Study Shows Similarities and Differences Between Travel Policies In Europe and North America

The NBTA Foundation, the research arm of the National Business Travel Association, and Egencia(R), the corporate travel arm of Expedia, Inc., today released sample results from its Corporate Travel Policy study in Europe, focusing on proactive policy management and established best practices. The executive summary also draws a comparison, similarities and differences, between North America and Europe.

"Travel policy is the foundation of effective of travel management. Organisations that implement and enforce travel policies can direct travellers toward optimal values in order to maximise return from investments in travel." said Paul Tilstone, Managing Director NBTA Europe. "Employers naturally want to avoid unnecessary premiums, but do not want travellers spending inordinate and unproductive time either making travel reservations or travelling. Striking the right balance between savings, service and safety is the ultimate strategic objective of travel management."

Based on best practices and insights from 383 European travel buyers, the study takes a comprehensive look at policy mandates versus guidelines, consolidation, booking procedures, class of service, advance purchases, pre-trip approval, groups/meetings and emergencies, among other issues - all of which comprise variables that make travel difficult to standardise.

"Our study shows how similarities between the travel policies in North America and Europe are impressive. In the context of the economic downturn, companies all around the world tackle their travel spend to reduce costs: 87% of European respondents and 84% in North America either have recently or are in the process of reviewing their travel policies. Our clients globally address the same issues and use the same saving levers such as pre-tip approvals and advance purchase," said Christophe Peymirat, Vice President of Global Marketing, Egencia.

Enforcing Travel Policy

European organisations do, however, review and update travel policies regularly in response to changes in economic climate.

    - 70% of those that have reviewed polices during the recent economic
      downturn, have restricted their authorisation of business class (vs. 
      67% in North America)
    - 54% allow business class, mainly at larger companies, and mainly for
      longer intercontinental trips, while only 6% authorise business class 
      for flights within Europe.
    - 69% require economy class on some rail trips. 

European organisations have embraced TMC consolidation as the foundation of travel management. 70% require that all travel be booked through a single designated TMC. A key recommendation from the study to help enforcement and realise savings is to consolidate all travel purchases in the company through one or more designated Travel Management Companies.

Travel policy could be considered more seriously by organisations. 51% of respondents either lack written policies or regard them only as guidelines as opposed to mandates or rules (vs. 38% in North America), and 20% said there are few or no consequences for policy violations. 64% report only reprimands for policy violations (same in North America). The study suggests that organisations could dramatically benefit from better enforcement.

Requiring Non-Refundable Tickets

The study found that non-refundable tickets represent a significant opportunity for savings. Nearly a half of companies (52%) require travellers to accept non-refundable tickets when they are available - doing so helps companies save billions.

Other key practices to net travel savings identified by the study include:

    - Improving observance of policy by establishing and enforcing
      well-defined procedures for non-compliance.
    - Leveraging Lowest Logical Fare policies that help travellers identify
      the best value from among many choices available for most flights.
    - Increasing the number of out-of-policy exception reports and
      distributing them more broadly to executives and managers.
    - Incorporating the principles and practices of Strategic Meetings
      Management into their travel policies.
    - Developing and reviewing emergency preparedness and disaster recovery
      plans. 

The complete Corporate Travel Policy: Benchmarking and Insight study is available through:http://www.egencia.com/daily/home/mktg/2010_eu_nbta_policy/default_uk.asp and to NBTA members at: nbtafoundation.org/research

Study Methodology

NBTA Foundation and Egencia retained TRW Travel & Expense Management LLC, a leading consulting firm specializing in travel management, to administer this study. The consultants leveraged several tools to create a comprehensive report, including reviewing published information about travel policy, conducting a series of telephone interviews with Travel Managers in over 20 European countries (of which major ones are France,Germany and the UK) and executing an online survey of travel managers (NBTA Direct Members / Contacts and Egencia Customers) in Europe. Full methodology details available upon request.

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