Spending on global business travel is on the rise and expected to reach $1.6 trillion by 2020. That’s a 23% increase over last year. In the United States alone, 2017 business travel spending is projected to increase 4.4% over 2016.
Much of this increase will stem from price inflation. And when prices go up and spend goes up, businesses often increase their travel policy constraints to try to curtail costs.
In this year’s Spend Analysis Report, we looked at organizations that transformed their approach to controlling spend. We found that during a period of increasing T&E spend, companies with robust monitoring programs held increases in overall T&E spend to 5%, whereas the average company saw a 14% rise in costs—nearly 3 times the increase.
Diligent monitoring unequivocally produces savings. Even ignoring any compliance benefit or fraud recovery, better monitoring leads to reduced travel costs. By understanding traveler behavior and trends—not just risks—you can spot opportunities to drive costs down and keep your business travelers happy.
Companies that transform their expense process with Artificial Intelligence (AI) technology can identify and correct wasteful business traveler habits. Most business travelers do not have malicious intentions; they just unknowingly spend outside company policy. Habits such as excessive out-of-pocket use, outlier lodging expenses due to seasonality and last-minute bookings can lead to waste of the corporate travel budget.
A common case is an employee that uses his personal card to earn rebates on it, but should be using the corporate card whereby the company would earn the rebates. When you consider that average rebates are 1.5%, this can quickly add up in a large corporate travel program.
Companies that use Oversight Insights On Demand to automate transaction monitoring expensed fewer out-of-pocket items after one year of monitoring. In this year’s Spend Analysis Report, we saw an 8% reduction in this activity. For a customer with $40M in T&E spend, this is a reduction of about $800,000 per year.
Robust monitoring can give your company a view into an area that you might not otherwise see and helps to quantify the cost to your company. This gives you the information you need to decide if actions to correct the behavior or a new travel policy is warranted.
Download the Spend Analysis Report Volume 3 for a look at more trends in T&E programs and the results of companies that have transformed their corporate spend programs with AI.