Demystifying Travel Risk: Strategies for Successful Corporate Travel Management
Samantha Shankman
•11 Jul 2023•
The need for corporate travel has grown exponentially in our modern, interconnected world. As businesses cross borders, so do their employees, who often face potential risks such as health and safety concerns, geopolitical instability, logistical issues, and natural disasters. In this complex environment, robust corporate travel programs help keep everyone safe. The repercussions of unmanaged travel risk can be significant, leading to operational disruptions, financial losses, and even reputational damage.
The solution is effective travel risk management (TRM): A comprehensive approach to corporate travel that encompasses detailed travel planning, risk assessment, and crisis management protocols.
Types of Modern Travel Risks
Here are some trends recognized as travel risks over the past few years that a corporate travel manager might consider:
- Health-related risks: The COVID-19 pandemic, which began in late 2019, drastically reshaped the risk profile of global travel. It demonstrated that health-related crises could occur anywhere and significantly disrupt international travel.
- Political instability and civil unrest: Several regions have experienced increasing political instability and civil unrest in recent years. For instance, 2019’s widespread protests and riots in Hong Kong significantly disrupted travel. The U.S. State Department considers other regions like parts of the Middle East or Africa are often considered high risk due to ongoing conflicts or instability.
- Cybersecurity: As more business activities move online, cyber risks are increasing in corporate travel. For instance, in a 2021 study by IBM, the average cost of a data breach for small businesses was $2.98 million. Traveling employees are often more exposed to these risks, such as connecting to unsecured Wi-Fi networks, making cybersecurity a growing concern in corporate travel management.
- Climate change and natural disasters: Climate change is increasing the frequency and severity of natural disasters worldwide, potentially disrupting corporate travel. These can range from forest fires in Australia and the western United States to more potent and frequent hurricanes in the Atlantic.
- Economic considerations: Economic instability, inflation, and fluctuating exchange rates can all pose risks to corporate travel. For instance, inflation and volatile exchange rates could unpredictably increase travel costs, while economic instability could affect the safety and feasibility of travel to specific regions.
Travel Risks and the Duty of Care
Duty of care refers to corporations’ legal and moral obligation to prioritize the safety and well-being of their employees. Corporations can mitigate potential risks by developing a comprehensive corporate travel policy that guides employees’ actions while traveling and the corporation’s response to travel safety incidents.
Travel risk management has taken on increased significance in recent years, particularly in the context of the COVID-19 pandemic. It’s a vital aspect of the duty of care businesses owe to their employees, ensuring their safety whether working in the office or on the road.
Travel risk intelligence is the process of gathering, analyzing, and disseminating information about potential risks and threats related to travel. It requires evolving to keep pace with travel destination rules and restrictions. Today’s organizations prioritize proactive rather than reactive risk management; as a result, they equip travelers with the necessary information and tools and set up systems to tackle potential issues. This proactive approach also involves understanding and addressing travelers’ concerns and providing technological tools and preparations to manage risks and alleviate anxieties.
Because travel risk management is essential to business travel success, it will remain crucial in ensuring that employees feel comfortable and confident about traveling.
The Role of Travel Management in Mitigating Risk
As a core business function, travel management moves beyond simply organizing itineraries and making travel arrangements. It is a systematic approach for managing an organization’s strategic travel process, including negotiations with all vendors and the day-to-day operation of the corporate travel program, as well as traveler safety and security, credit-card management, and travel and expenses data management.
But what exactly does travel management mean in the context of risk mitigation?
In essence, travel management is like the ship’s captain; it steers corporate travel programs through a sea of potential security risks. In addition, it’s crucial for aiding stakeholders who want to prevent and mitigate risks because it oversees the details contributing to safe and secure travel.
The first step in this process is a comprehensive risk assessment, which involves understanding the nature of the destinations, the specific health and safety risks they may present, and any logistical challenges that might arise. For instance, a travel manager might need to consider geopolitical stability, disease prevalence, cultural differences, or weather patterns when planning business travel.
But a travel risk management program goes beyond risk identification. Once a travel manager outlines the potential risks, the next step is to devise strategies to avoid or manage those risks, such as:
- Developing travel policies that steer employees away from high-risk areas
- Arranging for secure transportation in unfamiliar cities
- Ensuring employee access to appropriate healthcare abroad
- Building contingency plans for when things go wrong
Risk management policies create a protective layer around traveling employees by thoroughly evaluating potential risks and implementing strategies. The scope is broad, and managing risk can mean anything from ensuring that employees have the proper vaccinations for a particular destination to setting up real-time SMS and mobile app notifications about changes to threat intelligence in the geopolitical landscape. It also includes processes like managing cybersecurity, ensuring a destination is safe for LGBTQ travelers, and providing pre-trip know-how before employees’ business trips.
Effective travel management underpins business continuity. In an era where global events can rapidly alter the travel landscape, having a robust travel management system helps businesses adapt and respond effectively.
For example, in the face of a sudden lockdown or changes in international travel regulations, a well-managed travel program can help repatriate employees quickly and safely, minimizing disruptions to business operations.
Technology and Travel Risk Management Solutions
The right technology can empower businesses to manage risk, providing real-time information and automated responses to swiftly changing circumstances.
Critical technological features for a robust travel management solution include:
- Risk assessment tools, which assist in identifying and quantifying risk pre-travel. They enable businesses to make informed decisions and establish appropriate mitigation strategies.
- Real-time alerts, which are critical in keeping travelers and decision-makers informed about developments that may affect travel safety, such as changing travel advisories, weather disruptions, or geopolitical events.
- Traveler tracking capabilities, which enable businesses to know the whereabouts of their employees, leading to a swift response if an incident occurs.
Choosing the Right Travel Management Solution
Deciding on the most suitable travel management solution for your company can seem overwhelming, given the many options available. Yet, the key to a successful partnership is finding a solution that aligns well with your organization’s unique needs and risk profile.
Here are some steps to take when selecting a travel management solution:
1. Understand your company’s travel needs and requirements.
An accurate risk profile will help you identify the features you need in a travel management solution. Ask yourself:
- Are you an organization with frequent international travelers, or does your team travel more domestically?
- Do your travel needs vary seasonally?
- What are the typical risks your travelers face?
An accurate risk profile will help you identify the features you need in a travel management solution.
2. Consider your company’s size and growth projections.
A small to mid-size company might have different needs than a large multinational corporation. Your travel management solution should be able to scale with you as your company grows.
3. Prioritize flexibility.
The travel industry is highly dynamic; changes occur frequently and rapidly. The ideal travel management solution should be able to adapt to changes quickly, whether it’s a shift in travel restrictions due to global events or evolving company policies.
4. Evaluate the technology platform and user experience.
Is the platform user-friendly? Can your team easily understand and navigate the software? A seamless user experience will increase your employees’ adoption rates, making travel planning and risk management more effective.
5. Look into the company’s reputation in the industry.
Check their track record, read reviews, and consider contacting current clients for feedback. Trustworthiness and reliability are crucial in a travel management partner.
6. Prioritize customer support.
Customer support and training are integral in effectively utilizing a travel management solution. A company with a dedicated travel assistance team can swiftly assist when issues arise and mitigate potential disruptions. Training, on the other hand, ensures your team is well-equipped to use the platform optimally. Check that your prospective partner offers thorough onboarding and continuous training to keep your team up-to-date with the latest features and improvements.
The best solution is the one that addresses your unique needs most effectively.
FAQs on Travel Risk Management
In the ever-evolving domain of travel risk management, questions abound. This section seeks to clarify some of the most frequently asked questions and offer insights into the process of travel risk assessment, the development of travel risk mitigation plans, the categorization of travel risks, and more.
- What is travel risk management? Travel risk management is a proactive, comprehensive approach to protect your employees and organization from potential risks during business travel. It involves identifying, assessing, and mitigating travel risks, providing protection and support for traveling employees, and ensuring a rapid, effective response to crises.
- Why is travel risk management critical? Travel risk management is essential for several reasons. It helps to ensure the safety and well-being of employees, maintain business continuity, and fulfill your duty of care obligations. Effective travel risk management can also help to protect your organization’s reputation and avoid costly disruptions.
- What are the main types of travel risk? Travel risks can be broadly categorized into health risks (like disease or injury), security information (like crime or terrorist attacks), or logistical risks (like transportation or accommodation issues). Geopolitical issues and natural disasters can also pose dangers for traveling employees.
- How can travel management solutions help mitigate travel risks? Travel management solutions provide a range of tools and features to help manage travel risks. These may include risk assessment tools, real-time alerts about potential threats, and traveler tracking capabilities. Some solutions also provide access to travel assistance services for medical emergencies or security assistance and evacuation.
- What should I look for in a travel management solution? An effective travel management solution should provide comprehensive coverage of all potential travel risks by incorporating features like risk assessment, real-time alerts, traveler tracking, and crisis management support. It should also be user-friendly, scalable to suit your organization’s needs, and backed by reliable customer support.
- When would a company partner with a professional travel risk management company? If your company lacks the resources, expertise, or technology to effectively manage travel risks, partnering with an experienced travel risk management company can help by providing specialized knowledge, access to advanced technology, and comprehensive support services.
- Can technology help in travel risk management? Absolutely. Technology plays a crucial role in modern travel risk management. It can assess and monitor risks in real time, provide alerts about potential threats, track travelers’ locations, facilitate communication, and more. The use of AI and machine learning can further enhance these capabilities.
- How can travel risk management contribute to business continuity? By proactively identifying and managing potential risks, travel risk management helps to prevent disruptions to business operations. An effective travel risk management strategy can also help ensure a rapid, coordinated response in a crisis, minimizing downtime and enabling business continuity.
- What is the role of duty of care in travel risk management? The duty of care is a legal obligation to ensure the safety and well-being of employees. In travel risk management, it means taking all reasonable steps to protect employees from potential risks during business travel and providing support in emergencies.
Charting a Course
Understanding and mitigating travel risks is paramount in the ever-evolving corporate travel landscape. If left unmanaged, risks can result in financial losses, disrupt business operations, tarnish reputations, and jeopardize employee safety. Therefore, taking a proactive stance toward travel risk management is a business imperative — not just a good business practice.
Travel risk management tools go beyond simple logistical coordination. They offer comprehensive risk assessment, real-time alerts, traveler tracking, and other crucial functions. With travel management solutions, businesses can anticipate and mitigate risks and navigate them successfully, which allows for seamless corporate travel experiences, ensures business continuity, and reinforces the duty of care to employees.
The world of corporate travel is full of uncertainties, but with a proactive, strategic approach, you can turn these uncertainties into opportunities for growth and improvement.
Are you ready to start integrating travel risk management into your travel policy? Schedule a demo or get up and running with Navan in only five minutes.