How to Create Travel Policies for Growth

Posted by NexTravel on 6/4/18 5:00 PM

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.

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.


Travel Policy Guide

  Employee Executive Candidates
Require Hotel Prepay Always Always Always
Require Payments on Corporate Card Always Always Always
Require Travel Approval For bookings 20% over lowest price option Never Always
Require Trip Purpose  Always Always n/a
Hide Flight Class Basic Economy, Business Class, First Class Basic Economy Basic Economy, Business Class, First Class


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.

Employee Travel Policies


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.)


Candidate Travel PoliciesFor 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.


To support traveler well-being 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 learn how other companies are using NexTravel to optimize their business travels? No problem, just schedule a demo.




Topics: Insider

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