It makes sense
to send Sally
to Sydney in
and have her
stay in a five-star hotel and
with a six- or
Why do we manage corporate travel? Sadly, the most common answer is to save money. The
second-most common answer
is to protect and serve travelers.
Not much else comes to most
travel managers’ minds.
So it should be no surprise that
travel managers place such a high
priority on capturing savings. After all, savings are the currency of
finance and procurement. They’re
easy to measure, with clear visibility and accountability—in short,
the mark of a well-run shop.
But using old-school savings
as the main indicator of a travel program’s success is shortsighted. So says groundbreak-ing research sponsored by ARC,
American Express Global Business Travel and my firm, TClara.
We asked over 700 U.S. road
warriors to indicate the type of
travel policy they operate under:
a) emphasizes cost savings over
traveler productivity and conve-
nience; b) emphasizes traveler
productivity and convenience
over cost savings, or c) well bal-
anced. Travelers operating un-
der cost-focused policies:
• Admitted to an average 13 per-
cent lower rate of compliance
with their travel policies.
• Had twice as much evidence of
traveler friction across each of
• Indicated a 15 percent higher
rate of being or nearly being
burned out on travel.
• Were significantly less willing to
travel now and in two years’ time.
• Estimated a scrap rate—trips
that in hindsight weren’t worth
the time or cost—that was 12
percentage points higher.
•Reported trip outcomes that
were 22 percent less effective.
Would any management team
ever design a travel program that
inflicts these bad outcomes on
its road warriors? Of course not.
It makes no sense to focus on
maximizing traditional savings
when it creates such clear and
significant costs to our travelers’
ability to do their jobs.
That’s why it so often makes
sense to send Sally to Sydney in
business class and have her stay
in a five-star hotel and come back
with a six- or seven-figure contract. It’s all about delivering a
positive business outcome. This is
the only reason companies spend
millions of dollars on travel.
So shouldn’t that be the main
goal, the core test, of a well-managed travel program? Does the
travel program do a really good job
of creating positive business outcomes or not? Of course it needs
to be judged in context of the traditional cost; that’s the balancing
act expected of good managers.
New Mission, New KPIs
Once you define your travel pro-
gram’s core mission as enabling
positive business outcomes, then
you have to think about a new set
of metrics for managing this new
mission. In my keynote speech at
The Beat Live conference this fall,
I called for four new key perfor-
mance indicators. You can mea-
sure each practically, and each
passes the test of being relevant
to senior management.
1. Travel Risk Rating—Use an
objective framework to assess the
maturity of the company’s travel
risk management program. Adjust the score to reflect both the
risk level of the key travel markets and the recent levels of traveler friction among road warriors
traveling to these markets.
2. Road Warrior Attrition Rate—
This small group, typically 10
percent to 15 percent of a company’s travelers, is a high-value,
hard-to-replace subset of most
any firm’s workforce. Travel
managers should identify these
folks and have HR track their attrition rate each month.
3. Trip Scrap Rate—Survey road
warriors to see how many trips
they view in hindsight as not
worth the time or cost of travel.
Invest in learning how to reduce
4. Trip Quality—Score the quality of each road warrior’s travel
based on simple, available dimensions: cabin, number of
stops and on-time performance
for each flight and star or tier
rating for each hotel. Combine
across all road warrior trips for
a vital leading indicator of the
other three metrics.
Our industry should manage
the travel category with a broader and more strategic goal: to
enable positive business outcomes. Let’s measure and manage what really matters.
What Travel Managers Should
Focus On & How to Measure It
22 / TRAVEL PROCUREMEN T www.businesstravelnews.com/procurement
BY SCOTT GILLESPIE