By Eric White, general manager, Chrome River
Perceptions of business travel will always differ between individual travelers. For some, the chance to stay in high-quality hotels and visit new destinations is a major perk. For others, it might feel like a challenge to juggle between work and family commitments.
A strong corporate travel culture is critical for maintaining a competitive advantage in today’s global market. In an era of video calls and online chat, face-to-face interactions are still vital for sales, and in-person communication supports the strength of customer relationships and boosts employee retention.
Despite these clear benefits, the corporate travel budget is often one of the first areas to be cut when an economic downturn hits. In fact, 69 percent of organizations reduced their travel budgets during the Great Recession. While on the surface it may seem like a logical move, budget cuts can make the financial impact of a recession even more painful. When new sales slow down due to macroeconomic issues, why further impede your sales team? Keeping them grounded and away from leads makes closing deals even harder.
Growing numbers of business leaders and economists are forecasting that the US economy’s current expansion may be drawing to a close. In fact, 69 percent of CFOs expect the country to move into recession before the end of 2020. While a recent survey by the National Association of Business Economists put the chance of a recession during the same period at 60 percent.
How can organizations best protect their travel budgets and cultures when the next downturn hits? First, organizations need to take basic steps to reduce wasteful and inefficient travel spend. One of the easiest ways to control spend involves partnering with a travel management company (TMC) like Egencia. A TMC should let your business centralize all of its travel bookings and allow you to apply policy rules through their platform’s booking feature. For example, travelers and travel managers can see the lowest, or most in-policy flight fares displayed first and hotels can be sorted by class or similar.
Organizations also need to understand that stretching a travel budget doesn’t mean paring costs to the bone. Mandating your top performers to take multi-leg flights on budget airlines or stay in a lower class of hotel will do nothing for morale. Strict policy rules could even drive them away at a time when the value they bring is critical.
What else can be done to maximize the value of business travel dollars? Chrome River, a global leader in expense management, recently commissioned a study from Harvard Business Review Analytic Services to address this.
What’s clear from the study is that capturing and effectively analyzing travel and other expense spend data is vital for any business. If there’s no direct evidence to link expense spend to tangible business outcomes, it can be hard to argue for growing or maintaining travel spend. When other budgets are being slashed or reduced this gets even harder. If a recession hit and sales plummet, it’s difficult to pinpoint a single cause. The drop off in sales could be due to the broader economic climate, or internal factors such as reduced travel and expense spend. Without this data, the cycle will likely repeat during further cost-cutting measures.
The study, "Safeguarding Travel Culture Through Data-Driven Insights," contains a number of actionable findings. It uses data and expertise from across the corporate travel industry to address some of the problems faced by organizations. Leveraging the study’s insights could help you keep your business flowing during difficult economic times.
You can download a free copy of the study on Chrome River’s website.
To learn how a strong travel culture can make your business more competitive, download the Travel culture: Your competitive advantage in a global market report.
 Harvard Business Review Analytic Services sponsored by Chrome River. “Safeguarding Travel Culture Through Data-Driven Insights,” Harvard Business Review Analytic Services, 2019.