Sustainability in Travel and Procurement

March 21, 2023

"Sustainability mandates will be felt throughout all aspects of the financial operation. Travel managers have the burden of both handling the regulatory compliance around sustainability as it continues to evolve and carrying the load of providing sustainable options for travelers

More than 80% [of survey respondents] feel that incorporating responsible source principles will have a significant impact on procurement, including travel content and travel service providers." — IDC, Keys to Optimize Travel Procurement, 2022

Over 80% of those surveyed feel incorporating responsible source principles will have a significant impact on procurement. — IDC Keys to Optimize Travel Procurement, 2022
Successful procurement programs are putting an increased focus on responsible source principles.

Balancing sustainability goals with procurement goals 

“Hospitality and travel operators cite energy efficiency requirements (65%) and mandatory reduction of carbon footprint (47%) as two areas having profound or significant impact on their organizations.” — IDC COVID-19 Impact on IT Spending Survey, November 2020

Cost is a major factor for travel sourcing managers. The challenge for travel procurement is to balance cost control without negatively impacting the traveler experience or traveler safety. This will be a greater concern going forward as fuel costs and inflation are set to push procurement rates for hotels, airlines, and transportation higher. — IDC, Keys to Optimize Travel Procurement, 2022

The U.S. Travel Price Index increased by 19% in May 2022 compared to May 2019. — U.S. Travel Price Index, U.S. Travel Association

Sustainability matters, but at what cost? In a recent GBTA study, most U.S. and Canada-based travel managers (84%) said sustainability is at least “somewhat important” in the design of their travel program. However, only 6% of these same travel managers said their company currently allows employees to spend more if sustainable options are available. An additional one-quarter (26%) would consider allowing travelers to spend more. 

84% of those interviewed felt that sustainability is "at least somewhat important in the design of their travel program." But only 6% of companies currently allow employees to spend more on sustainable options.
Company travel policies aren't matching traveler's increased support and interest in sustainable travel.

"This creates a dilemma. Travel programs want to reduce their carbon footprint but are mindful of cost. Several of the most impactful carbon reduction measures—such as purchasing carbon offsets, allowing direct flights, paying extra for sustainable aviation fuel (SAF), or prioritizing flights on newer aircraft—can have significant cost.”

—GBTA, The Corporate Travel Comeback: The Evolution of Ground Transportation and Other Business Travel Trending Topics, 2022

Travelers focus on sustainability

Sustainability is a fast-rising factor. Adding more functionality to support ethical and sustainable travel vendor sourcing is seen as “valuable” for more than 90% of procurement professionals.”

Especially when “4 in 5 U.S. business travelers want to return to or exceed their pre-pandemic business travel frequency and young travelers are most eager to travel more. Almost half of travelers 18-34 (45%) want to travel more often than they did pre-pandemic.

“For most business travelers (56%), sustainability [minimizing your carbon footprint] is a moderate priority. But reducing emissions is a bigger priority for younger business travelers — 84% of 18-34 year-old travelers say reducing carbon footprint when traveling for business is a moderate or top priority.

Minimizing carbon footprint is a moderate priority for 56% of business travelers, but a moderate or top priority for younger travelers (84%).
Minimizing carbon footprint is a higher priority for younger travelers.

“Business travelers are willing to sacrifice in order to reduce carbon emissions. Most are willing to opt out of daily room cleanings (77%), rent smaller cars (73%), fly premium class less often (68%), take fewer business trips (63%) and even travel for longer periods of time to reduce emissions (56%).”  —GBTA Survey: The Dawn of the Employee-Centric Travel Program, 2022

Part of optimizing the travel procurement process

Some measures save money. These include reducing business travel, allowing premium class flights less often, and requiring travelers to rent smaller car classes.  While these measures save money, they still have a cost. They can hurt tarveler experience and undermine productivity [poor experience can result in frustrated, tired employees, especially for longer trips.].”  —GBTA Survey: The Dawn of the Employee-Centric Travel Program, 2022

“Rise of remote/hybrid workers: IDC predicts that by 2023, digital transformation and business volatility will drive 70% of G2000 organizations to deploy remote or hybrid-frst work models.” — IDC FutureScape: Worldwide Future of Work 2022 Predictions, October 2021

From IDC, Keys to Optimize Travel Procurement, 2022:

“Over 42% of vendors are mainly using spreadsheets for analyzing supplier data.

“40% of travel procurement professionals are willing to pay a premium for intelligent travel procurement features."

• More strategic: Spend management overall is gaining a higher profile. Travel buying is experiencing the same growth in strategic awareness.  • More flexible: Travel buyers will make investments to allow for quick decisions about supplier bids and to assess risk. • More responsible: Travel buyers will prioritize the monitoring of sustainability metrics at all levels of the sourcing and buying process. • More intelligent: Travel buyers will leverage artificial intelligence (AI) and machine learning (ML) to gain greater visibility of travel spend and enhanced procurement compliance protocols. • More traveler-centric: Travel buyers will shift away from exclusively using cost-centric or process-centric metrics to incorporate traveler satisfaction, employee turnover, and travel policy trends. Source: IDC, Keys to Optimize Travel Procurement, 2022

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Author

Diana Rose Brandon
Director, Marketing Content

An accomplished business writer and creative professional, Diana heads up content for Deem’s many content areas including PR, social media and blogs. Her background includes creating visual and written stories for the travel, consumer electronics and technology industries. Diana is a story junkie who loves to travel. When she isn’t writing, you can usually find her reading, playing word games or behind a camera.

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