Quantifying the value, or, more precisely, the return on investment, of business trips long has been a sort of Holy Grail in corporate travel. Past research efforts, for example, have used econometric data and other factors to propose that every dollar spent on business travel generates a quantifiable dollar amount in revenue, but the findings never gained wide acceptance.
Now Carlson Wagonlit Travel is the latest to join the quest, though from a different perspective. The travel management company between May and October 2014 surveyed 10,000 travelers at seven global companies, and it claims to have identified common characteristics of business trips that are considered unsuccessful. Among the ingredients of the recipe for traveler dissatisfaction are a low number of meetings during the trip and booking only a few days before departure, meaning time to plan the meetings properly is limited. Avoid those characteristics, said CWT, and, in theory, companies should ensure that a higher percentage of trips are productive and therefore travel dollars are more wisely spent–voilà, a higher return on investment.
CWT asked travelers to rate the usefulness of their last trip on an ascending scale of 1 to 5, with 5 being the most useful. Eighty-eight percent of respondents scored their most recent trips as a 4 or 5 (which CWT deemed a success), 9.5 percent rated them as a 3 (which CWT deemed only marginally worthwhile) and the remaining 2.5 percent scored them as 1 or 2, which the TMC considered an unequivocal failure. CWT therefore labeled any trip scored 1 to 3 as unsuccessful.
CWT then matched these figures with the number of meetings held during the trip, and generally found that the more meetings respondents held, the more successful they considered the trip. Nineteen percent of trips that involved only one meeting were unsuccessful, for example, while 14 percent of trips with two meetings were unsuccessful, and 8 percent of trips with six meetings or more were unsuccessful.
The pattern was even more pronounced for total time spent in meetings. No fewer than 28 percent of trips involving total meeting time of one hour or less were unsuccessful, dropping to 17 percent of trips with 2 to 4 hours of total meeting time and 8 percent of those with at least two days of total meeting time. There were similar correlations between trip success and length of stay and how far the trip was booked in advance. Twenty-one percent of trips booked three days in advance were considered unsuccessful, falling steadily to 12 percent of trips booked more than two weeks in advance–a conclusion that strengthens the position of the many travel managers who promote earlier booking for cost-reduction purposes.
One cause for skepticism is whether travelers are reliable judges of whether their trips were successful. As CWT notes in a study accompanying the results, published this week, "the productivity loss generated by travel stress must be considered along with the actual expenses." In other words, perhaps short trips aren't unsuccessful; they're just more stressful for the individual involved.
Interviewed by BTN, CWT Solutions Group director of innovation and big data analytics Catalin Ciobanu acknowledged the point but said the survey also interviewed travel approvers, who on average estimated that 80 percent of trips they had authorized were successful. Ciobanu added that although "approvers don't see the stress for the traveler of trips booked closed to departure," the correlation between trips considered successful by both arrangers and travelers was very high.
Ciobanu said companies can use the findings to weed out unproductive trips. "Thirteen percent of trips do not bring significant value relative to their cost," he said. "If you can learn there are patterns to these trips, you can attempt to affect them, and if you can convert even 3 percent of them into valuable trips, that is a success." By and large, frequent travelers understand how to put together a successful trip, Ciobanu added. He recommended travelers analyze the data of more junior, occasional travelers to see if they can be educated about better planning.
The CWT study also attempts to attach a dollar value to wasted journeys. Assuming an average cost per trip of $1,000, regardless of its "success," duration or any other factors, a 12 percent failure rate means a company "wastes" $600,000 of every $5 million spent. Based on all the criteria of success established in the study, CWT estimates that by making all trips have at least two meetings and more than four hours of combined meeting time, a company with $5 million trip spend could reduce spend on unsuccessful trips by $160,000.
Perhaps as noteworthy as where CWT found a correlation with trip success was where it found no correlation. Variables that apparently made no difference included traveler gender, whether the traveler journeyed alone or with colleagues, how often the traveler visited the destination, or where the traveler was located. Purpose of trip also made little difference. The most common reasons for travel were client/prospect meetings (31 percent), team-related meetings (21 percent) and training and development (13 percent).
CWT said it would follow up next year with research on how effectively business trips align with companies' key performance indicators for their strategic corporate goals.