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Budgeting travel in

the pandemic era

Here’s what CFOs should know when re-evaluating and
adjusting COVID-19-era travel budgets.

By Andrew MacDowall

s the pandemic continues to pandemic uncertainty. New Zealand-based finance departments will have to expand
present challenges for Kirsty Godfrey-Billy, global CFO at Xero, their definition of travel expenses in 2022,
businesses and the workplace said it was reasonable to expect that travel according to Horner.
evolves, there are a number of budgets would decline now that people in “Consider additional costs which may
A reasons to believe that business have a clearer understanding of be required to ensure a safe travel
business travel may never be the same. Not what is possible to achieve virtually. experience, which may include PPE like
only has the switch to remote working and “When the pandemic hit, we all had to masks and shields, COVID-19 testing,
meetings lowered costs for businesses, but find new ways of working and connecting cancellation insurance, supplemental
COVID-19 safety concerns make virtually,” she said. “Many of these habits health insurance, and additional travel days
organisations hesitant to send employees have become ingrained in the way we work, to allow for quarantine away from
back on the road. and we can all learn a lot from this when vulnerable family members,” he said.
However, despite these shifts in the we consider what business travel will be
business travel environment, McKinsey & needed in the future.” Reshape travel policy
Co. estimates that only one-fifth of But that doesn’t mean that business Now is the time for CFOs and their teams to
business travel is likely to cease travel is going away because more people drill down into company goals, strategy,
permanently and expects a rebound in use Zoom. Many business operations still and overall budgeting and ensure that
corporate travel to be driven by companies, require physical presence. travel policies and specific trips are aligned,
led at first by small and medium-size “Sometimes nothing can replace being Horner said.
enterprises, that have a “fear of missing in the same room as others, particularly Simone Buckley, London-based EMEA
out” on opportunities presented by when it comes to relationship building,” marketing vice-president at TripActions, a
face-to-face meetings. said Godfrey-Billy. “Because of this, there travel and spend management platform,
Business travel will take time to recover, will always be some need for business agrees. “It’s critical to look at your travel
and for many organisations it will never travel, particularly in roles where programme and policies with fresh eyes
return to pre-pandemic levels, but it still relationship building is essential — some — for example, identifying crisis plan gaps
needs to be budgeted for. No matter where sales processes, for example.” and conducting a company-wide survey or
your organisation falls on the issue, the On the other hand, travel now can have focus groups to understand your travellers’
gradual return to travel provides finance a much more significant impact on unique needs,” she said. “Create an
departments opportunities to re-examine employees’ nonwork lives as well, exhaustive list of potential issues to
and reshape corporate travel policy. This requiring more time, preparation, and address within your revised policy,
can help reduce costs, increase efficiency, equipment than before the pandemic. With processes, and systems, for use in travel,
and spur innovation while ensuring that the virus still active globally, these changes and expense platform and partner
must-do travel continues. are likely to be here to stay for the selection.”
Here are tips for planning and managing foreseeable future and should be borne in Technology can increasingly be used to
travel budgets in the COVID-19 era. mind by those budgeting for corporate support this decision-making, as well as
trips. travel planning, budgeting, booking, and
Acknowledge things have changed “Ensuring the health and safety of management. Increasingly sophisticated IMAGE BY KLAUS MEINHARDT/IKON IMAGES
The business landscape is markedly employees should be at the forefront of all platforms can help CFOs reduce costs while
different than it was pre-pandemic, and plans and budgets for travel,” said Craig S. optimising the effectiveness of travel, and
finance departments need to carefully Horner, CPA, the CFO at Maryland, calculating when digital meet-ups might be
examine new conditions and expenses US-based benefits and payroll solutions preferable.
when crafting a travel budget in the age of provider Kelly Benefits. That means Anthony Jackson, US airlines sub-sector
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