What’s the best way to set up your travel policies for growth? In this post, we unpack the accommodations category and answer all your burning questions about hotel policy.

One of the most important questions that we try to help our customers answer is, how do you create travel policies to drive growth, save money and keep employees happy?

To understand the best travel policies for growing companies, we looked at the data and spoke with some of the companies using NexTravel to set policies for overnight stays.

Spoiler alert, there’s no one-size-fits-all solution here. But there are plenty of insights and common trends that policymakers can use to create smart policies for their particular industries, travelers and trip types.

Before we dive in, you can find a primer on travel policy fundamentals here if you’re not already familiar.  

On to to answering your hotel policy questions.

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What are the best hotels to book for business travel?

Mid-range hotels seem to be the sweet spot for most companies. Among NexTravel customers, ranging from ten person startups to billion dollar companies, the most frequently booked hotel brands are Courtyard by Marriott, Holiday Inn, Hampton Inn and Marriott.

That doesn’t mean those are the only options you should consider. Boutique hotels are the most popular category overall, and short-term rentals are a very popular accommodation option as well, along with a range of premium and economy hotel bookings.

% Hotel Reservations by Hotel Chain or Type

The question we always suggest companies consider is, in what way will the place employees stay affect their work?

Start by covering the basics: clean rooms, fast wifi, nearby dining options and a good location.

We usually recommend booking hotels close to the job site, rather than booking the cheapest option if that would mean dealing with traffic and wasting time in transit.

Comfort is another key consideration, especially among road warriors who spend a disproportionate amount of time away from home and can easily get burned out.

Our CEO, Wen-Wen Lam experienced this herself earlier in her career, so she instituted a clear “avoid the cheapest option if it will take away from your happiness and ability to perform” policy here at NexTravel. She says that for her, it made a huge difference to be able to stay in the same comfortable hotel each time she was in the same city when she was traveling frequently for work earlier in her career.

Should we allow Airbnb stays?

The short answer here is “probably.”

Airbnb is an increasingly common business travel option, which appeals to travelers who may prefer the experience of staying in a home or apartment to staying in a hotel.

Hotels are still far more popular, but Airbnb has seen tremendous growth in the business travel category. Thanks to a big push by Airbnb to cater to business travelers, the category grew from 250 companies using Airbnb for business travel 2015 to 250,000 companies in 2017.

Must you include Airbnb’s in your travel policy? Of course not. But many employees and businesses do choose it over more traditional options.

If you want to go deeper on this one, this Airbnb report for corporate travel managers on Skift  goes into the details of Airbnb bookings for business.

What’s the deal with prepaid hotels?

Choosing to prepay for hotel bookings enables companies to centralize payments for one of the largest components of their travel spend. That means more rewards, less accounting overhead and more control over spending.

It also eliminates the need for travelers to front payments and submit expenses for accommodations. That can be particularly useful for candidates and consultants, or for any travelers who may not feel comfortable paying for business travel on their personal card.

How do you control costs without being overly strict?

This is one of the things we think about most. In the chart below, we’ve broken down the basic travel policy best practices for keeping costs under control while providing the flexibility and comfort travelers need to perform at their best.

Here are the highlights for the hotels category:

• Always require hotel prepay
• Require approval for all candidate travel and any employee travel 20% over the lowest available price
• Block hotels under 3-star ratings

As a rule of thumb, we always recommend that companies provide a relative price buffer (usually 20% above the lowest priced comparable option) rather than encouraging employees to book the cheapest hotel at all cost.

Ultimately, the cost of a bad travel experience tends to outweigh any difference in price.

What about recruiting?

The best hotel policy to use for recruiting depends partly on the level of the candidate. For high-value executive candidates, you may want to go a step above and hand-select a few hotel options that are sure to please, or block certain hotels, including all those below 4-stars.

For most other candidates, a relative price buffer, similar to your standard employee policy is a good idea.

Tip: Don’t forget about Airbnb as an option for candidates.

Another consideration is logistics. Many companies will limit the location range to within a few miles of the interview site, and specify the date(s) on which to book the hotel.

Payment is an issue that can be more complicated for candidates than employees. For that reason, we always recommend requiring hotel prepay, so you don’t have to deal with awkward money conversations, or chase down receipts for reimbursement.

Still have questions that we missed? Let us know and we’ll dig into it.

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When it comes to controlling travel spend, there’s a sweet spot somewhere between pinching pennies and burning cash that tends to work out well in the long run.

That’s what we encourage companies to aim for when creating travel policies. To help you make the best decisions for your company, we’ve compiled our top travel policy recommendations for companies focused on growth, productivity and employee happiness.

The thing about best practices is they don’t work for everyone, and they don’t always work forever. Still, you probably want to know the secrets to building the best travel policies, right?  

We’ll start with the basics to lay the foundations for a successful policy, then we’ll dig into some other considerations, including how far in advance to book, when and where to set price ceilings, what type of bookings to avoid, and how to stand out in the recruiting process.

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Getting Started

Across the board, we recommend requiring travelers to list a trip purpose, and book all flights and prepay for all hotels on a centralized corporate card.

For companies, this can simplify accounting and provide credit cards rewards and corporate discounts. For travelers it avoids the inconvenience of fronting payment, dealing with expenses and getting reimbursed.

If you don’t already have a policy in place, start by categorizing your travelers into buckets. Most companies will divide travelers into three categories: employees, executives and candidates. Each of these categories comes with its own policy restrictions and approvals requirements.

Let’s start with policy for employees. The goal here is to create moderate controls that enable employees to book the itineraries they prefer, while keeping budgets under control.

For flights, hotels and rental cars, any booking that’s 20% above the lowest available price should require manager approval. For flights, we also suggest hiding basic economy, business class and first class tickets.

The chart below shows the most frequently included travel policy categories among NexTravel customers for employees.

For executives, policies have a role to play even if there are no restrictions on travel spend. We suggest blocking basic economy fares to improve search quality, and for reporting and accounting purposes, requiring a stated trip purpose and payment on the company card.

Tip: To promote a flat organizational structure, consider using the same policy for executives and employees.

For most candidates (as well as consultants and partners) more controls are typically needed. We recommend requiring approval for all candidate travel bookings, regardless of price. For flights, we suggest hiding premium economy, business and first class tickets, and for hotels it’s a good idea to restrict bookings by geography (within a couple miles from your office).

Rental cars are commonly excluded for recruiting visits — among customers we’ve spoken to, it’s common to exclude rental cars and instead reimburse for taxis, Ubers and Lyfts. If you do choose to allow rental cars, keep in mind that there are age restrictions and surcharges for drivers under age 25.

When to Book Flights

Now that we’ve covered the basics, let’s look at ways to save time and money.

One of the most common questions we get asked is how far in advance you should book flights to get the best fares.

On average, NexTravel customers book flights 17.73 days in advance of travel.

If travel plans tend to change frequently, consider booking within a week of the date of travel to avoid change fees.

What to Avoid

If you’re tasked with developing a corporate travel policy, chances are one of your priorities is to save money—as it should be. Rather than saving at all cost, we advocate for smart savings.

That means weighing how an employee’s itinerary will impact their capacity to be successful at the job they’re traveling to do.

Here at NexTravel for example, we have a “don’t choose a long and terrible flight with two layovers” policy, because our team’s productivity and sanity are worth more than whatever we’d save on the price of the flight.

Tip: To support traveler wellbeing and productivity, avoid the following:

• Airlines with poor safety or quality ratings
• Hotels under 3-stars
• Unnecessarily long connections and double layovers
• Hotels with a long commute to the office

It’s usually worth paying a bit more for a clean, comfortable hotel with good wifi, access to restaurants and close proximity to the work site. Consider whether a longer commute to the office is justified by saving 10% on a hotel outside of town—wasted time aside, it may even end up being more expensive when you factor in ground transportation.

Many companies avoid certain airlines with poor safety/quality ratings, and block hotels with less than a 3-star rating. These decisions can ensure that employees don’t wind up with a poor travel experience that could negatively impact their job in the short term and lead to burnout in the long term.

Cost Controls

Controlling costs is about more than getting the best deals on travel. Our recommendation is to take the total travel cost into account when choosing itineraries, including employee productivity and happiness, as well as the cost of the ticket.

Rather than choosing the cheapest itinerary at any cost, we encourage companies to provide some flexibility to travelers. Of course, you want to make sure you’re not blowing your budget unnecessarily, so any “use your judgement, keep it within in reason” policy should be tempered a by clear approvals process.  

That’s where relative price buffers come in: a dollar value or percentage limit above the cheapest available option.

To keep costs under control without implementing excessively strict policies, you can either block all options outside of the price buffer or provide a wider range of options with approval required before booking.

Tip: To cut down on communications overhead and speed up the decision making process, always require travelers to list a reason for booking outside of the price buffer.

Some companies choose to pre-approve in-policy bookings, while others require approval for all bookings. Even if you always require approvals, by providing an allowable price buffer, you can cut down on much of the back-and-forth communications that admins often have to deal with.

High-Value Recruiting

We’ve talked about general recommendations for candidate travel already, but what about those hard to hire executive-level candidates you really want to impress?

To make a strong impression from the start, consider blocking all flight classes below premium economy, and blocking hotels with less than a four-star rating.

Many companies will only show executive candidates a list of hand-picked hotels, so that their experiences are guaranteed to be great.

Unlike executives who are commonly given the freedom to book without restrictions, high level recruits should actively encouraged to book comfortable options to set the tone for a great recruiting trip.

 

Want to know learn how to optimize your corporate travel policy? NexTravel can help you discover ways to save and ensure a positive travel experience for your employees.

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