Defining Success: The North Star Metrics for Business Travel Managers

As Business Travel Managers, navigating the complexities of corporate travel is about more than just booking flights or finding the best rates. To truly succeed, it's essential to focus on some North Star Metrics—key measures that drive overall value and efficiency in travel management.

North Star Metrics for Business Travel Managers: Driving Sustainable, Efficient Travel Programs

In today's fast-paced corporate environment, business travel is bouncing back at an unprecedented rate. With this resurgence, travel managers face a two-fold challenge: managing costs while steering their companies toward sustainability goals. But how do you measure the success of your travel program in this evolving landscape? The answer lies in establishing and tracking your North Star Metrics — the guiding KPIs that will keep your program efficient, cost-effective, and sustainable.

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1. Travel’s Place in the Business: Understanding Impact and Engagement

Before diving into specific travel metrics, it’s essential to understand how business travel fits into your company’s overall financial structure and culture. Two key metrics can help illuminate this:

Metric 1: Total Genuine T&E Spend as a Percentage of Turnover

This metric provides a clear picture of how much the company is investing in travel and expenses relative to its total revenue. Tracking this percentage helps you see if your business travel aligns with the broader financial strategy. If your T&E spend is disproportionately high compared to your turnover, you may need to reassess travel policies, optimize supplier relationships, or adopt cost-saving measures.

Metric 2: Executive Opens/Logins for Travel Team Communications (Month/Quarter)

Effective communication between the travel team and executives is critical for the success of your travel program. This metric measures how often senior leaders are engaging with the insights and updates provided by the travel team. Higher engagement shows that leadership is aligned with and supports the travel strategy, while lower rates may signal a disconnect that could hinder program effectiveness.

2. Total Travel Costs: Controlling Hidden Costs and Leakage

Managing total travel costs involves much more than simply negotiating rates and booking flights. A significant part of the challenge for travel managers is identifying and controlling hidden costs and managing leakage within the travel program. Two key metrics to track here are:

Metric 3: Managed Program Leakage

Leakage refers to travel that occurs outside the company’s managed program — trips where employees book directly through external channels, bypassing preferred suppliers and negotiated rates. Monitoring leakage is crucial for keeping travel costs in check. A high level of program leakage can lead to inflated travel costs, reduced compliance, and missed opportunities for leveraging corporate discounts. This metric helps identify areas where employees may be straying from the approved travel process, enabling travel managers to intervene and improve policy adherence.

Metric 4: Non-Core Trip Costs as a Percentage of Total Trip Costs

Non-core trip costs include expenses outside of flights, hotels, and ground transportation — for instance, ancillary fees, last-minute changes, or unplanned trip expenses. By tracking these costs as a percentage of total trip costs, travel managers can identify areas where unnecessary spending is occurring and develop strategies to reduce these non-essential expenses. This helps to optimize travel spend and ensures the focus remains on core travel components.

Metric 4: Non-Core Trip Costs as a Percentage of Total Trip Costs

Non-core trip costs include expenses outside of flights, hotels, and ground transportation — for instance, ancillary fees, last-minute changes, or unplanned trip expenses. By tracking these costs as a percentage of total trip costs, travel managers can identify areas where unnecessary spending is occurring and develop strategies to reduce these non-essential expenses. This helps to optimize travel spend and ensures the focus remains on core travel components.

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3. Sourcing: Optimizing Supplier Relationships and Routes

Sourcing is another key area where travel managers can drive significant savings and improve efficiency. By monitoring how your company is sourcing travel and negotiating with suppliers, you can ensure that your program is cost-effective while meeting traveler needs. There are four essential metrics to consider here:

Metric 5: Top Route/Market Opportunities

Identifying the most frequented travel routes and key markets helps you prioritize where to focus your sourcing efforts. By understanding which routes generate the most business travel, you can work on securing better deals or negotiating more favorable contracts with suppliers in those regions.

Metric 6: Top Routes/Markets: Benchmark Fare vs Actual Rate

This metric compares the benchmark (or average) fare for key routes against the actual rates your company is paying. If you consistently find that the actual rate is higher than the benchmark, it may be time to renegotiate contracts or find new travel providers. Conversely, if your actual rate is lower than the benchmark, you’re already driving value, but it’s important to keep monitoring to maintain those savings.

Metric 7: Top Contracted Supplier Spend (Net Spend & Savings)

Evaluating how much of your budget is being spent with contracted suppliers gives you visibility into your supplier relationships. By tracking net spend and the savings achieved through those contracts, you can determine whether your sourcing strategy is providing the desired value. If savings are below expectations, this might indicate the need for better negotiations or different suppliers.

Metric 8: Top Contracted Supplier Savings

This metric specifically focuses on the amount saved through contracted suppliers. It’s one thing to have favorable contracts in place, but it’s another to ensure those contracts are delivering real savings. Monitoring this ensures that your travel sourcing strategy is aligned with financial goals, and helps highlight opportunities for improving contracts with key suppliers.

3. Policy: Ensuring Compliance for Cost Efficiency and Control

Compliance with corporate travel policies is critical to maintaining control over travel expenses and ensuring consistency across the organization. A well-defined travel policy helps mitigate financial risk, but tracking compliance is just as important. For travel managers, one essential metric in this area is:

Metric 7: Overall Compliance (Full-Compliance vs All Travel)

This metric helps you gauge how well employees are adhering to the company’s travel policy. "Full-compliance" refers to trips that follow all travel policies, including booking through approved channels, adhering to preferred suppliers, and selecting cost-effective options. By comparing the percentage of fully-compliant trips against total travel activity, you can identify gaps where employees are bypassing the policy.

Low compliance rates may indicate that the policy needs to be revised or that employees need further education on the importance of adhering to travel guidelines. It could also mean that approved travel options are not meeting the needs of your travelers, signaling a need to adjust policy or contracts with suppliers.

4. Sustainability: Reducing Travel’s Carbon Footprint

As businesses face increasing pressure to meet sustainability goals, reducing the carbon footprint of corporate travel is a high priority. Data-driven insights can help you track the environmental impact of your travel program and identify ways to minimize it. A critical sustainability metric is:

Metric 8: CO2 Emission by Routes

This metric tracks carbon emissions for each business travel route. By understanding which routes generate the highest levels of CO2, you can work with travel providers to find more sustainable options, such as direct flights, eco-friendly airlines, or alternative modes of transportation. You can also create policies that encourage employees to choose lower-emission travel options where possible.

This data can also be used to set measurable sustainability goals, such as reducing carbon emissions by a certain percentage over a year, and align with broader corporate net-zero objectives.

5. Employee Wellbeing: Ensuring Traveler Safety and Comfort

The wellbeing and safety of your employees should always be a priority when managing a travel program. One key aspect of this is monitoring the risk level of the destinations your employees are traveling to. A crucial metric in this area is:

Metric 9: Trips to High-Risk Destinations

Tracking the number of trips employees take to high-risk destinations ensures that you’re aware of potential safety concerns and can take action to mitigate risks. High-risk destinations might include areas with political instability, health crises, or heightened security concerns. By monitoring this metric, travel managers can work with internal teams to provide the necessary support and resources for employees, such as additional insurance coverage, security briefings, or alternative travel options.

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By tracking these metrics, travel managers will have the data-driven insights they need to continuously optimize their programs, align with company goals, and drive impactful, sustainable results.

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