:max_bytes(150000):strip_icc()/corporate-travel-management-8423577-FINAL-1-9ca54d5ea8c4442fada3f4af55aaab5a.png "A Complete Guide to Corporate Travel Management")
What Is Corporate Travel Management?
Corporate travel management (CTM) is a process that businesses put into place to oversee their employees’ travel and entertainment (T&E) expenses and ensure that they comply with the company’s policies. That can include approving (or rejecting) travel plans, arranging itineraries, purchasing tickets, and auditing expense reports.
A large company might have a separate department dedicated to corporate travel management, while a smaller one may assign the tasks to their human resources and accounting departments. Some might outsource these functions to third-party travel management companies.
Key Takeaways
- Corporate travel management is a business process of controlling travel expenses.
- Some companies outsource this function themselves, while others handle it internally.
- Corporate travel managers set itineraries, book flights, and hotel rooms, and manage other travel-related expenses.
- Today, many companies are concerned about travel expenses and how their business-related travel affects the environment.
Understanding Corporate Travel Management
Companies can choose to exert varying degrees of control over their employees’ travel, from fairly general guidelines on spending limits to very specific, step-by-step procedures, including which travel suppliers to use. Here are some of the matters they may take into consideration.
Itineraries
A business travel itinerary is a summary of a proposed trip, including travel dates and times, flight numbers, hotel bookings, meeting appointments and contact information, and so forth. Corporate travel managers may develop itineraries in collaboration with employees, making sure that each aspect complies with company policies. A written itinerary is also a handy reference for employees to bring with them on their trips.
Transportation
Corporate travel managers will often make transportation arrangements on behalf of employees, much like a travel agent might for someone’s vacation. Because they may control a high volume of business, they can have more leverage in negotiating with suppliers, such as airlines or rental car companies. They may also have special arrangements with certain suppliers, and the company might require its employees to use those suppliers whenever possible.
Even if they don’t have such arrangements in place or much power to negotiate prices, they may have tools at their disposal for searching out deals and discounts that individual employees don’t have. For example, they may have access to an online global distribution system (GDS), such as Amadeus, Sabre, or Travelport, allowing them to compare multiple carriers at the same time.
Accommodations
Similar to transportation providers, corporate travel managers can help arrange hotel bookings, often securing discounts that would be unavailable to employees individually. Hotel prices and availability are also provided on global distribution system (GDS) platforms, saving employees time and effort finding a room to book.
Meetings and Events
For companies planning meetings and other events, corporate travel managers can book venues and assist attendees with their travel arrangements. Some companies may have separate travel management and event planning departments or merge the two into a single department. They can also farm out these functions to third-party companies that specialize in arranging events and have deep experience and contacts in that area.
Costs and Reporting
Because keeping costs under control is a primary reason for implementing a corporate travel management program, setting and enforcing spending policies is one of the managers’ key responsibilities. Employees must generally submit expense reports after travel, which travel managers review.
Keeping accurate records (and receipts where necessary) is also important for tax reporting purposes. Companies can generally deduct employees’ travel expenses if they have a clear business purpose and are “ordinary and necessary” and not “lavish or extravagant.”
In many cases, companies will provide corporate credit cards for employees to use during their travels. Corporate credit cards can make it easier for companies to collect the information they need for reporting purposes, and spare employees the cost and bother of putting travel expenses on their own credit cards and waiting to be reimbursed.
Policy Compliance
Most companies of any size that require travel will have a written travel policy that they expect employees who travel for business to become familiar with. This document will cover matters such as any required approval process before leaving, spending limits, preferred travel suppliers, reimbursable expenses (or not), rules on using a corporate credit card, and how to fill out and submit an expense report at the conclusion of a trip. Written travel policies serve the dual purpose of controlling company costs and saving employees unwelcome surprises over expenses that the company won’t reimburse them for.
Beyond specific travel-related policies, corporate travel can be affected by broader company policies. For example, a 2024 Deloitte study reported, “Forty-six percent [of surveyed companies] say they have a strategy in place to assign travel emission budgets to teams and individuals, up from 30% in 2023. And more companies have integrated into their booking engines information about sustainable aviation fuel and hotel sustainability certifications.”
Travel Support and Assistance
In addition to helping employees with the logistical and financial aspects of travel, corporate travel managers can provide other forms of support, including help in a medical or other emergency. Many large corporate travel departments and third-party companies have support services available 24/7, just in case.
Options for Corporate Travel Management
As mentioned, companies don’t have to take on all (or any) of these responsibilities themselves but can hire another company to handle it for them. While that represents an added cost, a company that specializes in corporate travel is likely to bring greater expertise to the role and may find cost savings that would otherwise go unnoticed.
Companies can also buy travel management software programs that allow employees to book their own travel arrangements and that may link to the company’s accounting software to simplify expense reporting. Such software can also flag and even reject any expenses that don’t comply with company rules.
If they don’t have access to professional GDS platforms, travel managers can also make use of regular consumer booking sites, such as Expedia and TripAdvisor.
Challenges of Corporate Travel Management
While corporate travel management will often benefit a company from a financial perspective, it presents challenges.
For example, because it takes away some of the autonomy that employees may have become accustomed to in planning their own trips, it can cause them to feel mistrusted or micromanaged and make travel seem like more of a burden. In addition, for corporate travel management to be effective, it requires the people who oversee the program to be experts regarding corporate travel finances and policy-making, which may require not only training but also frequent refresher courses to keep up with the rapidly changing travel industry.
Tips for Creating a Corporate Travel Management Policy
A good corporate travel management policy will lay out as specifically as possible the company’s rules for arranging flights and other transportation, booking hotel accommodations, and expensing other reimbursable travel-related costs, such as meals and entertaining. Any caps on costs should be regularly revisited and revised as necessary to keep up with inflation and changes in the marketplace.
The policy should describe a clear process for having travel approved in advance, if that’s required, and submitting expense reports after the trip for timely reimbursement.
Tip
An effective policy will also strive to avoid situations in which lower-level employees feel they are subject to stricter or more penny-pinching rules than higher-ups.
Finally, it’s important that employees be encouraged to read the policy and know the rules. They may also be given the opportunity to provide feedback on ways that the rules can be improved next time the policy is revised.
Budgeting and Reducing Costs for Corporate Travel
In addition to playing a role in monitoring how a company’s money is being spent and looking for ways to cut its costs, corporate travel managers must also be able to forecast travel expenses during budget planning and anticipate price changes in the travel industry.
Today that may involve weighing in on when a virtual meeting can substitute for an in-person one. A 2023 Morgan Stanley survey of 100 global corporate travel managers found that they planned to replace 17% of their corporate travel with virtual meetings for reasons “ranging from cost savings to lower carbon footprints.”
Future of Corporate Travel Management
In 2024, the Global Business Travel Association forecasted business travel spending to increase through 2028. Its 2024 Business Travel Index Report indicated that 61% of global business travelers have and use corporate credit cards, with 59% of them uploading their cards to a mobile wallet, such as Apple Pay or Google Pay.
Artificial intelligence is being integrated into many travel platforms, with chatbots comparing prices and offering suggestions for accommodations, recreation, and eating. The bots even report currency exchange fluctuations to assist with financial reporting accuracy.
Travel managers should identify opportunities to use cost-saving AI technologies in their travel programs, if they are not already using them, because of the tech’s ability to reduce travel expenses and even enforce travel program compliance.
How Do Corporate Travel Agents Get Paid?
Generally, corporate travel agencies are paid in service fees and commissions from airlines.
What Are the 4 Cs of Corporate Travel Management?
The four Cs of corporate travel management are cost, compliance, convenience, and control.
What Does a Corporate Travel Manager Do?
Corporate travel managers are responsible for managing a business’s travel policy. They book hotels, monitor travel expenses, and propose travel program budgets.
The Bottom Line
Corporate travel is expensive, but many companies find its benefits outweigh the costs. Corporate travel management is one way that companies can try to keep those costs under control and get the most value from their travel budgets. While many companies have embraced corporate travel management programs, others still leave most decisions to their employees.
Emerging technology such as artificial intelligence and blockchain are widely being considered for use and implementation in the corporate travel industry, as there are opportunities to use them to reduce expenses and enhance corporate travel programs.
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