For more than 30 years, travel decision-makers at corporations, colleges and universities, and government agencies have crafted managed travel programs to deliver savings, service and/or value. The basic framework of managed travel programs might look similar after all these years, but this snapshot highlights the many changes that have occurred as the practice matures.
Guided by 473 travel decision-makers who responded to an online survey--and supplemented by reams of other industry data-- Procurement.travel's "State Of The Practice" special issue presents both the cold, hard facts about the breadth and depth of managed travel programs, as well as the function's emerging trends.
Need Answers Now
The objective of the study is to better understand who is managing what pertaining to corporate travel, how, and with what resources. How are companies spending the travel dollar? How are they managing meetings? How are they using technology and data? Who is ultimately directing policy and management decisions? How are they managing supplier relationships? What most concerns them in these uncertain times? And what is next on the horizon as the practice of travel management advances into middle age?
For answers to about 60 such questions, Procurement.travelinvited travel decisionmakers at corporations of all sizes and industries to answer an online survey ( see full methodology below). The research targeted only those who said they actively manage travel. Survey responses are intertwined with other insight into the structure of travel management programs; leading practices of policy, payment, traveler support and supplier relationship management; supply chain development; regulatory issues impacting travel; and emerging practices.
Source: Procurement.travelAugust-September 2008 online survey of 473 qualified travel decision-makers |
Who Is Managing Travel?Thirty percent of survey respondents listed their title as travel manager, director, supervisor or vice president, as indicated in the chart below. By industry, manufacturing delivered the highest number of responses at 16 percent; other segments are detailed in a chart below.
At companies with the largest travel and entertainment spend, half of the respondents hold the position of travel manager, director, supervisor or vice president, while about 22 percent are in a procurement position. Only 4 percent of respondents have clerical/support titles, but all such respondents are at companies with less than $15 million of spend. The Structure sectiondetails one of the biggest changes in travel management during the past decade: the increased role of procurement and finance in travel management.
Responsibilities Vary
Titles aren't the only difference between those who manage small, medium, large and extra-large travel budgets. At companies with travel spend of less than $1 million, the CEO, COO or president is far more likely to be involved in travel management, but no title dominated the function. Those in travel roles are six times more likely than their peers at the biggest travel spenders to report to the executive office.
Source: Procurement.travelAugust-September 2008 online survey of 473 qualified travel decision-makers |
Travel decision-makers in the under $1M category were twice as likely to select travel suppliers, create travel policies and develop or implement measures to reduce costs than to determine the return on investment of travel dollars. Respondents at the smallestspend organizations were nearly three times more likely to report that travel spend in 2007 declined or stayed the same than counterparts at the biggest-spending organizations. Managers of the smallest-spend volume were seven times more likely to have travel policies for operations in just one country.
In contrast, the extra-large spenders, with T&E over $60 million, are the most likely--with more than seven of 10 respondents-- to have travel policies that apply to company operations in 10 or more countries. They are the most likely to have taken their travel programs global several years ago. Half of the respondents in this spend grouping report to procurement; one-quarter report to finance. Nearly three-quarters of these respondents said travel supplier negotiations reside in procurement.
Among their peers, travel buyers at companies with medium-size T&E spend of $5 million to $14.9 million typically manage from 250 to 10,000 travelers-most of them frequent. These decision-makers are the most likely of peers from all spend groups to monitor and evaluate travel expenses, create and approve travel policies or develop ways to reduce travel expenses. Travel supplier negotiations reside in procurement for just over half of the respondents with this T&E spend.
Gone Global
Company headquarters for more than eight of 10 respondents' companies are in the United States, 8 percent are in Europe, 5 percent in Canada, 3 percent in Asia-Pacific, 1 percent in the Middle East/Africa and less than 1 percent each in Mexico and Central/South America.
Source: Procurement.travelAugust-September 2008 online survey of 473 qualified travel decision-makers |
The global nature of most of the respondents' businesses, as well as the globalization of their travel programs, is evident in their responses. Two-thirds said their companies had operations in two to 100 countries around the globe. Forty- five percent of respondents said their companies operate in Europe, another 45 percent operate in Asia-Pacific, 36 percent operate in Central or South America, 35 percent in Mexico and 31 percent in the Middle East/Africa.
About one-third of respondents said their companies operated only in one country and 38 percent of respondents said travel policies applied only in one country. But nearly 60 percent of respondents said travel policies applied to operations in multiple countries. Of this multinational group, 36 percent said travel policies applied to operations in two to 10 countries, while 21 percent said they covered operations in 21 or more countries.
However, globalization of travel policies isn't a new phenomenon, according to most respondents. Three of five said their travel policies have applied to operations in more than one country for three or more years, while 28 percent pegged the coverage at one to three years. Only 12 percent said global policies had been implemented in the past 12 months. The structure of multinational travel management programs today is addressed in the Structure - Multinationalsection.
View Of The World
As corporations globalize operations and travel programs, they also must develop the means to consolidate data for a single view of their travel world. According to 45 percent of the chief financial officers surveyed by IBM, it would take an hour to learn how much their enterprise spent on global travel last month. About 25 percent said it would take a day, just over 20 percent said more than a day but less than a week, and about 8 percent said it would take a week or more. About 3 percent responded, "We can't get a snapshot of global travel spend." ( 1) About half of respondents were "fairly confident of the reliability/integrity of that global travel spend figure, 25 percent were "100 percent confident" and the rest were either neutral or less confident.
Source: Procurement.travelAugust-September 2008 online survey of 473 qualified travel decision-makers |
The questions were posed as IBM told "a true story about becoming an IFO," or integrated finance organization. Over dinner sometime in the mid-1990s, the CEOs of a major airline and a
Fortune50 company discussed the possibility of a "favorable travel relationship" between their companies. The airline executive asked how much the company spends annually on air travel. The corporate executive didn't know, so he asked the CFO, who also didn't know. It turned out that "the answer was technically impossible to ascertain" as each country in which the company had operations tracked travel differently and kept data in different systems. "This incident served as a wake-up call to the company. If it couldn't answer this simple expense question, how could they manage all other types of spending or the business at large?" IBM wrote.
Of Most Concern
In our research, "controlling rising costs" was the single greatest concern of surveyed travel buyers, cited by 43 percent, or more than three times more than any other issue. But results also show that buyers continue to worry about executive support of travel programs and objectives, cited by 13 percent of all respondents. Among respondents who manage medium-sized T&E budgets of $5 to $14.9 million, executive support of travel programs was of second-greatest concern after controlling rising costs, according to one of five respondents.
One reason that cost containment is of such concern is the fact that nearly three-quarters of all respondents said their companies' T&E expenditures rose in 2007 from 2006. More than half expected 2008 T&E costs to rise again, and 56 percent expected the line item to grow even further in 2009.
Source: Procurement.travelAugust-September 2008 online survey of 473 qualified travel decision-makers |
In the "State Of The Practice," 85 percent of respondents at extra-large spenders said expenditures increased in 2007 from 2006, and just over half expected line item increases in both 2008 and 2009.
Also among the biggest T&E spenders (with budgets of $60 million or more), mandating compliance to preferred vendors and program objectives, and balancing the need to travel with the cost were the biggest concerns, after controlling costs.
The priority on cost-cutting initiatives also was reflected in an AirPlus International May 2008 survey. ( 2) Reducing the total cost of travel also was cited as a key program objective by 97 percent of respondent travel managers in a BCD Travel April 2008 client poll. ( 3)
Value Of The Practice
Given all the responsibilities in managing travel today, which is most valued by companies? Cost-cutting, as you'll repeatedly read in this special issue. Practitioners like ConocoPhillips' Allen Plumley opine that the function hinges on policy and compliance to it, as you will read in Leading Practices - Policy.
However, another survey respondent noted that supply chain management and the "ability to grasp the state of the industry and the changes that may need to be made to adapt," are most valued.
In its survey of 1,500 travel managers, AirPlus found that 80 percent of respondents considered travel management services to be valued within their companies, but 42 percent said they are given insufficient time to do their jobs.
To further advance the practices of travel management, buyers must "demonstrate the benefits of the managed program," said Lasse Leskinen of BNP Paribas.
Added Karen Beauchamp of Symetra, "Learn to dig deep and use multiple sources to find out travel information and industry changes, and think and plan ahead."
Source: Procurement.travelAugust-September 2008 online survey of 473 qualified travel decision-makers
Between August and September 2008, travel decision-makers were invited to complete an online survey to better understand the practice of travel management within corporations today. A total of 473 "qualified" respondents completed the questionnaire. Unless otherwise noted, all survey results presented in "State Of The Practice" are based on this total.
Qualification was determined by whether the respondent said his/her responsibilities included any of the following: allocate or approve travel budgets, create and/or approve travel policies, develop and/or implement measures to reduce travel expenses, determine return on investment metrics for travel expenditures, monitor and evaluate travel expenditures, select travel suppliers or select travel technology suppliers.
Participants were asked about the structure of their organizations' managed travel and meetings management programs, reporting structure, geographical reach, traveler base, policies, practices and greatest concerns. Respondents also were asked to categorize their organizations' travel and meeting expenditures and explain how their companies track, report on and measure their success.
Independent market research firm Rose Research helped us conduct the quantitative research study. Invitations to participate in the survey were emailed to subscribers of ProMedia.travel and Business Travel Executiveand clients of Carlson Wagonlit Travel.
Follow-up surveys and interviews were conducted through December with some of those who agreed to be contacted by an editor. Industry research conducted by dozens of other organizations also was reviewed to compile this special issue and are fully cited on the Works Cited page.