We’ll Manage

The havoc wrought upon business travel by Covid-19 and the long-term changes to corporate travel priorities engendered by the pandemic are driving many small- and midsize enterprises that previously had unmanaged programs to explore adopting a managed model, experts note. SMEs considering such a transition face a fast-growing marketplace, with travel management companies and other suppliers rolling out new products and services designed to meet the increased demand from a sector that often has foregone managed programs.

That dynamism means SMEs have more flexibility than ever to choose a travel management model tailored to organizational needs. But the bevy of available options also makes the already complex process of building a corporate travel management paradigm that much more complicated—especially as post-pandemic travel strategies and policies remain a work in progress for many SMEs. Meanwhile, travel managers have been given yet another ball to juggle in the form of new demands from SME travelers themselves, the majority of whom are willing to get back on the road in the near term—but only if company policies empower them to do so safely and confidently.  

For companies currently considering a shift to managed travel, the process can seem daunting—but the opportunity is ripe to leverage new offerings to create and implement a tailored management framework that will pay off handsomely in the long run.

Motivations to Manage

Within the context of Covid-19, there are several factors pushing SMEs toward some form of travel management, with the drastically increased emphasis on corporate duty of care responsibilities post-pandemic high on list.

"Covid has moved duty of care to a critical consideration, as travelers truly may incur life or death consequences, so companies now have an HR requirement to not only care for the travelers, but to create goodwill for both their current and prospective employees," noted Will Tate, partner with GoldSpring Consulting.

SMEs "seem to have put more internal focus on their programs," Tate continued—citing specific duty of care-focused measures such as pre-trip approval requirements, policy revisions, as well as enhanced—and ongoing—communication between travelers and arrangers.

Along with the ramped-up onus on SMEs to ensure the health and safety of their travelers post-Covid, the pandemic's still-lingering effects on end-supplier operations and the resultant travel friction also is helping make the case for managed travel in the eyes of many SMEs, others note.

"The economic conditions caused by Covid reduced the level of capabilities of the travel ecosystem that all travelers are forced to deal with now," noted Patrick Linnihan, president and CEO of Gant Travel Management—citing in particular the "chaos" caused by the "unprecedented" level of flight schedule changes and cancelations currently taking place on a regular basis.

"Unless you have a high level of airline travelers with status, [a company] can expect next-to-no help navigating the current conditions of last-minute schedule changes and flight cancelations," Linnihan said. "So if an SME has a high number of infrequent travelers flying right now, choosing more of a managed travel approach for the purposes of productivity and cost control makes sense."

Along with air disruptions, the hotel and ground transportation industries continue recovering from the damaging effects of Covid, making for "a new level of travel hassle that all corporate travelers now have to navigate to ensure their trip goal is accomplished," Linnihan said—citing a surge in demand from Gant's smaller corporate clients for the TMC to assist in dealing with those supply complexities.

"We’re experiencing a new level of engagement, which seems to indicate that SME leadership is attempting to adapt to the conditions in front of them," Linnihan said, noting that Gant accounts of "as little as $25,000 in air spend and $5,000 in unused tickets [are] asking us to apply some of the more sophisticated travel management tools we offer… on a daily basis." 

And as SMEs with unmanaged travel face those supply-side complexities, it's safe to assume many are looking for similar assistance by adopting some form of managed travel—whether a full-scale TMC servicing model or a more narrowly focused, service-specific approach.

U.K.-based TMC Corporate Traveler, which specializes in servicing SME clients, has gone so far as to predict that unmanaged travel could become a thing of the past in the near future for essentially all SMEs due to changing sector needs.

Picking the Path

Once an SME decides to implement some form of managed travel, the next question is what level of "managed" works best for its particular goals. That means it's vital for a company to have a clear picture of what those aims are. They may need to tread lightly or be more innovative about their program strategy and platforms than they were in the past—because SME travelers have some thoughts about their needs, as well, when it comes to post-pandemic travel.

"It’s critical for the organization to determine the outcome they want by implementing any flavor of a managed travel program," said George Kalka, vice president of business travel for Fox World Travel. "A common misconception is managed travel is all about control: controlling traveler decisions; costs; suppliers utilized; et cetera. But an SME may simply want a managed program to provide a better traveler experience and internal awareness, without implementing any control measures," Kalka noted.

Results of a recent SAP Concur survey indicate that lighter touch should be taken seriously. According to the survey, SME employees as a whole overwhelmingly are eager to return to the road. Ninety-five percent responded that they were willing to travel in the ensuing 12 months. However, it also revealed that travelers are prioritizing flexibility and personal control. They are expecting employers to enact policies that empower them choose their own travel options, which may be changing.

More than 91 percent of survey respondents expected to change their typical pre-pandemic travel behavior once back on the road. Specific measures included staying in larger hotels, prioritizing domestic trips and using cars instead of public transportation.

The survey data showed that such flexibility regarding travel was even more of a prerequisite to resuming travel than policies mandating vaccinations and/or negative Covid tests—with flexibility cited by 70 percent of respondents, versus just 55 percent for vaccines and test-related mandates.  

SMEs crafting managed travel policies would be wise to take into account those demands, lest they risk employees rethinking their willingness to travel—and even whether they want to stay with the company; 29 percent of survey respondents said they would try to reduce travel and 22 percent would look for a new position if their desired travel policies were not put into place.

A Question of Resources

But whether a light touch or a heavier hand, once an SME has a clear picture of what it wants to accomplish by managing travel, the next step is to assess the resources it has available in-house to devote to the ongoing oversight of travel versus outsourcing that function to a TMC.

"Internal resources play a factor, especially with a light-touch approach, where the company is going at it on their own by piecing together some technology solutions," said Kalka. "Many SMEs don’t employ a dedicated travel manager, nor is travel expertise a core competency within their organization [so] the ultimate key factor is the organization looking internally and asking themselves if they are ready to make a strategic decision and investment in the active management of this spend category. If the expertise isn’t easily identified internally, a TMC will be an invaluable partner to accomplish their managed travel objectives."

Companies with sufficient manpower and expertise have the option of creating a more bespoke model, with strategy and ongoing oversight driven by a travel manager or other designated leader, while other specific functions, such as online booking, expense management integration, risk monitoring and data analytics, are outsourced to specialist service providers.

For SMEs exploring that "build-it-yourself" route, the available service options are many. Recent years have seen a bevy of specialty providers and tech-based tools come to market offering out-of-the box functionality and easy integration with other systems via application programming interface. The gamut of services on offer has afforded corporate travel departments an unprecedented opportunity to create new models of travel management, such as the program launched in 2019 by professional services firm ZS Associates.

Based upon allowing direct booking with suppliers while leveraging third-party specialists for support, all undergirded by data capture and aggregation from Traxo, the program earned ZS travel operations manager Suzanne Boyan BTN's 2019 Travel Manager of the Year award. And in July 2021, ZS and Traxo rolled out a commercially available version of the platform targeted for use by other corporate users, pitching the service's data capture capabilities as particularly vital post-pandemic.

Indeed, far from stemming the flow of new travel management tools, Covid-19 actually ramped up innovation as providers raced to build new services designed to help travel managers track infection and risk levels in specific locations and handle the deluge of unused air tickets many companies had on hand due to mass flight cancelations. And as travel has returned over the past several months, tools designed to help manage pre-trip approval flows and deliver health and safety-related messaging during the booking process have risen to the fore. 

But while there's no shortage of new products and services available, manpower at many SMEs has been stretched thin by the effects of the pandemic, making efficiency a top priority.

"SME staffing is a challenge for a number of reasons right now and a good number of SME travel managers are doing more than one role at a company," noted Linnihan. "Under these conditions, we’re seeing SMEs ask, 'how do we redesign our program to streamline the work in order to do more with less?'"

Linnihan said Gant is seeing "consistent requests for sophisticated managed travel program tools at lower travel spend rates than we’ve seen before," citing as a prominent example clients utilizing a virtual payment card program designed for travelers who don't have a company credit cards."

An Attractive Segment

As SMEs demand more sophisticated capabilities, even the largest TMCs are making overtures to serve the segment. Among the big names, American Express Global Business Travel has been particularly focused on growing its SME client roster, citing that goal as a key driver of its May 2021 agreement to acquire Egencia, which has a major presence in that segment. In July, Amex GBT announced plans to bringing its SME-focused Neo1 travel booking, expense and purchasing management platform to the U.S., a year after first launching the system in the United Kingdom. Amex GBT's focus on SMEs dates back several years; in 2018, the mega-TMC signed an exclusive agreement with SME-focused travel and expense management provider Lola.

Meanwhile, newer TMC market entrants such as TripActions, TravelPerk and Travel Bank continue to enhance their own offerings by adding new services and partnerships designed to woo SMEs with unmanaged travel by fulfilling specific needs around payments, booking, duty of care and other functions. 

As SMEs return to travel with new post-pandemic priorities, challenges and demands, and enjoying increased attention from providers offering tailored solutions, the value proposition of adopting some form of managed travel to meet those needs is perhaps more compelling than ever, observed Fox's Kalka.

"A key value in managing travel is driving a return on the investment, even if the return is more supported travelers versus cost controls," noted Kalka. "This takes skilled people and resources to evaluate information, educate the organization and evolve the managed travel practice as the environment changes."