The Uneven Growth of Business Travel
These midsized companies do not travel as frequently as the largest global corporations, and therefore spend less on business travel in the aggregate. According to a 2023 Booking.com report, businesses employing between 201 and 500 people take an average of 29.1 business trips per year. Companies with 51-200 employees average 23.2 trips, and the smallest businesses only travel 14.3 times per year.
The relationship between business trip frequency and enterprise size suggests that the overall growth in corporate travel volume is primarily fueled by large conglomerates. Yet both small and midsized businesses are traveling more frequently than they did just a few years ago, and in the process incurring significant travel expenses. There’s ROI on those expenses to be sure, but for SMBs that need to be highly cognizant of how they allocate their resources, there’s a mandate to minimize travel expenses in the most responsible way possible. And one often overlooked factor in business travel cost is payments.
How Corporate Travel Payment Methods Impact Overall Cost
When considering total corporate travel costs, most of the scrutiny falls on expenses dedicated to travel suppliers: hotels, airlines and car rental agencies. These are the most visible aspects, and they’re what both travelers and corporate travel managers will target first when trying to contain costs. That’s at least part of the reason why 34% of American business travelers and 32% of their Canadian counterparts say they currently need to be more careful about how they spend their travel budget, and between a quarter and a fifth (US 25%, Canada 20%) indicate their organization is much more reluctant to approve business travel according to the WTP survey.
These concerns resonate globally as well. In a UATP whitepaper based on a survey of corporate travel managers we conducted last year, 60% said their most significant pain point is keeping down travel costs overall. Another 56% said cost savings are the most important part of their approaches to travel payments.
This last figure is notable because it reflects the impact that payments can have on overall business travel expenditures. As the volume of business travel grows, transaction fees and foreign exchange costs inevitably become more significant, and those are directly impacted by a company’s payment strategy. Because of this, having a payments partner that can offer both attractive rates and methodologies to mitigate excessive transaction costs is a key advantage.
Midsized Companies in a Unique Position
While the largest corporations may be less sensitive to these impacts, small and midsized companies can’t afford to ignore payment costs that flow directly to their bottom lines. Midsized businesses are particularly impacted, as they have both the volume of business travel to justify cost savings at the transaction level and the operating margins to see a significant positive gain by optimizing this aspect of their business travel strategy.
Midsized companies are also more likely than smaller businesses to have a corporate travel management department in place and have a more pressing need to make corporate payment methods available to their traveling personnel. They can also benefit from centralized billing and reimbursements, as well as greater visibility into the travel outlays of distributed teams. And while multinational enterprises might have established, well-resourced corporate travel departments or longstanding relationships with large travel management companies (TMCs), midsized companies are more likely to be at the beginning of their journey toward more efficient managed corporate travel payments.
How UATP Corporate Charge Accounts Can Help
Fortunately, there are accessible ways for small and midsized companies to improve their travel payment strategies. Utilizing UATP Corporate Charge Accounts can save on transaction costs, mitigate the impact of high interest rates and provide accounting and reporting advantages to help identify cost outliers and better manage travel budgets. UATP Corporate Charge Accounts achieve this by offering competitive rates, advanced data tools, easy reconciliation, sophisticated fraud detection and prevention and global acceptance. The cost benefits of competitive rates for travel transactions are obvious. Advanced data tools help corporate travel managers more effectively monitor and control travel expenses, while streamlined reconciliation reduces the resource load needed to manage this critical back-end process. Fraud protection helps avoid potential losses, and global acceptance ensures that all of a traveling teams’ transactions are conducted through the optimal, most cost-effective payment method.
In addition to the cost savings, UATP’s real-time payment analytics allow organizations to meet their duty of care obligations more efficiently. As the only corporate charge account on the market that enables Level III data exchange, UATP can provide itinerary-level data on each transaction, improving accuracy and detail regardless of point-of-sale, currency or geography. This is an invaluable advantage for travel managers at midsized companies seeking to implement more streamlined, transparent travel payment processes for their road warriors, and more efficient business travel systems and procedures for their finance departments. By leveraging these capabilities, UATP can help businesses of all sizes keep their corporate travel costs in check while providing unparalleled clarity into the travel experience.
As business travel continues to rebound, services like UATP’s Corporate Charge Accounts will only become more valuable. To learn more about how UATP can help your corporate travel department or to speak with a payment expert, contact us here.