The Real Question Behind Travel ROI

Charles Petruccelli, President of Global Travel Services at American Express, sees great value in helping companies find their industry-optimized level of travel spend. Where American Express leads, the travel industry often follows. So the quest for finding travel ROI isn’t going away. But is it the right question to answer? If it isn’t, then what is? Here’s my take: [more]

I think American Express and other industry leaders should absolutely want to help companies optimize their travel spend.

As Herve’ Sedky, SVP and GM, Global Business Partnerships at American Express Business Travel, said at the Masters Program last week, “Travel is like cholesterol. There’s good travel and bad travel. We want more of the good and less of the bad.”

That’s what we’re really after, isn’t it? How do you recognize which trips and meetings are going to help grow revenues, cut costs, improve quality or ignite innovation? Yes, the cost of travel needs to factor into the decision, especially given the range of travel alternatives.

But managers aren’t going to worry about calculating any after-the-trip ROI number on their travel spend. What they do want is an easy, credible answer to this before-the-trip question:

“What’s the most effective method for achieving my goal?”

You know what? That’s a worthy question, and it’s ripe for an innovative answer. There’s got to be a market for helping companies make good decisions about how they allocate their spend between travel and travel alternatives. Slashing travel budgets by 40% and stopping all “non-essential” trips and meetings is just too blunt of an axe. No doubt “good” travel gets eliminated, to the detriment of future growth and profits.

We’re already seeing some progress here. I saw these two slides presented by Jeremy Stubbs of Sabre’s GetThere and Waseem Sheik of Cisco at the ISM/NBTA conference in Tampa last month:

The framework says that there are two key dimensions to understanding the appropriate method for collaboration. If you know the complexity of the topic and the emotional context, you should have a good indication of how to communicate. This slide gives more details about what goes into thinking about these two dimensions:

This approach strikes me as much more practical than trying to calculate a trip or meeting’s ROI. It gives you an easy-to-understand framework, doesn’t require any numbers and has good “face value”, meaning it makes sense at first glance. No doubt more can and will be done with this type of an approach. Good stuff.

Back to the issue of travel ROI. There was a very good panel session moderated by Christa Degnan Manning at the Masters Program last week on this specific topic. Between the questions raised in the audience, and Paul Tilstone’s well-crafted counterpoint to my skeptical views on this topic, I’ll lay out a more constructive approach to tackling this topic. If we’re going to answer that question, we might as well do it as best we can. Look for another post on Travel ROI soon.

Scott Gillespie is the author of Gillespie's Guide to Travel Procurement. These thoughts are excerpted with permission from his blog.