Why CFOs Are Looking at Business Travel Differently

 

Business travel was for years a cost of doing business. Flights, hotels, meals, transportation and event costs often were lumped into unavoidable business expenses. Now, however, CFOs are taking a far more strategic view of business travel. They enquire as to the purpose of the journey, not its cost.

With companies moving to hybrid work, going global and collaborating digitally, every business trip is being weighed against concrete results. CFOs want to make sure travel supports revenue growth, client relationships, employee performance, or long-term business goals. This change has changed business travel from a standard cost to a strategic investment.

Measuring the ROI

The finance leaders are more thinking ROI. Rather than approving travel just because it has always been part of business operations, they require teams to demonstrate the business impact of every trip.

Sales visits that lead to new contracts, customer meetings that strengthen long-term partnerships, supplier negotiations that reduce costs, and industry conferences that generate qualified business opportunities are all easier to justify when they produce measurable results.

More companies are tracking business results in addition to travel costs, giving finance teams visibility into which travel is providing the most value.

Intentional Travel: Making it a Priority

Virtual meetings have exploded and companies’ outlooks on travel have changed. Routine internal meetings that can be run via video conference increasingly stay online, with travel reserved for cases where face-to-face interaction creates meaningful business advantages.

CFOs want departments to travel with clear objectives, not on traditional timelines. Make every trip count – closing a big deal, visiting a site, launching a new project, building relationships with key clients.

Organisations can enhance the way they budget for travel spend and remove unnecessary costs.

Employee experience or cost control

Managing costs remains a core function of the CFO but today’s finance leaders also understand the importance of the employee experience. The goal of business travel should be to help your employees do their best work—not stress them out and exhaust them.

‘Lots of companies are looking again at their travel policies to find a better balance between cost savings and traveller wellbeing. Great flight schedules, comfortable lodgings, reliable transport and flexible booking options keep employees productive throughout their trips.

Companies are beginning to understand the overall value of a better travel experience, and not just chasing the lowest price all the time.

Making Decisions Based on Data

Technology has changed the way finance teams manage corporate travel. The platforms that are now used to manage travel provide a detailed view of spending patterns, booking behaviour, policy compliance and supplier performance.

CFOs can leverage this data to find opportunities to negotiate better corporate rates, optimise travel policies, reduce wasteful spending and improve the accuracy of their forecasts.

By using data to make decisions, organisations can see which destinations, departments or travel activities are delivering the best business results, and so can allocate budgets in a more strategic way.

Sustainability is integrated in financial planning

Sustainability is an increasing consideration in business travel. As many organisations set environmental, social and governance (ESG) goals, finance leaders need to consider financial and environmental impact.

Companies are looking to combine meetings where possible, to take direct flights where possible, to choose green hotels and encourage longer but fewer trips.

These practices help with sustainability goals and can help with cost effectiveness by avoiding duplicate travel expenses.

Develop Better Business Relationships

While we have made great strides with digital communication, face-to-face meetings are still vital to building trust. The best way to do complex negotiations, strategic planning sessions, client presentations and partnership discussions is face to face.

CFOs are familiar with the efficiencies of virtual meetings but they aren’t always the best tradeoff for every business discussion. Now the focus is on travel spending that develops long-term relationships and business.

Business travel is a great tool to be used strategically to retain customers and work with others to achieve organisational success.

The way forward in business travel

Business travel is more purposeful, data-driven and results-driven. These days CFOs aren't just about cutting travel budgets. Instead they are running financial discipline and growth opportunities, employee productivity, customer engagement and long term value creation.

Organisations that link travel strategies to measurable business objectives are best placed to make every trip matter. Smart planning, technology, sustainability and smart budgeting will help guarantee that business travel continues to provide meaningful returns.

CFOs today are not asking whether employees should travel, but whether each trip aligns with the organization’s broader business strategy. That way of thinking is shaping the future of corporate travel and helping companies make smarter investments in the relationships and opportunities that matter most.