Business travel has been a very hot topic over the last few years with all kinds of different projections and opinions. But one thing is certain, business travel is not happening at the same velocity as it once was.

In addition to the ongoing travel recovery from Covid, economic and environmental concerns are also catalysts for a reduction in business travel. Companies such as Google are cutting back on corporate travel.

One way in which business travel could bounce back is by reducing its costs. The digitalization of business travel spend management is one such solution, according to a recent study published by our parent company Amadeus.

Digitalization Offers Huge Opportunities

Amadeus commissioned the Centre for Economic and Business Research (CEBR) to model the economic benefits if the travel industry applies the latest in end-to-end digital spend management technology.

According to the study, end-to-end digital spend management delivers economic benefits in two primary areas:

1. Productivity improvements for travelers, managers and finance teams that digital expenses save 147 minutes per expense claim, equating to 188,000 full-time equivalent employees and $20.6B in gross economic value.

2. Direct travel spend efficiencies result in savings of $31.4B or 8.2% of direct travel spend made by large companies. Savings are achieved through reductions in fraud and error, as well as more consistent application of company travel policies.

“Companies are expected to spend over $1 Trillion on business travel globally this year, according to estimates, said Owen Good, Head of Economic Advisory, Centre for Economics and Business Research.

"The ability to better control this investment, by agreeing and enforcing pre-determined trip budgets, is likely to save large companies in our four markets of interest more than 8% in direct travel spend on average.”

Creating a More Efficient Finance Team

To make things more concrete, let's look at how end-to-end digital spend management works. Instead of a business traveler paying and reclaiming expenses, the traveler is provided with a virtual card containing a pre-agreed budget for the trip.

"Massive digital transformation is coming at exactly the right moment to answer the need for more efficient and intelligent business travel that companies can better justify, measure and control.”

This not only makes trips easier and more efficient for business travelers, but also creates a much more effective process for finance teams, specifically in three key areas:

1. Account, audit and reimbursement: with all spend made using virtual cards and running through the company’s own bank, the process of reconciling payments to bookings is automated.

2. Control, budget and forecast: because travelers are provided with a virtual card for a pre-agreed amount, based on the nature of the trip, expenses are controlled in advance.

3. International VAT reclaim: with options to enrich payments data with specific line items from hotel and other receipts, finance teams no longer need to chase down specific information from travelers and providers in order to reclaim international VAT.

By replacing employee payment methods with a virtual card for a pre-agreed budget, CEBR found that end-to-end digital spend management could save corporations $31.4B in annual direct travel spend.

"This study makes a strong economic case for an end-to-end approach to spend management digitalization," said Rudy Daniello, Executive Vice President, Amadeus Cytric Solutions.

"Massive digital transformation is coming at exactly the right moment to answer the need for more efficient and intelligent business travel that companies can better justify, measure and control.”

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