel pricing limit in the policy.
A common practice among companies is to allow the traveler to book “a good 3-star hotel.” This definition enables automatic price adjustments according to the location. However, the statement is vague and can be interpreted differently. Hence, to ensure that nothing significant gets lost in translation, you need a system to translate this definition into a quantifiable limit.
Some advanced travel management platforms offer a “dynamic limit” configuration. Through this feature, the platform automatically adjusts the maximum price per room per night according to the location. Hence, travelers can book the most cost-efficient options.
The policy should also include limits on flights, hotels, and car rental add-ons you may have allowed employees to purchase to increase comfort. You should specify which add-ons are reimbursable, for instance, extra legroom for flights longer than 7 hours, the option to bring their pets during business trips, or in-flight WiFi access. You should also define the off-limits add-ons, like airport lounge access.
A travel policy is essential to optimize your business travel management process. A good travel policy lays the foundation of corporate travel program. Hence, you should consider above travel policy essentials while drafting it. Including the above-mentioned aspects in your policy draft can make it comprehensive and, thus, better suited to travelers’ needs and the company’s goals.
ITILITE’s integrated travel and expense management software offers lightning-quick bookings, advanced travel analytics, an extensive inventory of hotels and flights, end-to-end expense management, live traveler tracking, and many more.
To know more about ITILITE’s advanced features, book a free demo with our product expert today!
Try ITILITE for free now.
Subscribe to the Itilite blog and never miss a post!