Benefits of a flexible travel policy
Travel managers and finance managers will know how complicated managing a domestic or global business travel program can get. To make sure your travelers stay safe and book cost-effective options within budget, it makes sense to have an organized policy to regulate how they travel.
But if your current business travel policy isn’t working, you may be wondering what exactly is going wrong.
Why do travelers keep booking business trips outside of policy? Maybe they’re unfamiliar with the rules, or perhaps the process isn’t working the way it should? How can you streamline your policy to improve compliance?
If you think your current setup could use some improvements, you may want to think about bringing in a flexible travel policy. By adding some “wiggle room” into the rules, you can make sure travelers get the best deals, and that your policy is adapted to your organization’s needs.
Read on to learn what flexible travel policies are, and how you can make them work for your company.
Strict travel policies vs. flexible travel policies: what’s the difference?
If your company has a strict travel policy, this means that travelers have to stay within fixed parameters when booking travel, no matter what.
For example, there may be a strict maximum budget for domestic or international flights or accommodation bookings, and there may be fixed rules on the types of transportation to use, or expenses that can be reimbursed. There may also be rules on flexible tickets/flexible flights, first-class versus basic economy fares, cancellation policies, or specific airlines to use (United Airlines, Alaska Airlines, Jetblue, Southwest Airlines, American Airlines, Delta Airlines, etc.) In addition, there may be rules about travel insurance or roundtrip tickets. Organizations that need to tightly control costs often opt for a strict travel policy.
On the other hand, a flexible travel policy allows for more autonomy when booking business travel. Travelers can opt for their preferred airlines or hotels, and may have more flexibility on travel costs depending on the season, fare differences on different future travel dates, and other factors.
Why are companies turning to flexible travel policies?
The COVID-19 pandemic made many individuals and companies understand the value of flexibility in travel, since it highlighted how quickly travel industry conditions and travel plans can change due to external events. In general, flexibility allows travelers to “think on their feet” and make the best decision based on current circumstances.
Although inflation in travel prices is stabilizing in Q2 2023 according to TravelPerk data, costs continue to fluctuate over time. Unexpected circumstances can lead to changes in prices and availability that make it difficult or impractical to comply with a fixed travel policy.
For example, if a travel policy only allows travelers to book airline tickets with a specific carrier, that airline may suddenly raise prices or cancel all flights on a certain day, while new flights with a last-minute check-in may still be available on other airlines. Travelers therefore wouldn’t be able to reach their destination on time and within budget without breaking policy.
Still wondering if you’ll benefit from flexible travel policies?
3 key benefits of adopting a flexible travel policy
Empower employees and increase their satisfaction
Flexible policies give employees more freedom to choose the travel options they want. Since individuals might have specific preferences, this allows them to select the hotels, rail tickets, and airfares/flight tickets that best suit them. Autonomy and freedom of choice are important for employee engagement, with nearly 80% of autonomous employees being engaged at work, according to data from Effectory.
Travel policies have a strong effect on employee happiness. In North America, 79% of travelers say their business travel experience impacts their overall job satisfaction, while 83% of European travelers believe this as well.
Enable travelers to choose the best booking options
With flexible travel policies, travelers can choose the best options based on real-time travel data. This is important, because travel prices fluctuate over time, and by season and departure date. For example, a price limit that makes sense in the winter may not make sense in the summer when prices are higher.
Dynamic, automated travel policies adjust themselves to current market conditions, ensuring that travelers book reasonable rates while taking into account fluctuations in pricing.
Create a policy that can be easily improved and refined
If you’re familiar with lean start-up methodology, you may know about the cycle of experimenting and iterating on a product to improve it. The same methodology can be applied to any business problem or process, including travel booking policies.
To create the best travel policy, you’ll want to observe what works and make adjustments over time to improve compliance. It also helps if you have access to past data, so you can understand trends and fluctuations in travel prices.
How TravelPerk makes setting dynamic travel policies easy
TravelPerk is an all-in-one travel technology solution for business travel booking,with a modern software interface and easy-to-use workflow. Companies use it to get the best hotel rates and corporate travel discounts for cost savings, fulfill duty of care obligations, manage sustainability and carbon offsetting, streamline expense management, easily enjoy flexible bookings and cancel or rebook with minimal change fees, and more.
TravelPerk customers can also use the platform to create automated travel policies and workflows. Travelers can make bookings independently, and will easily be able to stay on-budget without any micromanagement, as the policies are built right into the platform while they are booking. This leads to over 90% policy compliance and fewer out-of-policy bookings.
Curious how TravelPerk can improve policy compliance?
Check out our list of five ways we can help travelers stick to company policy
Managers can choose to approve traveler bookings manually or automatically for full peace of mind. Travel managers can define their policy and workflow within the platform, and can update it as often as is necessary. They can even add multiple policies if needed.
Best of all, with TravelPerk, travel policies don’t have to be fixed—they can be dynamic and flexible. With the Dynamic Budgets feature, admins can set up policies that automatically fluctuate along with seasonal costs, different provider rates, and changing service costs.
Managers can set percentage caps on flights and hotels based on the cheapest or median options available. All they have to do is input their desired percentage on the Travel Policy page within the software. If they’ve also set a maximum budget, travelers won’t be able to exceed that—any price above the maximum will be marked as out of policy, even if it’s within the dynamic budget range.