The final days of August are not only a sign that the Summer is coming to an end, but they are also the gateway to the upcoming corporate events season. Although entrenching business travel into job descriptions and company culture reaps benefits regarding morale and productivity, the costs associated with travel have gone up significantly, too. As leaders evaluate the worthiness of events, the strategies around travel policies are taking rising costs into consideration.
If travel and expense (T&E) policies have remained stagnant despite the current market conditions, a revamp may be necessary. According to new data from Mastercard's global business travel survey, 89% of the 541 travel decision-makers surveyed said dynamic T&E policies are needed to navigate the future of business travel.
Rising Complexities of T&E
Over six in 10 survey respondents said real-time travel visibility for both travel and the organization is challenging because of how T&E protocols work. A third (33%) of organizations say they still require employees to use their personal cards to book travel, which limits the ability to monitor and track those expenses in real-time.
Over nine in 10 (91%) say technology that provides real-time alerts to track budgeting and unnecessary expenses on business will either be commonplace or a differentiator within five years. A nearly identical amount (89%) says the organizational ability to track spending in real-time will be commonplace or a differentiator in the same timeframe.
Outside of the logistics of how travel is paid for, the decision-making process on who goes where and when is also very murky, data shows. When asked about who makes the final call on travel, business leaders were torn. Less than half said managers with procurement teams and expense card management teams (47% and 44%, respectively) call the shots, while just over a third say C-suite leaders, human resources, and finance teams oversee those decisions (39%, 37%, and 35%, respectively).
AI Investments in T&E Increasing
T&E protocols are starving for innovation, and companies are turning to the trendiest technology, AI, for answers. Ninety-one percent of respondents said they are planning on investing in AI products and machine learning to provide employees with a more personalized and cost-efficient travel experience. Over the next five years, companies are hoping to use technology to implement spending limits (48%), spend management and cost controlling (48%), personalized travel experiences for each individual employee (46%), and use tracking metrics for ESG data regarding travel.
Cutting Travel Can Hurt Morale, Hinder Revenue Growth
Business travel is viewed by leaders as an investment in potential revenue growth opportunities. According to the data from Mastercard, 62% of respondents said business travel is a bedrock of growth, with the top benefit being building new client relationships and prospecting. As travel can also put teams in a position to develop a coordinated plan to be executed in person — a rarity nowadays — the teamwork that goes into a properly planned business trip can also promote internal communication boosts, survey results show.
Sixty-one percent said travel benefits also help strengthen their corporate strategy and planning abilities, alongside 60% who say travel helps build internal connections through team bonding.
If cuts were to be made to business travel, rather than improving T&E protocols, leadership expects to see negative results in multiple areas. Nearly half (48%) said they would see their turnover numbers rise 10% over three years if their employee’s ability to travel was halted. Just over four in 10 (43%) also said their organizational revenue would fall by more than 10% in the next three years if they limit their team’s ability to travel.