Corporate Travel Management departments handle all travel arrangements for employees, including contracts with travel partners. Policies are formulated with HR and finance, and budgets are set. Discounts are given for group bookings, and employees are reimbursed for expenses. When expenses exceed the budget, changes must be made.
A company’s Corporate Travel Management (CTM) department handles all aspects of travel arrangements for the company’s employees. Contracts with travel partners, such as hotel chains, are arranged by the corporate travel management group, and employees must arrange business travel through the travel management department. Large companies have corporate travel management departments, while smaller companies tend to hire travel agents to provide some services of the same type.
Corporate travel policies are typically formulated by the travel management group in conjunction with the human resources and finance departments. Large companies have an annual budget for travel expenses, and the corporate travel team must ensure that the total cost of employee travel does not exceed the annual budget. Some travel groups assign a travel budget to each division of the company, and department heads are responsible for overseeing their employees’ travel arrangements.
A corporate travel management group typically establishes ties with companies that can provide transportation and lodging for employees during business travel. Large companies contract with several hotel chains to ensure that employees can find partner hotels to stay in regardless of where they have to travel for work. Businesses typically receive a significant discount for group bookings and receive discounted rates for agreeing to work with particular hotel chains and airlines. These discounts are dependent on the corporate travel group agreeing to conduct a certain amount of business with each partner company. Hotels and airlines may suspend discounts if companies book less frequently than originally agreed.
Employees required to travel overnight are typically reimbursed for meals, laundry and dry cleaning expenses. The corporate management group conducts research to determine the cost of meals and other services in various geographic areas and uses this information to establish daily spending limits for employees. Companies reimburse only expenses that do not exceed the limit, although employees are free to spend beyond the daily limit if they use their own funds. Some corporate travel management groups provide employees with corporate credit cards, which allow employees to charge expenses directly to the company rather than submitting reimbursement requests.
When annual expenses exceed the stated budget, the corporate travel management group is responsible for ensuring that company employees change or cancel travel plans for the remainder of the year. Many companies require employees to conduct meetings via conference calls in order to reduce costs. Travel budgets are reviewed annually and may be increased to accommodate rising prices, but most companies view travel expenses as controllable expenses and tend to keep travel budgets to a minimum.
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