How Data Science Can Make Business Travel Profitable

Data science presents immense opportunities to transform the way businesses operate and help them gain a competitive advantage. But not many have harnessed the power of data like Google or Amazon.

The business travel sector – a US$1.2 trillion industry globally – is an interesting case in point. There’s a lot of data in corporate travel, and this can make it hard to use effectively.

It’s easy to be obsessed with data. But it isn’t about the data itself. It’s about how companies use that information to improve their travel programs to benefit both the company and the traveller.

Data changes how business travel is viewed, experienced and managed. It helps companies understand the impact travel has on their business, and the value it generates.

Measuring the ROI on business travel

Many companies spend hundreds of millions of dollars on business travel every year, with hardly any way to measure return on investment (ROI). Any other department in a company would need to prove ROI for this sort of money, and travel should be no different.

The trouble is that travel data is still viewed in a vacuum. The focus on costs means people look at travel budgets as just the cost of a plane ticket, hotel and taxi.

Which isn’t to disparage cost control – travel and procurement managers are typically very good at managing costs. But you can’t look at the ROI on travel through such a narrow lens. Companies need to start combining traditional travel data (hotel, air and other expenses) with HR, corporate finance and non-traditional data sources.

Business travel should be viewed in the context of operations, revenue streams and human impact – not just cost. And organizations need to understand how business travel helps their corporate strategy.

The first question has to be: why is this person travelling? There are good reasons: to gain or impart knowledge, to close deals, to work on collaborative projects. Everything else can be handled by email, phone, or video conferencing. So is the trip worth it?

By combining travel data with corporate finance and HR data, you can begin to understand the true cost of a business trip versus the revenue it generates.

How business travel impacts productivity and well-being?

Taking a holistic view of data can also benefit a business in other ways.

For a start, you can begin to understand travellers’ productivity. For example, an average business trip is seven hours of travelling with transit. That’s a lot of time. With HR data, this can be converted into salary, which gives you a fairly accurate cost per hour of travel.

When seen in this light, the time spent sitting in the aeroplane can actually cost more than the price of the ticket. If by flying business class you can work for the entire flight, the chances are you’ll get back the cost of the ticket in billable hours.

It brings a whole new way of addressing employee well-being, too. HR can begin to see the impact that travel policies have on employees. They can look into the relationship between business travel and employee illness, productivity or staff turnover. They can then take action – such as giving employees time off after certain business trips.

It also sheds new light on career management. For example, the data shows that for women, business travel increases early in their career, as they gain experience. It then flattens out around the age of 30, about the time they have young children. Interestingly, business trips by women drop dramatically after 55 – when their kids have grown up and gone to college.

One could search for the rationale – HR directors still do. But there’s a real concern that talented and skilled people who used to travel when it was hard for them to juggle their busy professional and personal lives, suddenly stop travelling just when the company could use their experience.

What’s holding us back?

All this seems obvious – and it’s technically feasible. The barrier is cultural. It involves travel managers engaging with divisions across the company to build a complete picture.

It means travel data has to be read differently and opened up to other parties such as HR, sales and finance departments. It’s about bringing together separate interests and creating new KPIs to measure the effectiveness of travel programs.

Once this happens, business travel becomes a strategic topic – and HR directors, CFOs and CEOs join the conversation.

Most importantly, instead of an expense, decision-makers can start looking at business travel as a revenue generator – and get more bang for their buck.

By Andrew Jordan (@speedcheese), Chief Technology Officer, Carlson Wagonlit Travel and Eric Tyree (@DrEricTyree), Chief Data Scientist, Carlson Wagonlit Travel