The case for flying business class when travelling for work

Corporate travel departments are getting less stingy with travel perks for employees who travel constantly — at least for now.

“If you fly once a month, you’re flying coach. If you fly every week, you should be in business class,” says Ariel Cohen, TripActions CEO and co-founder. Picture: istock

Imagine a corporate policy where the C-suite executive who flies only a couple of times a year rides in coach and the sales and engineering road warriors get the first-class and business-class tickets.

Some companies are starting to make changes in that direction to reduce what’s known as traveller friction — the burnout that saps productivity and leads to low morale and job turnover.

This is an old point of tension in corporate travel departments. But it’s gotten worse as airlines have made coach more bruising and frequent travellers have been asked to do more and more at the expense of sleep, home life and job satisfaction. It’s become a hot topic in the corporate travel world because companies now have the technology and the money to fix this problem.

“Many companies are experimenting,” says Rob Greyber, president of Egencia, Expedia’s corporate travel unit.

In the long run, for many industries where talented labour is in high demand, easing travel friction can save money. Losing employees and recruiting and training replacements can be far more expensive. And company travel policies have become a competitive benefit for workers. Prospective hires often now want to see travel plans along with compensation, health and retirement benefits.

Corporate travel policies historically have given the best perks to the highest earners. Those with higher rank get the private jets, first or business class, car service and premium hotels. The rest of the workforce often faces rigid rules: Fly coach only on the one or two airlines designated by company contracts, even if that means nasty connections. Stay only in hotels below a certain price. Fly business class only if the flight is eight hours or longer.

Now travel booking services like TripActions and Egencia can tailor a company’s travel policy with different rules for different employees. In the past, such segmentation was considered a bureaucratic hassle for travel departments. They typically wanted everyone booking with the same system under the same rules.

Topaz International, a firm that audits airfare spending for companies, has launched a program for clients to identify road warriors, evaluate their value to the company and rearrange travel policy to make their travel easier.

Among the recent actions Topaz has seen: companies loosening minimum-savings requirements. Instead of insisting on booking a flight that might be $5 cheaper even though it’s terrible, some clients have given employee as much as $600 in leeway so they can book premium-economy options.

“They’re proactively looking at whether they can increase satisfaction for these employees, allowing them to do their jobs better and easier,” says Topaz chairman Bradley Seitz.

He says one big company Topaz audits decided to waive airline contract restrictions for road warriors who live in hub cities of other airlines so they can get non-stop flights instead of always making a connection. A senior sales executive living in Dallas had to fly United. Now the company lets him take American nonstops, even if he spends more on tickets.

The strong economy has helped companies loosen their purse strings. That trend could quickly reverse if the economy slows. But Egencia says more of its clients have recently begun making business class more available to employees. Some have tailored that perk to employees who travel more than 10 times a year on long flights, says Virginie Pouget, Egencia’s head of global consulting.

Some companies are more likely to allow road warriors to take a direct flight even if it costs more.

The toll travel takes on employees can be significant. In a study of 742 frequent travellers to be released on Thursday, 25% of the road warriors, who’d spent at least 35 nights away from home in the past 12 months, said they are significantly or extremely affected by jet lag.

Almost half in the study said they hoped to travel less in the next two years.

The survey found road warriors ride in coach 80% of the time. Many may have top-tier airline status. But they no longer get many free upgrades because airlines are selling more first-class seats and industry consolidation has swelled the ranks of elite tiers and left upgrades for only the tip of the top.

The two most important remedies to reduce friction, according to road warriors: booking business class on flights of at least six hours, and reducing personal time spent on company travel.

“That wears on them,” says Scott Gillespie, head of analytics at ARC. “Sleep is a really important issue for these people.”

A few companies, including pharmaceutical giant AstraZeneca, have tried to address that by scheduling meetings involving travelling employees in the afternoon, Mr. Gillespie says. Instead of flying in the night before, a traveller might be able to catch a flight in the normal workday morning.

TripActions, a Palo Alto, Calif., corporate travel management company, claims 1,000 customers, mostly medium-size and smaller companies, including Dropbox, Lyft, SurveyMonkey and a chain of chicken restaurants.

The booking service specialises in customising corporate travel policies for different employees within a company. The company gets to dictate the policy, but TripActions uses machine learning to identify frequent travellers and their individual preferences for certain flights, specific airlines, types and price of hotels.

“If you fly once a month, you’re flying coach. If you fly every week, you should be in business class,” says Ariel Cohen, TripActions CEO and co-founder.

Box, a data-management company based in Redwood City, Calif., abandoned a traditional travel-management company and switched to TripActions in part to reduce friction when storms or airline cancellations leave employees stranded and angry. Instead of a call center where a traveller may be stuck on hold trying to reach a travel agent, TripActions has a chat function built into its app that allows instant texting with an agent to get faster rebooking.

“There’s a lot of friction for our travellers in nonrefundable fares and change fees,” says Stefanie Layne, Box senior director of sourcing and chief of staff.

Now the company has turned hotel booking into a shared savings game. Box sets a target price of $300 a night world-wide for company travellers. They can book hotels more expensive than that, but if they book under $300 a night, they get 30% of the savings back in either Amazon gift cards or an account for personal travel purchases.

Most take the gift cards, Ms. Layne says, and personal savings are running roughly $25 to $30 a month for Box employees who travel regularly. For the company, hotels booked have been 11% cheaper than the average rate available at the time of booking. “It just makes it more fun,” Ms. Layne says.

Such gaming of travel booking is still small: A Global Business Travel Association survey of corporate travel policies this year found only 3% of travel programs reward travellers for saving money on air bookings.

Wall Street Journal