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Value-based Business Travel Management

See our current article on this topic appearing in the
January, 2001, issue of Business Travel Executive magazine.

(travel.pdf)

US corporations spend over $155 billion each year on travel and travel related expenses, roughly $600 million each business day. At any given time, thousands of business travelers are on the road doing company business.

Despite the enormity of the expenditures, there is surprisingly little information available to answer a basic questions -- What is the value of business travel? Companies regularly examine the expected return on capital investments, expenditures for advertising and marketing programs and a host of other business activities and processes. But few if any companies even attempt to determine their return on the huge investment in business travel.

Without an understanding of the value of business travel to the company, strategic management of this important expenditure is impossible. In the absence of a strategic perspective, travel is managed as though it was simply another purchase made by companies. Travel management programs reflect this purchasing orientation. 

This purchasing approach, there is little or no systematic differentiation of trips based on expected outcomes. There is also little systematic consideration of key trip characteristics that are likely to produce those returns. Cost becomes the primary consideration. Value becomes synonymous with lower cost.

The goal of this research initiative by Lehman Associates is to change the paradigm of business travel assessment and management from one focused solely on cost to one focused on the value that business travel brings to a company. As a result of our work, companies will be better able to manage this important strategic asset to maximize returns to the company.

Along the way, we expect to:

  • Fundamentally alter the view of business travel from one of a cost to be controlled, to one of a managed expenditure to be leveraged to provide maximum return to the company.

  • Develop the necessary tools and procedures to enable companies to assess the contribution travel makes to the company by understanding its value contribution in specific business processes.

  • Differentiate business travel by key characteristics such as trip purpose and expected outcomes to enable companies to make strategic decisions about travel expenditures.

  • Encourage greater collaboration between corporate travel managers and travel suppliers where the emphasis is on developing travel services that produce maximum returns to the company at a least cost.

  • Demonstrate managing business travel as a strategic expenditure produces tangible benefits to companies.

If you are interested in participating in this exciting research program, there are opportunities for your company to be involved. Please call or drop us an email.. We are looking for companies to serve as case study sites, and for companies (including travel suppliers) who are interested in joining at either a Full or Associate Participant level. Contact us for further information on these opportunities.