Guides

How to Create a Business Travel Policy

In This Article

Whether you’re completely new to implementing a business travel policy, or your
established policy needs an update. This helpful guide will help you write, implement,
and enforce an effective travel policy that will:

  • Guide employees through the travel booking process
  • Answer employee travel questions
  • Help control your travel spend
  • Reduce business travel costs
  • Help ensure Travel Risk Management is covered

Why is a Business Travel Policy Important?

A travel policy should provide guidelines to your employees who need to travel as
part of their job. Without one, employees are left to make their own choices, which
leaves your business open to risk of an over spend and a lack of governance to what
is being booked, as expense claims can often be quite vague.

Defining a travel policy will ensure your employees book travel in the way you want them to, comply to your guidelines on what they are entitled to and what limits are in place, and also help them prepare for their trips to ensure their safety

Which Stakeholders Should be Consulted?

A travel policy needs to be thought through, as many factors can influence the approach you take when defining what rules you wish to impose. Company culture needs to be considered, as this is what will determine how strict our travel policy controls are. A laidback culture tends to allow more flexibility and trust in employees to make the right choices, yet some organisations choose a strict approach to what their employees can or can’t do.

Speak with the different areas of your business that have an opinion about the purpose of the travel policy. Your Finance Director may be focused on controlling travel costs, yet your HR Manager may be more concerned about risk management and keeping your most frequent travellers happy to boost staff retention. Once you understand the business’ objectives, you can create a policy that balances costs with traveller wellbeing, according to your company’s objectives.


Don’t forget to consult your travellers too…


Speaking to travellers will help you understand how business travel impacts on their business and personal lives, which is crucial when deciding what travellers should be entitled to. Consider who your most frequent travellers are, if they travel excessively, should they be entitled to an extra level of comfort to compensate them for the stress of a busy travel schedule?

If your budget can’t stretch to business class or a better rated hotel, consider smaller perks such as lounges at the airport or a chauffeur driven car to make their trip just a little bit more enjoyable. Little gestures like this can go a long way to letting an employee know they’re efforts are appreciated, which makes a big difference to employee satisfaction

What Should it Cover?

The key to writing a travel policy your employees will read is to keep it simple and
short. No one is going to read a 30-page document in full, so keep it succinct and to the point.


As a minimum, we suggest you cover the following:

  • Where should your people book travel
  • How should they pay
  • Is there an approval process?
  • How are expense claims paid back
  • What is included in an overnight stay?
  • Flights, hotels, rail, cars & and ground transport booking guidelines – what
    are they permitted to book?

Where Should your Business Travellers Book?

Your guidelines here will depend on your approach to booking business travel. If you use a travel management company, you’ll want your employees to book all travel through your preferred partner. This way, all bookings can be tracked and reported on, and you’ll know they are enforcing your travel policy on your behalf. But if you don’t use a travel management company you need to consider how you keep track of all the bookings.

Some businesses have some staff members identified as ‘travel bookers’ who book travel on behalf of the business. Travel bookers can keep a log of trips and make sure all trips are in line with the policy. If you’re happy for travellers to book travel or themselves, can they book anywhere they like? How do you know what has been booked?

Make sure there is a process in place so every booking is accounted for and you have a log of bookings so you know where your travellers are when they’re travelling on business. Whether your approach to booking travel is managed or unmanaged, keeping track of travel data will help you review travel spend in the future so you can improve and make changes to your travel policy as your business or employee needs change.

 

Quick Tips

If you use a travel management company include the following in your travel policy:

  • Name and contact details
  • 24-hour emergency
  • phone number
  • URL for online booking tool
  • Escalation contact in the event of an issue
  • Budgets and /or approval procedures


If you manage travel in-house include the following in your policy:

  • Names and contact details for any travel bookers
  • Details of any preferred suppliers
  • What to do in the event of an emergency
  • Process for logging trips booked.
  • How to claim back expenses and receipts

How Should they Pay?

Outline clearly how travel is paid for. Do you have a centralised payment solution or are employees expected to pay for travel out of their own pocket and claim it back via an expenses process?


Typically, businesses will have one of or a combination of the following in place:


Credit account with a travel management company
The traveller doesn’t have to pay anything, the travel management company will
invoice the business on an agreed basis.


Corporate credit cards
Travellers will have their own corporate credit card that they charge all travel
expenses to.


Claim via expenses
Travellers are expected to pay upfront using their own credit card and have to
reclaim the monies paid via the expenses process. Make sure the guidelines are
clear to avoid confusion and consider scenarios where exceptions may occur, such
as payment for a guest traveller or an employee who doesn’t have their own credit card and what is and isn’t included.


Is there an approval process?


If you’re using a travel management company, you may be so confident in their ability to enforce your policy, that you only need to approve specific bookings in exceptional circumstances, and if so, your travel management company will guide the user through whatever process you have in place. Some businesses have a manual process, whereby the travel consultant will seek authorisation from the appropriate person, whilst others will have an automated system that will seek approval from the
correct person automatically.


If you manage travel in-house, you’ll probably have an internal process where
someone in the business approves all trips, or this responsibility may lie with the traveller’s Line Manager. Regardless of how you approve your business travel trips, make sure the process is described clearly within your travel policy, so travellers know that they’re doing the right thing.

Documenting the correct procedure will save time later as travellers understand their
obligations straight away, rather than seeking guidance every time they make a travel booking.


Don’t forget to include links to any forms travellers may have to complete prior to
booking and make sure there is an audit trail of approvals for your records.


How are expenses claimed?
If your business is has employees travelling on business, you’ll no doubt have some form of expenses process in place already.

Within your travel policy, make sure you cover:


The expense reporting process
Do you use expense reporting software? If so, outline which software this is and how users can access it. If you have a manual process in place, include links to the relevant documentation so travellers can quickly find everything they need to claim their expenses.


Supporting documents
What supporting information do you need from your employees to ensure their claim is processed quickly? It’s likely you’ll want to receive a copy of all receipts being
claimed for a long with details of the purpose of the trip.


Timescales
No one wants to risk not getting their money back! To make sure your people put
their expense claims in promptly, outline the timescale by which the claim has to be made, such as, within 30 days of receipt date. Processing claims whilst it’s fresh in the traveller’s mind helps if there are any queries.

Booking Guidelines

The 5 key areas you should cover in your business travel policy are:

  • Flights
  • Hotels
  • Trains
  • Ground transport, such as car hire or taxis
  • Duty of care, such as managing traveller risk

 

If you cover each of these within your travel policy, you’ll have most eventualities covered. What’s important here is that you give simple and clear guidance so the
traveller can easily understand what can and can’t be booked. Try not to leave anything to interpretation as this will help avoid questions later and also reduce the
amount non-compliant bookings.


One size might not fit all…


It’s always been common practice to have a policy for the majority and a different set of guidelines for the most senior employees, but does this traditional approach go far enough? Consider who your most frequent travellers are, and if different employees
should have the same or varying travel guidelines depending on their circumstances.

 

Flights

The most obvious thing to consider when it comes to flights is which class of travel the traveller can book. However, it’s worth bearing in mind that within each class of travel there several different ticket types with wildly different costs usually depending on the flexibility of the ticket conditions. So, asking your employees to always book an economy ticket, doesn’t mean they will be booking the cheapest option.

Here’s an example:


Ticket A – Economy £300 (No refunds, no changes)


Ticket B – Economy £500 (No refunds, changes for a fee)


Ticket C – Economy £700 (Fully refundable)


If your travel policy says the traveller must travel in economy class, the traveller could legitimately book Ticket C, and cost the business £400 more than if they booked Ticket A. Flights Sometimes, a business class ticket can even be cheaper than a more flexible economy option.

Try to build these scenarios into your travel policy so travellers know what’s ok in these situations. Some businesses allow premium economy or business class if the flight is over a certain duration. And some have different rules for different employees-influenced by the seniority of the position or the number of hours spent travelling or frequency of trips over a sustained period of time. For example, consider what optional extras are permitted too, which are common amongst budget airlines, such as, priority boarding, allocated seating on board meals and additional baggage.

In a post Covid-19 world, businesses are changing their air policy to allow business travellers to upgrade from economy to premium, or business to reduce risk and enhance comfort to support traveller welfare. More so, organisations are changing advance purchase policies normally in place to secure lower fares by booking in advance.

 

Hotels

Hotels range massively when it comes to quality standards and price, that’s why it’s important to be clear on what travellers are entitled to. Some organisations specify that travellers can only stay in 3* hotels, but what if the 4* round the corner is the same price?

An effective way to manage hotel policy is to set a maximum price limit, but travellers should still be encouraged to book cheaper rates than this whenever possible. If you have a negotiated rate programme, should these hotels and rates be booked every time or only if it’s the cheapest option? What about budget chains? Are there any that aren’t up to scratch that shouldn’t be booked at all?

Hotels For long stay bookings, it can be more cost effective to book a service department and a
better experience for your traveller too. Consider building this guidance into your policy once booking durations go over a certain number of days.

Don’t forget to outline the incidental expenses that are permitted too such as newspapers, bar bills and laundry charges. Remember the sharing economy… Are you happy for your employees to book through Airbnb or stay with friends when traveling on business?

Use your travel policy to give your travellers guidance on what is acceptable. Post Covid19, Hotel caps which set the amount a traveller can spend on a room night have increased by travel managers to allow travellers a degree of flexibility on room rates considering the pandemic and provide more choice.

 

Rail 

Rail tickets can be confusing for travellers so it’s important your travel policy makes purchasing them as simple as possible. Most businesses will tell their employees to book a standard ticket, but like air travel, the variance in price is vast depending on the ticket’s flexibility.

When travelling by rail, travellers typically like to travel home whenever they are ready, rather than being fixed to a particular train, but this often means they book the most expensive fare. To get around this, it may be wise to tell travellers to buy a flexible ticket for the return part of their journey, but they must buy the cheapest fixed outbound ticket. This means your average ticket prices will likely come down, but travellers aren’t inconvenienced because they already know which train, they’ll get on their outbound journey.

Like air travel, will you allow your traveller to book a business class ticket if it’s the same price or less than the standard class option? If you document these frequently asked questions in your policy from the beginning, it will avoid lots of questions being asked later.

 

Ground Transportation

When giving guidance on hiring a vehicle, consider the following questions:

  • Under which circumstances can an employee hire a car?
  • What standard of car is considered fit for purpose? Economy, Luxury or somewhere in between?
  • How does the employee claim for refuelling?
  • What insurance is required? Is there a company policy already?
  • Are there any preferred suppliers? If so, how should they be booked?
  • Are there any countries when car hire is not permitted due to safety
    reasons, for example?
  • Would an organised transfer work out cheaper?

 

Other ground transport options include taxis, chauffeur-driven cars, airport transfers, public transport, and personal car usage. Be clear in your policy if any forms of ground transport are not advised in locations where it is not considered safe to do so. 

 

Duty of care


Use your travel policy to help ensure your employees’ duty of care when they’re
travelling on business. Work with your HR department to ensure you are supporting
travellers before, during and after travel. Does your employee know what to do in case of emergency out of normal office hours? Outline a main point of contact if travel plans are disrupted.


Communication


How will you keep in touch with your employee and vice versa when they are travelling? If you use a travel management company, this information should be added to every booking automatically from the traveller’s profile. Make sure travellers also provide you with their mobile contact information and ensure they have the correct numbers to call if they need support.


Traveller Tracking


If you use a travel management company, they should be tracking your travellers for you. If you book things in-house make sure you have your own record of travellers’
bookings and that your policy outlines this process clearly.


Emergency Procedure
Do you have a process for travellers to follow in the event of an emergency? It will be wise to document this within your travel policy, so travellers know what to do if they are affected by an incident.


Managing Risk


How can travellers prepare for their trip? Consider the destinations your business
travels to and classify which are ‘high risk’ for your company. Ensure travellers
understand any risks before they travel and what they can do to mitigate their
occurrence.

Other wellbeing topics you may wish to cover include:

  • Changes to travel entitlements in certain circumstances, such as, providing a chauffeur driven car after a long-haul flight as travellers may be too tired to drive safely.
  • Your policy on drinking alcohol whilst away on business.
  • Providing destination guides for so travellers are as prepared as possible when visiting unfamiliar destinations.
  • Checking city safe scores, so that they are aware of any ‘no go’ areas in that location.
  • Lone female travellers, does the hotel had a policy for managing risk in this area?

 

Did you know? During and post Covid19 businesses were/are actively adding out of policy locations, which control the cities an employee can travel to for their trip.

What your Travel Policy can Help Control and Guide Today?

Changing external pressures mean organisation’s need to remain aware of their strategic environment. This helps to ensure a travel policy remains relevant and fit for purpose to align with any internal business objectives too. So, for businesses with a bent-up demand for travel, what is the problem? Recent factors such as rising fuel and energy costs, businesses being more flexible with their travel policies to provide for increased traveller welfare and safety have led to increased spending levels:

Problem – Increased spending levels

  • Rising fuel and energy costs may see flight costs rise as some airlines pass increases through to travellers. Higher demand for flights from passengers also usually drives up fuel prices. (Although hotel pricing has less to do with barrels of crude oil, airline prices could still impact supply and demand for hotels).

 

  • Consolidation – More demand for billing and expense through increased consolidation creates a higher average travel cost above previous company budget. However, organisations can now see the true picture of business trip spending; Ensuring everything is booked through one place which is a good practice to show for full visibility.

 

  • The impact of people booking out of policy can lead to time and costs associated with supporting such travellers in the event of an emergency.

 

  • Future Air Passenger Duty (APD) rises in 2023 for long haul flights over 5,500 miles. This means taxes will rise to £91 for economy and £200 for other classes. Only 5% of passengers will pay more, but those who fly further will pay the most. Domestic UK Flights will be subject to 50% APD cuts in Apr-23.

 

  • Travel safety – recent essential costs for testing in line with the destination requirements created further added costs in turn, organisations are being more fluid with their travel policies to accommodate such changes.

How to Enforce and Monitor Policy Compliance

Once you’ve defined your policy, you need to make sure everyone understands it. A communication from senior management is usually a good way to show employees that the travel policy is being taken seriously, and the Company Intranet is often a good point of reference. If you have an online booking tool, make sure your travel policy controls are built in so it will only let the user book policy compliant trips. Likewise, if you use a travel management company, ask them to enforce it for you. You may want to use incentives to encourage people to really engage with the guidelines or have different departments compete with each other to make the most policy compliant bookings.

If you’re not using one already, consider using a travel management company, and ensure all travel bookings are made through your preferred partner. If they provide you with an online booking tool, they should build your policy parameters into the tool. With your travel management company enforcing your policy on your behalf, your life will be much easier! If you’re not ready for a travel management company, it can be hard to check compliance of travel bookings retrospectively so it may be best to channel all bookings through a small group of staff members who you trust to make the right decisions.

Let your Business Travel Policy Evolve…

A mistake made by many is that they write their travel policy once and then forget
about it. To ensure your travel policy continues to meet your objectives, you need to let it evolve when it needs to. Your travel management company should be able to provide reports on policy compliance and exceptions along with reasons why, but you also need to be open to the opinions of your travellers too.

Managing and reducing business travel costs is of course very important but it’s also important to manage and reduce traveller risk as well as keeping an eye on traveller wellbeing. Balancing all these things can be tricky, but if you take a collaborative approach with the key stakeholders in your business, you should be able to strike the right balance