How to Set a Travel Policy for Your Business
When you started your business, you probably never even thought about a travel policy. There was far more important work to be done and besides, you could just go online and book things quickly whenever you needed. But now the company is growing, and so are travel costs. It’s easy for those costs to get out of control, especially the more people you add to the organization, so it makes good sense to put together a travel policy to keep things in check.
Putting together a travel policy isn’t the same as having someone manage your travel. Large companies generally contract with equally large companies like American Express or Carlson to handle all their travel needs. When employees need to go somewhere, they contact the agency (or the agency’s website) to make bookings. Some smaller companies manage their travel with an agency, but the vast majority just book online themselves. That’s perfectly fine, but it’s probably time to set some ground rules in an actual policy document.
For airfare, you need to start with what kind of travel you do. If it’s mostly domestic, then an all-coach policy might be best. But if you have people who need to fly half way around the world and be ready to function, you’ll probably need to pay for a higher class of service in order to keep them sane. Only you and your employees can figure that out.
Should you stay loyal to one airline? It really depends. If you’re in a fortress hub city (like Charlotte, for example), your options are limited. If you don’t want to fly US Airways, you’re most likely going to have to stop somewhere, and that adds time. It might not be worth it to stray, especially since once your employees qualify for elite status, they get perks like better seating and free bags. But in some cities (like Los Angeles), there are so many different airlines offering flights all over that it might be best to split your travel on several airlines depending upon price. It really requires looking at your expectations on the whole to figure out what’s worth it and what’s not.
When it comes to hotels, there are a few factors to consider. Location is obviously important. Something that’s close to the client is key. If you’re planning on meeting with your clients at your hotel, it might be worth spending more for a nicer place for appearance purposes. Then again, you can always stay at the Ramada and meet elsewhere. In this type of situation, it can be best to simply set a price cap per night and let your employees decide what works best. (Don’t forget to make exceptions for insanely expensive cities like London or New York.)
For car rentals, it’s not location but convenience that matters. Agencies like Hertz have the most locations and treat their elite members well. You can walk straight past the counter and into your car without waiting. Those discount agencies won’t have anything like that, but it then becomes a matter of time versus cost. Is it worth $50 more to speed things up? Probably. How about $1,000? Probably not. You can set a policy that recommends certain agencies but suggests using alternates if the price is right.
Once you start growing, airlines, hotels, and others will be willing to talk discounts. You can then create corporate accounts that will pledge loyalty to a certain company in exchange for lower costs. That’s a tempting proposition, but I’ve often seen that it doesn’t save much money. Whenever you have a travel policy in place, it’s important to analyze the results regularly to make sure that your funds aren’t being wasted.
In the end, the goal is to balance travel costs with employee comfort and effectiveness. A tired employee who sat in coach for 12 hours and then waited in line for an hour to get his car so he could drive to the Motel 6 is not going to be a particularly happy or effective employee. So figure out the right travel pattern for your people and then try to put financial brackets around them to keep costs from spiraling.
Brett Snyder is President and Chief Airline Dork of Cranky Concierge air travel assistance. Snyder previously worked for several airlines, including America West and United, before leaving to create a travel search site for PriceGrabber.com. Snyder did his undergrad at George Washington and earned his MBA from Stanford.