5 Steps Your Clients Can Take Now

The travel industry is resistant to change. For example, a substantial number of US travelers still use traveler's checks.

Even though change is difficult within the travel industry, it has now come to a point where things must change. What does this mean?Controlling-the-ramp-of-business-travel-expense-post-pandemic-ebook

 

COVID-19 Changes the Face of Business Travel

First, it is estimated that not all business travel will resume at previous rates following the COVID-19 pandemic. Up to 36% of business travel may permanently disappear (or at least take a very long time to come back) even once infection rates subside, but this doesn't spell the end of the business travel industry.[i] Instead, travel management companies (TMCs) have an opportunity to make the remaining business travel more profitable and more efficient, allowing them to generate the same or greater revenue from a smaller number of customers.

Right now, some businesses have made the following realizations:

  • A drop in travel expenses is not necessarily correlated with a drop in overall corporate revenue.
  • Many business processes that used to require in-person meetings can be completed via videoconferencing at a lower cost.
  • There's a low barrier entry for adopting technologies that enable remote work.
  • Future business travel must be definitively linked to ROI.

While these realizations may seem like depressing news for TMCs, there is a potential upside. This is because businesses may understand that future business travel must generate ROI—but they don't have systems in place that allow them to measure that ROI while keeping costs down. TMCs, on the other hand, are able to offer their expertise as a service.

To remain relevant, in other words, TMCs can transition from being travel enablers to travel gatekeepers. They can minimize costs for their corporate clients, while maximizing profits for themselves. They can also help corporate clients identify which categories of travel generate the best ROI.  What does this look like?

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1 - Implementing a Travel Request Process

First, TMCs need to help businesses understand what safe travel will look like in the post-pandemic era. Even as the current vaccine progress rate suggests that it may be safe to travel again as soon as Fall 2021, business travel may never again be as safe, reliable, and effortless as it once was.Implementing a travel request process

Although it's impossible to predict the future, many experts agree that the danger of the COVID-19 pandemic may never be fully suppressed, even if a majority of Americans are vaccinated. It may be that new variants emerge every winter, making travel less safe and more difficult.[ii] In addition, disparities in vaccine supply mean that less industrialized nations may not be fully vaccinated until 2022 or 2023.

Even when business travel begins again in earnest, there's still no guarantee that it will be perfectly safe. Therefore, any travel request and approvals process needs to consider the safety of the trip itself and the organization at large. Points to consider include:

  • Given the time of year and the destination, does this travel request offer greater risks than normal? Is there a risk that a traveler could get sick or bring sickness back to the office?
  • If the travel request offers a greater risk than normal, does the trip's potential ROI outweigh the risk? How is this calculated?
  • What actions need to be taken—and what costs need to be expended—to make the trip safer? Do you need to mandate PPE and testing before travel and before returning to work? Do you need to purchase additional travel insurance?

Travel insurance is most likely going to emerge as one of the most significant new cost centers in travel. Although many customers already purchase travel insurance for amenities like trip cancellation coverage, travelers are increasingly drawn to policies that can help them compensate for the pandemic.

Travel insurance is an important area where TMCs can provide expertise—because not all travel insurance plans cover COVID-19 cancellations, and others do this only under certain conditions. For example, if a traveler cancels a trip because their destination imposes a two-week quarantine on travelers, most ordinary travel insurance tiers won't refund them. Instead, travelers will need to purchase a "cancel for any reason" policy that's up to 40% more expensive than normal.[iii] Although many businesses have corporate insurance policies that predate the pandemic, TMCs can help businesses review these policies and make sure that they continue to cover emerging risks.

Safe pandemic travel will be more expensive, but the risks resulting from any lack of safety are much worse. TMCs can demonstrate their value by creating a travel request process that takes both cost, risk, and ROI into account.

 

Download our ebook "Controlling the Ramp of Business Travel Expense Post  Pandemic."

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Enforcing Safe Travel Policies Grasp Technologies

2 - Enforcing Safe Travel Policies

It has always been important to maintain a degree of standardization when it comes to business travel. Different hotels, airlines, and transportation services offer different prices, services, and differing levels of reliability. TMCs have always suggested that travelers use their preferred partners during their trips. This minimizes the cost to the company while maximizing traveler comfort and success.

Now it is time to turn those suggestions into policies—and it might also be time to reevaluate long standing relationships with your preferred travel services. TMCs need to understand whether their preferred travel services can comply with the following safety rubrics:

Airlines:

  • At the time of writing, the TSA is currently enforcing a mask mandate on all passengers traveling within US airports—but in the future, airlines may have substantial leeway to enforce masking.[iv] TMCs should find airlines that reliably enforce mask use during outbreaks at both the origin and the destination of a flight.
  • In addition, research shows that leaving the middle seat open is an effective way to reduce the spread of COVID-19 on flights.[v] During outbreaks, look for airlines that leave middle seats vacant or for airlines that allow passengers to rebook on less crowded flights.
  • Airlines should offer generous refund policies if a passenger has to reschedule at the last minute due to illness.

Enforcing Safe Airline Travel Post Pandemic

Hotels:

  • Hotels must be both transparent and detailed regarding their efforts to stay sanitized. It's not enough to say that they clean their public areas—the cleaning schedule and a detailed account of the cleaning methods should also be available.
  • Similarly, they should tell you which specific amenities have been removed due to safety concerns. In addition, all chosen hotels should note their compliance with the safety guidelines issued by the American Hotel and Lodging Association (AHLA). These include training for employees, a list of recommended cleaning methods and products, and guest requirements.[vi] Lastly, hotels should be willing to refund booking fees if a traveler chooses not to travel due to an outbreak in the hotel's location, even at the last minute.

Rental Cars:

  • Research shows that most transmission of COVID-19 is airborne. While it's still best practice to clean shared surfaces, the greatest danger comes from other travelers. Therefore, the best policy is to train travelers not to share cars unless absolutely necessary and to wear facemasks and maximize ventilation if car-sharing is unavoidable.
  • As before, look for car companies that publicize both detailed and transparent information about their sanitization regime. Also, it would be best to prioritize companies that offer generous cancellation policies in case of an emergency.

Finding services that adhere to these policies consistently may be difficult, but it's of vital importance. Not only will this protect the health of TMC customers, but it can also save them a great deal of money. The economic damage of a COVID-19 infection accrues in the form of lost productivity, sick leave, and health insurance payouts. Finding COVID-compliant travel service providers can help TMC clients avoid these costs.

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3 - Track Customer Spend as Travel Ramps Up

For those who don't spend much time traveling, airline tickets seem like the highest cost of any trip. Seasoned professionals understand that airline costs represent only about a third of travel costs. Hotels, transportation, and meals take up the rest of the expense. What's more, prices for these services are all increasing. Even as businesses shave down their overall expenses by tamping down on travel, each individual trip's cost is still going up at the rate of roughly 2% to 3% per year.[vii]

As travelers return to the skies post-pandemic, businesses will likely increase the amount they spend on travel, even if the expense isn't the same as it was before. Right now, there's still a period where business travel is quiescent—and this means that TMCs can take advantage of this blank slate. TMCs can rethink the way they mediate between businesses and travel services, restructuring their relationship to accomplish several critical business objectives:

  • Keeping track of rising prices and offsetting them where possible
  • Forecasting increases in travel expense
  • Creating a complete picture of the costs associated with travel
  • Attributing business travel to ROI

Right now, many businesses don't have sound systems in place for dealing with this. Consider a corporate credit card, for example. Let's say that a business unit sales team has a single corporate credit card that they share. If two different people are taking two different trips at the same time—one to New York and one to Las Vegas, for instance—then it's hard to tell whether to attribute a car rental to the Las Vegas trip or the NYC trip. It should be possible to understand this information by drilling into receipts, but this is an irritating and time-consuming task for accountants.

Because of this, a business might have a good idea of what gets spent on business travel in total, but not what gets spent on an individual basis. In addition, there's no good way to calculate the ROI of business travel—there's no way to say, "here's what Bob spent on that trip to Vegas in June, and right next to it is the amount of money we won from the deal that he closed during that trip."

The Pareto Principle is fully at work in business travel—20% of the business trips will yield 80% of corporate ROI. In addition to improving traveler safety and optimizing expenses, TMCs can also demonstrate their value by helping their customers identify which 20% of business trips will most likely be revenue-positive.

Controlling-the-ramp-of-business-travel-expense-post-pandemic-ebook

 

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4 - Virtual Payment Card Impact Ease of Tracking and Control Spend

By issuing virtual payment cards to business travelers, TMCs can help track payments and forecast the likelihood of a successful business trip. How does this work?

The virtual payment card takes the form of a credit card number that is deployed only once—to make purchases—and then immediately deleted. This makes it easier for business travelers to book flights, hotels, and car rentals, and also makes it easy for TMCs to track and forecast expenses.

Let's say that Bob needs to book another flight to Las Vegas. He requests and is issued a virtual payment card. He uses the card only once to purchase a hotel stay. The virtual payment card is immediately deleted once the transaction is complete and can never be reused. This accrues several benefits for Bob, the company as a whole, and the TMC.

First, Bob's trip is booked and can be paid for in advance. There is no direct financial cost to Bob, and Bob doesn't have to submit an expense report or wait to be reimbursed. Also, there's no danger that Bob will make an expense that can't be reimbursed. The carrier, hotel, transportation firm, and insurance provider have all been vetted and approved in advance by the TMC, which means Bob doesn't have to worry about spending money that he can't get back later. All Bob needs to focus on is the trip itself, which means he has a better chance of closing his deal.

Virtual Payment Card Impact Ease of Tracking and Control Spending

Second, the company benefits because Bob's business travel is immediately and inextricably associated with Bob's trip and Bob's sales success. Because the payment card can only be used once, it can only be used to purchase a single booking. Any expenses that show up next to that card number must be related to only one booking. There's no longer any question as to whether a given expense is associated with a given booking.

Since virtual payment cards provide rich data, companies can also experiment with integrations. For example, a company could create an integration with Salesforce such that business travel could show up in the record of interactions with a customer or prospect. For example, this would make it very easy to see that Bob made a business trip that cost $2000 and subsequently closed a deal worth $10,000.

Lastly, the TMC can collect this data and conduct analytics to make it even more valuable—they can find the secret that distinguishes a business trip that's likely to be profitable from one that isn't. They could discover that trips to major cities are the most profitable, or that trips to prospects more than a thousand miles away are most profitable, or that trips to customers in the healthcare industry are most profitable. Using the conclusions from analytics, the TMC can reduce expenses for their customers while ensuring that they don't lose ROI as a result.

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Don't lose ROI on travel expenses

5 - The Duty of Care is Changing in a Post-Pandemic Environment—but TMCs Also Have New Ways to Work with Customers

To summarize, the ways that TMCs must take care of business travelers changed mightily in a short time. Whereas before, TMCs were charged with being facilitators of travel. They're now gatekeepers. Travel insurance was mostly designed to protect against the expense of a canceled flight—and terrorism in very rare cases. Now, it's supposed to protect against the effects of a pandemic. Customers that once flew business travelers all over the world are now mainly keeping to themselves.

TMCs need to turn this crisis into an opportunity. Using virtual payment systems, analytics, and integrations, they can turn business travel into a valuable data source that lets customers maintain or increase their ROI from business travel while decreasing their expenses. Using virtual payment cards as a point of reference, TMCs can aggregate data from:

  • Multiple expense systems
  • Multiple travel agencies
  • Multiple reservation systems
  • Multiple business units
  • Multiple reporting methods

In other words, TMCs can enable a lot of analytics and cut through a lot of obstacles by modernizing a relatively small aspect of the way that they arrange business travel.

Lastly, and perhaps most importantly, TMCs can help keep their customers safe. Companies themselves are ill-prepared to evaluate health risks across multiple modes of travel and numerous service providers—the intricacies are too great, and their expertise lies elsewhere. TMCs, however, are already familiar with evaluating multiple travel services at a high level of detail. By bringing this expertise to the table and using it for health and safety, TMCs won't just bring business travel back to the fore—they'll help make it safer and more profitable than ever.

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The Duty of Care is Changing in a Post-Pandemic Environment.

About Grasp Technologies

Founded in 1996, Grasp Technologies is the leading provider of travel data management, visualization and payment solutions in the T&E industry. Initially founded to address the critical need for customized reporting and data management in the travel industry, we’ve held to our belief in helping our customers thrive and to succeed by transforming data into useful intelligence.

Throughout our years in business, we’ve engineered cutting-edge travel data management, integration, intelligence and consolidation solutions for client companies of all sizes – sometimes even outside of the travel industry. Our growing suite of products and service tailor to specific business needs. We are obsessed with solving complex problems in aggregating, consolidating, normalizing, translating, cleaning and visualizing data for travel agencies/TMCs, corporations, governments, and other technology providers around the world. Our state-of-the-art solutions have been implemented in more than 100 countries to improve business intelligence and process efficiency. All leading to more profitable clients who can focus on top-line growth. We have grown in excess of 50% year over year for the last decade with back-to-back positions on Inc Magazine’s List of 5000 Fastest Growing Companies.

We have defined many of the industry’s best practices in travel data management, global data consolidation and data bridging in T&E and serve many of the global leading financial institutions and corporations. That’s why many travel management companies, corporations and corporate travel departments turn to Grasp Technologies to manage their complicated data. We believe that with happy customers and happy employees, everyone wins. 

 

Controlling-the-ramp-of-business-travel-expense-post-pandemic-ebook

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[i] The Wall Street Journal, “The Covid Pandemic Could Cut Business Travel by 36%—Permanently,” Dec 2020.

[ii] Ars Technica, “COVID herd immunity may be unlikely—winter surges could “become the norm,” Mar 2021.

[iii] The Washington Post, “What to know about travel insurance as the pandemic enters a second year,” Feb 2021.

[iv] TSA.gov, “TSA to implement Executive Order regarding face masks at airport security checkpoints and throughout the transportation network,” Jan 2021

[v] MIT Medical, “How safe is air travel?” July 2020.

[vi] AHLA, “ENHANCED INDUSTRY-WIDE HOTEL CLEANING & SAFETY GUIDELINES,” Mar 2021.

[vii] Hotel Business, 'Study: Average Business Trip Cost Will Increase in 2020," Oct 2019.

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