As a travel manager, you have access to swathes of employee travel data. Each time an employee travels for business, a huge amount of data is created—from how much the trip cost and how it was booked, to which vendors were used, and how closely the trip complies with your corporate travel policy.
All of this data provides you with the insight you need to track key performance indicators (KPIs) for travel management. Usually, organizations will decide which KPIs for travel management to focus on by ensuring that they align with their travel budgets, overall business travel goals, and travel industry benchmarks.
It’s your job to not only establish and monitor the right travel management KPIs for your organization but also to leverage the results and turn them into actionable insights to help optimize your travel management program.
So, which KPIs for travel management are most important to measure? Below, we’ll cover nine travel management KPIs that are crucial for most organizations.
What types of KPIs for travel management should you be measuring?
Many organizations view measuring travel KPIs primarily as a way to reduce costs or optimize the way they use their travel budget. However, although cost savings are important, there are also other important factors to consider.
Here are four broad types of corporate travel metrics that all organizations should measure:
These metrics are related to how organizations can save money and protect their bottom line. For example, this category covers KPIs that measure policy compliance, overspend outside of booking tools, total spend, and cost savings. Cancellation costs and average spend per vertical (flight costs, hotel costs, etc.) would also fall under this category.
How TravelPerk makes tracking travel spend simple
The only way to truly stay on top of your business travel budget, is with access to real-time reporting. With TravelPerk’s sophisticated reporting tools you can break costs down by employee, team, travel type, average trip cost, recoverable VAT, and more.
Quality metrics cover KPIs that relate to employee satisfaction. For example, KPIs of this type measure traveler satisfaction, traveler engagement with approved booking platforms, and SLA agreement satisfaction by vendors.
Finally, business metrics cover return on investment (ROI) and productivity KPIs. For example, organizations can measure trip success rate, productivity rate, and the impact on travel within departments to gauge how successful their travel program is.
Measuring sustainability metrics is crucial for companies to meet their corporate social responsibility goals. Many regions are frequently releasing new environmental legislation, such as the Corporate Sustainability Reporting Directive (CSRD) in the European Union, and organizations should be tracking sustainability KPIs to stay compliant.
Some examples of sustainability metrics are the amount of CO2 being produced by business travel, how much of this CO2 is offset, which transport types are being used (train travel, air travel, etc.), and whether there are opportunities to make travel more eco-friendly.
9 Top KPIs for travel management
Now that we’ve covered the most important travel management KPI categories, below, we’ll go through nine KPIs that your organization should measure to evaluate the effectiveness of its corporate business travel policy.
1. Booking tool adoption
If your company has invested in a booking tool or a full-service travel management platform, you likely did so with the intention of streamlining processes, ensuring compliance, and, importantly, making savings on corporate travel.
Even though you’re on board with the travel booking solution, how many of your traveling employees are using other booking channels to make travel arrangements? Measuring the percentage of employees who have fully adopted the tool as their primary method of making travel arrangements will help you evaluate how effective the online booking tool is, and the level of ROI you’re getting out of it.
Plus, your booking tool will only show employees approved suppliers that have been included in your corporate travel policy, and are likely to provide you with corporate discounts. To gain better booking visibility, divide the booked and ticketed spend by your total travel spend to discover how well your organization has adopted your booking tool.
2. Use of approved methods of payment
Much like your booking tool, it’s important to get a handle on how compliant your employees are with the forms of payment they’re using.
For example, organizations that provide their employees with a company credit card to cover business travel expenses need to know the levels of non-compliance with their payment policy. A travel and expense policy is meant to help organizations keep occupational fraud at bay, streamline the reimbursement process, and comply with tax office regulations. Plus, having approved payment methods makes it easier to monitor travel spend and identify areas for optimization.
You can measure how well your employees are adhering to your payment policy by dividing your travel-related spend on a company credit card by your total travel spend.
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3. Percentage of bookings made within policy
Does your company have a corporate travel policy in place? Travel policies are key for staying on top of spending, increasing booking efficiency, and keeping travelers safe.
It’s crucial to understand how many people are booking within policy over time. You’ll also want to know the reasons for any policy violations: are managers taking too long to approve business trips, causing them to go up in price? Is the policy too strict? Or are travelers booking their trips too last-minute? By observing trends in the data, you’ll be able to uncover potential flaws in your company’s travel management program.
Create a travel policy that works for your company
Check out our article on the benefits of flexible travel policies
4. Savings from corporate travel discounts
Securing corporate travel discounts is a great way for organizations to keep costs low. While many companies spend time individually negotiating discounts with different vendors, there is a better and easier way to do this. Travel management platforms like TravelPerk often have their own deals with vendors, and offer exclusive discounts on travel services (like airline ticket prices, hotel rooms, and car rentals) to all their customers, so they can take advantage of corporate discounts without having to negotiate their own rates.
To measure the percentage your company has saved by securing corporate rates and discounts through your travel management platform, take the average market rate and subtract the discounted rate, then divide by the average market rate and multiply by 100.
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5. Traveler satisfaction
Knowing how happy your traveling employees are is key to business success. If they aren’t happy with their travel experiences, their unhappiness is likely associated with your corporate travel program and policy. As with other areas of business, when employees are unhappy, retention rates are likely to plummet.
Requiring travelers to take regular satisfaction surveys about their travel experiences will give you insight into how well your travel policies are working. Ask them about their transportation, lodging, expense, and booking experiences to identify areas for improvement.
6. Percentage of changes, rebookings, and cancellations
Where possible, you want to avoid making any changes to bookings since they usually incur steep charges and additional spend.
Take a look at the percentage of rebookings, changes, and cancellations during a specific period. This will give you an idea of whether there are certain times of the month or year when changes to bookings occur, whether they can be attributed to specific departments, and what reasons were given for the changes. From there, you can consider how best to reduce the total amount of changes made to original bookings.
If travelers are making a lot of last-minute changes, consider using a flexible travel booking option like FlexiPerk. FlexiPerk allows TravelPerk customers to book any flight, hotel, car, or train at any rate, and then cancel at any time and receive an 80% refund as credit on the platform. This results in a 40% average savings compared to traditional flexible fares.
7. Percentage of advance bookings
Booking ahead saves organizations money, and generally offers more flexibility and choice with travel arrangements. In general, your employees should be booking travel as far in advance as possible.
Of course, scenarios that call for last-minute bookings can always arise. But, if you take a look at how many days in advance travel arrangements are made on average, you’ll get a picture of whether you need to adjust your travel booking processes and/or policies.
8. Number of travel incident reports
You have a legal obligation to keep your employees safe when they travel. This is known as duty of care. To fulfill your duty of care obligations, you’ll need to have travel risk management policies in place that address risks like political unrest, illness, regional security concerns, and entry requirements.
Take a good look at the total number of incident reports over a specific timeframe to gauge just how safe your employees are when they travel. Plus, be proactive about any extra measures you can put in place to ensure their safety during any future business trip.
9. Carbon footprint
Finally, to meet your sustainability goals, you’ll need a way of measuring your organization’s carbon footprint. This involves understanding how much CO2 is being released into the atmosphere during business travel.
Once you have visibility over your carbon footprint, you can identify opportunities for more sustainable travel. For example, travelers could take trains instead of flying whenever possible, and could also opt for public transportation over private taxis once they’ve arrived at their destination. TravelPerk’s GreenPerk program allows businesses to automatically calculate the carbon footprint of their business travel program, and reach net zero emissions by investing in carbon offsets.
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