Corporate Travel Management Blogs
How to Measure the ROI of Business Travel: Metrics and Best Practices
Have your business trips opened you up to new lucrative opportunities, or have the compounding expenses and tiresome processes been weighing you down?
Before you answer, take a step back and consider all the costs and time your business burns through as a byproduct of outdated T&E processes, right from when the trip was an idea on the drawing board to long after completion.
An ideal corporate trip must be planned, implemented, and managed to achieve critical business goals with minimal costs to the company. Remember, even though business travel is essential for many industries to expand their reach, establish new relationships, and generate revenue, it can also be a significant cost center with expenses ranging from airfare and lodging to meals and transportation.
It would be best if you planned it well enough to be cost-effective, efficient, and productive from start to end to maximize your ROI. Measuring and understanding your business travel ROI is crucial to ensuring that your trips are indeed a worthwhile investment.
This piece will cover:
- Metrics for Measuring Business Travel ROI
- Best Practices for Measuring Business Travel ROI
- Challenges and Opportunities in Measuring Business Travel ROI
- Quantify business travel ROI with Tripeur
This article will explore the metrics and best practices to measure ROI in business travel to help you understand if the means justified the results. This informative read should help you better understand and enhance your business travel ROI.
Metrics for Measuring Business Travel ROI
Let us look at some critical metrics instrumental in accurately measuring your corporate travel ROI.
1. Cost Per Trip
Cost per trip is a straightforward metric that provides insight into the expenses associated with each business trip. It includes airfare, lodging, meals, transportation, and other miscellaneous costs.
Companies can identify areas to cut expenses and optimize their travel budget by calculating the average cost per trip.
2. Return On Investment
Return on investment (ROI) is the most critical metric for measuring the success of any investment, including business travel. ROI is calculated by dividing the net profit generated by the total cost of the investment.
In the case of business travel, net profit can include new clients or revenue generated as a direct result of the trip. By analyzing ROI, companies can determine if the benefits of business travel outweigh the costs.
3. Cost Savings
Cost savings are another essential metric for measuring the ROI of business travel. It involves analyzing the costs avoided or reduced due to the trip.
For example, a company might save on shipping costs by bringing samples to a meeting instead of shipping them.
By identifying these cost savings, companies can justify the expense of business travel and demonstrate its value.
4. Impact On Revenue And Profits
Finally, measuring the impact of business travel on revenue and profit is an essential metric for determining its ROI. It involves analyzing the revenue generated from new clients or partnerships established during the trip and the long-term impact on the company’s profitability.
Best Practices for Measuring Business Travel ROI
Let us look at some of the best practices to follow when measuring the ROI of your business travel.
1. Establishing Clear Goals And Objectives
Companies must establish clear goals and objectives for each trip to effectively measure the ROI of business travel.
By identifying the desired outcomes before the trip, companies can focus their efforts on achieving them and evaluate the trip’s success based on those outcomes.
For instance, if the travelers fail to achieve several of the trip’s objectives, it could indicate that the trip could have been more productive and the desired ROI was not reached.
2. Tracking And Analyzing Data Consistently
Consistent tracking and analysis of data are critical for measuring the ROI of business travel. Companies must capture and analyze data related to trip expenses, revenue generated, and any cost savings.
By doing so consistently, companies can identify trends and patterns, adjust their travel policies accordingly, and make data-driven decisions.
3. Collaborating With Other Departments And Stakeholders
Collaborating with stakeholders and other departments, such as sales, finance, and marketing, is essential for measuring the ROI of business travel.
By working together, departments can share data and insights, identify areas for improvement, and develop a comprehensive strategy for measuring the ROI of business travel.
4. Using Technology To Streamline Data Collection And Analysis
Finally, using technology to streamline data collection and analysis can help companies measure the ROI of business travel more efficiently.
Tools like Tripeur can automate travel booking, expense tracking, and data analysis, reducing the time and resources required for manual data collection and analysis.
Such a tool can enhance your ability to derive actionable insights from historical travel data. Doing so allows you to curb expenses, streamline budgets, increase compliance, and eliminate fraud.
Challenges and Opportunities in Measuring Business Travel ROI
While measuring the ROI of business travel is essential, it is not without its challenges. Here are a few common challenges that companies may face.
Lack Of Consistent Data
One of the most significant challenges in measuring the ROI of business travel is inconsistent data. Many organizations have different systems for managing different types of travel expenses, making it challenging to aggregate data effectively.
Such disparate systems make it difficult to capture and analyze data consistently across all trips, making it difficult to compare the ROI of different trips and identify areas for improvement.
This is especially true when relying on legacy corporate travel management systems and processes. Most employees despise manual data entry and would do anything to get out of it, including skipping steps or guesstimating transactions.
Such outdated practices will lead to numerous inaccuracies and mistakes with your travel data.
When this happens, the inconsistent and errored data makes it a significant challenge to measure business travel ROI. Instead, use a centralized system for collecting and managing travel data to get a more accurate picture of travel expenses.
This information will be instrumental in assessing the real ROI of your business travel.
Difficulty In Attributing Roi To Specific Trips
Another challenge in measuring business travel ROI is the challenging task of attributing ROI to specific trips. Measuring the ROI of a particular journey requires tracking the expenses and the revenue generated during the trip.
However, it can be challenging to attribute revenue generated during a trip to the trip itself.
For example, if an employee closes a deal during a trip, it can be tough to determine if the deal resulted from the trip or other unrelated factors. Organizations must establish clear metrics for measuring ROI and ensure they can more precisely attribute revenue generated during a trip.
Limited Resources For Tracking And Analysis
Another challenge in measuring business travel ROI is the limited resources for tracking and analysis. Many organizations rely on manual processes for tracking travel expenses and ROI, which can be time-consuming and error-prone.
Additionally, organizations may not have the resources to analyze the data effectively, leading to incomplete or inaccurate analysis. Organizations need to invest in automated systems for tracking and analyzing travel expenses to ensure that they can get an accurate picture of their ROI.
When you don’t have the right set of automated corporate T&E management tools, likely, expenses will not be recorded accurately. It limits your ability to track and analyze your budget utilization. It also taints the integrity of your travel data.
Additionally, a lack of corporate travel management tools can result in weak policy enforcement without internal controls to keep expenses in check. It becomes difficult to accurately understand what happened during the trip or measure its ROI.
In conclusion, measuring business travel ROI can be challenging without an accurate picture of their travel expenses. To do so, you must find the right solution to mitigate the most common T&E challenges.
A simple and effective solution is to invest in a travel management platform like Tripeur that can help organizations manage travel expenses and quantify their business travel ROI. With the right processes and tools, you can make more informed decisions about your travel expenses and maximize the ROI of your business travel.
Quantify Business Travel ROI With Tripeur
Despite the challenges in measuring business travel ROI, there are opportunities for organizations to improve their processes. One such option is to use travel management software like Tripeur.
Tripeur is a cloud-based travel management platform that helps organizations manage their travel expenses more efficiently. With Tripeur, organizations can track and manage their travel expenses in real-time, allowing them to make more informed decisions about their travel expenses.
Tripeur also provides organizations with detailed reports on travel expenses, allowing them to analyze their ROI more effectively. The platform offers several features that help organizations quantify their travel ROI, such as cost per trip and return on investment.
Additionally, Tripeur integrates with other business tools like CRM and accounting software, providing organizations with a holistic view of their expenses and revenue. Contact us to find out more about how you can automate and streamline your expense management systems to maximize your business travel ROI.