10 Essential Steps for Creating a Travel Policy

Travel is a crucial aspect of business but can be costly if not properly managed. To ensure control over travel expenses, it's essential to have a well-designed corporate travel policy in place.

A company travel policy outlines the guidelines and procedures employees must follow when traveling for business purposes, including transportation, accommodation, meal expenses, and more.

Why Companies Need a Travel Policy

A business travel policy serves as a road map for organizations’ travel expenses. By setting clear guidelines and rules, business leaders can avoid misunderstandings, reduce costs, and promote consistency in travel-related decisions. Additionally, a travel policy can help companies comply with tax regulations and other legal requirements while improving duty of care and travel safety.

The compliance gap is real: According to Deloitte's 2024 Corporate Travel Study, 55% of travel managers cite booking compliance as their top cost-control measure — ahead of all other options. Yet the same study cites that only 56% of travelers who know their company has a corporate booking tool say they always use it. That gap represents money that exceeds negotiated rates, travelers invisible to duty of care systems, and receipts that are submitted weeks after the spend actually takes place.

Travel policies help turn travel from an uncontrolled expense into a strategic advantage by supporting:

• Cost control and compliance: When employees understand what they can book before they start searching for flights, they're more likely to make compliance choices without having to make constant approval requests.
• Audit and risk management: Documented policies also create audit trails that reduce fraud risk and demonstrate regulatory compliance while protecting your organization through duty of care requirements.
• Adoption: Travelers ignore policies when the rules feel arbitrary or lack a clear business rationale. Leading organizations balance control with flexibility by automatically approving compliant choices, making the right choice the easy choice.

10 Essential Steps to Creating a Travel Policy

To create a travel policy that works for your business, it should cover booking procedures, expense management, compliance enforcement, and emerging priorities. Each element addresses specific aspects of your travel program, from initial goal-setting through ongoing maintenance.

1. Identify company objectives and employee needs.

Start by identifying what the company needs from a travel policy and what employees need from the travel experience. These two sides shape every rule you'll write.

On the business side, clarify your primary objectives. Is the goal to reduce travel costs? Improve visibility into spending? Meet compliance requirements? Most policies aim for some combination, but knowing which matters most helps you set priorities when trade-offs arise.

On the employee side, consider how different roles travel. A sales team visiting clients weekly has different needs than an operations team traveling quarterly for planning sessions. Frequent travelers need booking flexibility and prioritize loyalty program access; occasional travelers need a process simple enough to remember between trips. Policies that ignore these differences create friction — and friction drives people to book outside the system.

2. Identify who the policy covers.

Clarify who falls under your travel policy, since different groups may need different treatment. Full-time employees typically follow standard guidelines, but what about contractors, candidates interviewing for positions, or board members? Each group requires different treatment based on their relationship to the organization and the business purpose of their travel.

Don't overlook international travelers. Employees who cross borders face visa processing, work authorization, and longer preparation timelines that domestic travelers don't encounter. When identifying who your policy serves, make sure you're accounting for these travelers separately — they need earlier booking windows and clearer documentation requirements than someone flying from Chicago to Dallas.

3. Determine the budget for travel expenses.

Before setting category-specific guidelines, establish the overall budget for travel expenses. This includes airfare, hotel accommodations, ground transportation, meals, and incidentals.

Set clear guidelines for how much employees can spend on each expense category and what's covered under the policy. Consider the mode of transportation allowed (air, rail, car rental, rideshare), the class of travel permitted, and whether rules differ by trip type or employee level. Some companies allow executives to book business class while requiring economy for other employees; others apply the same rules to everyone.

For accommodations, companies should provide guidelines on the types of lodging employees can book, such as hotels or short-term rentals. Guidelines should also cover any preferred providers, the range of room rates, and the use of loyalty programs or discounts.

A travel policy should also provide guidelines on meal and entertainment expenses. Factors to consider include the per diem (or the maximum daily allowance for meals), any restrictions on alcohol or entertainment expenses, and related expenses such as baggage fees, dry cleaning, parking, and other incidental expenses.

4. Define the booking and approval processes.

Define clear, category-specific booking rules so employees know how to stay in policy from the start.

For flights, set:

• Advance booking windows: Require travel to be booked a set number of days in advance (e.g., 7–14 days for domestic, longer for international) to help secure lower fares.
• Cabin class rules by flight duration: For example, economy for short-haul flights and premium or business class only for international flights above a set threshold (commonly 4–5 hours).

For hotels, avoid relying solely on a single flat rate:

• Location- and season-aware rate caps: Recognize that what’s reasonable in one city may be unrealistic in another, especially during busy periods.
• Clear rules for exceptions: Define when travelers may exceed the standard cap (e.g., citywide conferences, last-minute bookings) and how to request approval.

Clarify your approval approach for bookings so it’s easy to follow in practice. For example, you might:

• Approve in-policy bookings at the manager level.
• Require additional review for high-value or clearly out-of-policy reservations.

If your travel platform supports it, you can configure this as a tiered approval workflow that:

• Auto-approves bookings within defined policy limits.
• Flags high-value or out-of-policy bookings for manager or finance review, or requires pre-approval before purchase.

Partnering with a modern corporate travel management company that provides an integrated booking tool can make it easier to apply these rules at the point of sale and keep spend aligned with policy.

5. Define the expense management process.

Create a structured expense framework so employees understand how to spend, submit, and get reimbursed — and finance can control costs without excessive manual review.

Per diem and expense limits:

• Set per diem rates for meals and incidentals by location.
• Clarify what the per diem covers (e.g., all daily meals) and which expenses follow separate rules (such as client entertainment or team events).

Approval thresholds and workflows:

• Define which expenses can be approved by direct managers and which require finance or senior-level sign-off.
• Where your expense tool allows, configure multi-level or automated approvals so routine, in-policy expenses are processed automatically and only exceptions need manual review.

Submission deadlines:

• Establish clear timelines for filing expenses (for example, within 30 days of the end of the trip) to avoid disrupting closed accounting periods and month-end processes.

Receipt requirements:

• Define receipt rules by amount (e.g., no receipts needed under a small threshold) to limit friction while maintaining control.
• Align thresholds with your organization’s audit, tax, and compliance needs.
• Use tools that support mobile receipt capture so employees can photograph and upload receipts directly instead of managing paper.

Payment methods:

• Specify approved payment options and require corporate cards for major travel expenses where possible to improve data quality, simplify reconciliation, and strengthen policy enforcement.

Modern expense management and corporate card solutions can automate much of this process, making it easier for employees to comply and for finance teams to maintain oversight.

6. Address exceptions and edge cases.

Build in flexibility for situations where your standard rules don't apply, since no policy can anticipate every scenario. Last-minute travel, conference group rates, and bleisure travel all require clear guidelines.

Define how your employees should handle these situations and specify spending limits, communication requirements, and escalation procedures specific to emergency scenarios.

7. Establish duty of care and safety protocols.

Organizations need to protect traveling employees through complete duty of care policies, and align duty of care policies with ISO 31030:2021, the international standard for travel risk management. This framework recommends including six key policy components:

• Traveler responsibilities and organizational commitments
• Risk assessment requirements for destinations and individual travelers
• Pre-trip briefing and preparation procedures
• Emergency contact and escalation protocols
• Communication requirements during travel
• Post-trip review processes for incidents

Your policy should document formal corporate travel requirements that outline traveler responsibilities and organizational commitments. Before trips occur, conduct destination and traveler-specific risk assessments that evaluate potential hazards. Thorough pre-trip preparation matters because you'll need to brief travelers and provide resources that help them understand local conditions.

Providing 24/7 emergency support typically requires partnering with a travel management provider. Navan offers in-house support agents available around the clock who have full traveler context during disruptions. Clear communication channels connect traveling employees with support teams, and post-trip review processes capture lessons learned to improve future travel safety.

You should also implement traveler location tracking during trips with appropriate privacy protocols. Navan's live map provides real-time visibility, showing which employees are traveling, their destinations, and flight details.

8. Choose tools that make compliance automatic.

Technology can help you implement and enforce your travel policy. Navan let administrators build expense and travel policies directly into the software, automating approval workflows and enforcing rules at the point of booking and spend.

Because employees see the company’s policy in context — as they search for flights or hotels and submit expenses — they immediately know what’s appropriate, reducing confusion and out-of-policy requests. Finance and travel managers can then update policies on the fly as prices, markets, or business needs change.

Look for travel and expense software that offers:

• Policy controls and customization
• Integrated payment and corporate cards
• Automated reimbursement
• Self-serve booking tools for employees
• Configurable approval workflows and robust reporting

And it should all be delivered through a consumer-like, intuitive UX that employees will actually use.

9. Communicate the travel policy.

Employees should be able to find and understand the policy easily — and ideally, they shouldn’t have to go hunting through static documents to do it.

A 2024 BCD Travel survey found that 95% of travelers know where to find their company's travel policy, and 8 out of 10 have consulted it in the past year. The problem is that static PDFs and intranet pages sit outside the booking experience. Employees have to remember rules and apply them manually, which leads to confusion, mistakes, and “I didn’t know” exceptions.

With a modern solution like Navan, the policy appears in context as employees book, so guidance is built into their workflow. Travelers see which options are in or out of policy on the screen, in real time, rather than cross-referencing a separate document.

You can reinforce this by:

• Creating brief, scenario-based guidance (e.g., “What can I book for a two-day domestic client meeting?” or “How do I handle meals during a multi-day conference?”) for employee training and onboarding.
• Explaining the reasoning behind key rules — such as linking spending limits to budget realities and company financial health — so employees are more likely to respect and follow them.

To reinforce the policy with more traditional communication channels, consider:

• Hosting regular training sessions or webinars for travelers and approvers.
• Sharing concise, scenario-based guides (e.g., “What can I book for a two-day domestic client meeting?”).
• Providing clear, searchable documentation on your intranet.
• Explaining the “why” behind key rules, linking them to budgets, safety, and company goals.

10. Review and update your travel policy regularly.

It's helpful to schedule annual reviews of your travel policy, with quarterly reviews of high-variance areas. Business conditions change, travel patterns evolve, and market pricing fluctuates, so your policies should adapt based on data showing what's working and what's creating friction.

Track compliance metrics to identify problem areas. If certain policy elements show consistent violation patterns, investigate whether the rule makes sense or needs adjustment, since high violation rates often indicate policy design issues rather than employee misconduct.

There's reason for optimism when policies improve. Deloitte's 2025 study found that frequent travelers have become more compliant — 49% now say they always use corporate channels, up from 43% the prior year.

Build an Effective Travel Policy with Navan

Creating a travel policy that employees follow requires both clear guidelines and technology that makes compliance the easy choice. Organizations that combine thoughtful policy design with modern enforcement platforms typically see improved adoption rates and reduced T&E spend.

Navan’s all-in-one platform enforces travel policies at the point of booking — not after money’s been spent. With automatic compliance approval, real-time visibility into spending patterns, 24/7 support, and integrated expense management, organizations gain the control and flexibility needed to make travel policies work.

Get started with Navan and see how it can help turn travel from an uncontrolled expense into a strategic advantage.