Business traveller: Policy matters

A well-defined corporate travel policy can help maximize rewards and minimize costs of travel

Lyle Truden

When it comes time to start travelling to grow your business, it’s important to come up with a proper travel policy. Every company that regularly travels should have a document that all staff members follow. This will help control costs, maximize trip productivity and make sure all employees understand what is expected of them.

It’s important to work out the yearly budget for travel. If you know the trips that are likely to happen, a dedicated business travel manager can forecast travel costs for the year. Which meetings can happen via call or video conference, and which require in-person attention? Are there any conferences, trade shows or sales events that a group of employees will have to attend? What is the plan if something happens and someone is required to stay longer? Forecasting the plan for a year will prevent cost overruns and make sure that each trip planned has the return on investment you are looking for.

The cost of a ticket can change drastically. Airfare is based on availability; the more people booked on a flight already, the higher the cost for any new tickets. Many airlines have advance purchase dates, where lower fares are no longer available within 14 or seven days regardless of availability. The cost for basic economy class with no baggage, no miles accrued, no carry-on and no seat selection can be much lower than for economy, premium economy or business class. For these reasons, a policy of booking and confirming appointments early can save a company a lot of money.

Booking too early can add cost as well. Changes to a flight plan can cost hundreds in change penalties, plus the difference in fare to current prices. A travel policy should clearly lay out who can travel, what the purpose of the travel is, what class of service they can travel in and a time frame within which things should be confirmed. Many business travel managers can provide an exception report. This means they will record the price booked on the invoice but also show how that price differs from normal prices, and they can even code why that price was selected.

Hotel and car reservations can be either prepaid or paid at checkout. Many prepaid rates can be lower but not allow changes or cancellations. These can be booked for meetings that are a sure thing. If meetings may change or be cancelled, it is much better to go with more flexible rates. If employees book “pay on checkout” services, will they have an expense card or what is the expense policy? Collecting receipts and having a per diem assigned for meals and extra expenses will control costs.

Some hotels charge for parking or Wi-Fi, so these costs need to be factored in. If employees travel a lot, it can be extremely beneficial to set up corporate rates with one or two specific larger hotel chains to benefit from rewards programs and reduced rates. A dedicated travel manager should have access to corporate rate discounts for companies that don’t travel enough to get them, and can also negotiate better ones on your behalf should your travel meet a certain annual spend.

While it’s important to ensure that employees are protected for medical coverage when travelling, they should also have cancellation and interruption insurance, baggage protection and even car rental insurance if required. When the volcano went off in Iceland, I had 14 passengers stuck for an extra week in Europe. The cost for food and hotel for the extra nights was paid for by insurance. I got them home five days before the airline they were booked on could, and the insurance paid the nearly $2,400-per-person fees for the new ticket. A great policy will even provide coverage for business meetings cancelled by a third party. This way the tickets can be refunded rather than kept as a credit. Many providers have annual policies for fairly reasonable rates that can cover frequent travellers for every trip they take within a year.

Finally, it’s important to let your dedicated travel manager know who the decision-makers (who can change travel policy) are within the company, who the people allowed to book travel themselves are, and who to go to for approval for the others. If the cheapest ticket is $700 but the ticket with the best travel times is $800, is that OK to book? It’s important to set a range of flexibility so travellers can book the times that allow them to arrive refreshed, but also establish a check-in place if the flight they want is drastically more than the best pricing.

Working with your travel manager to develop a complete policy for your company will help you maximize the rewards that can come from travel, while minimizing unnecessary costs.


Lyle Truden is general manager at Flight Centre Howe Street in Vancouver. He has been working in the travel industry for 15 years and has visited more than 30 countries.