By Professors Richard Palmer (Eastern Illinois University) and Mahendra Gupta (Washington University in St. Louis)

Spending on travel cards by business and government in North America is currently about $120 billion per year and expected to grow at an annual rate of about 8% over the next five years, according to a study released in late 2004. The main drivers of expected growth are plans to increase the number of cardholders in the organization and general expectations of increased travel spending. This finding is one of many new insights into the progress of travel cards in the marketplace found in the 2004 Corporate Travel Card Benchmark Survey Results. The survey generated responses from over 700 corporate and governmental travel card-using organizations from 14 major financial institutions and members of a major travel management professional association. The study was managed by RPMG Research Corporation.

Respondents report a number of benefits from travel card use. About 39% of respondents use card spending data to generate greater discounts in negotiations with suppliers. The average discount obtained by virtue of use of travel card data in negotiations with suppliers equates to about 9% of the respondent’s travel budget. One quarter of organizations reported savings of 10% or greater of their travel budget by virtue of leverage delivered by travel card data. Organizations that integrated card data into an electronic expense report experienced efficiency increases of over 56% in terms of the manpower required to support the expense reporting process and a 40% reduction in the time elapsed from expense report submission to reimbursement. In addition, about half of respondents use travel cards to eliminate "petty cash" accounts, reducing their number by an average of 76%. The use of travel card also allows most organizations to increase the visibility of and control over their travel spending with the use of travel cards. Overall the travel card value proposition continues to be strong in the marketplace.

The study finds that organizations do not use, and consequently benefit from, travel cards equally (e.g., 80% of the total travel card spending within the Fortune 500 is accounted for by only 30% of the respondents in that category). Variations in two key organizational policies--card distribution and organizational mandates about card use--accounted for the bulk of differences in travel card use. Organizations that captured a high percentage of travel spending on the travel card distributed (on average) four times as many cards as organizations that captured a low percentage of their travel spending on their travel card. The survey results indicate that high performance travel card programs provide travel cards not only to all employees who travel on company business more than twice per year but also to a significant portion of others in the organization who travel less frequently. A "mandate" requiring employees to use the organization’s travel card is the second key policy variable. On average, monthly travel card spending increases about 75% when a card program goes from a low to a high card distribution status and over 100% when a card program goes from a non-mandated to a "mandated card use" status.

The 2004 Corporate Travel Card Benchmark Survey Results provide detailed analysis of many other factors that distinguish organizations that capture a high percentage of travel spending on the travel card from those who do not and sheds light on a variety of trends in the market, including travel card program management practices, liability arrangements, the use of and benefits of automated expense reporting software, delinquencies, card fraud and misrepresentation, employee non-compliance with travel card spending policies, customer satisfaction with card issuer service, support, technology, data capture, and reporting, and provides benchmark travel card program statistics by size of business, type of governmental unit, and industry category.

RPMG Research Corporation is an e-commerce and commercial card technology consulting firm based in Marion, Illinois. The firm specializes in industry-academic research partnerships to address commercial card and e-technology implementation issues. Team leaders for the 2004 Corporate Travel Card Benchmark Survey include Richard Palmer, the Lumpkin Distinguished Professor of Business at Eastern Illinois University and Mahendra Gupta, the Virgil Professor of Management and Accounting at Washington University in St. Louis. More information about the 2004 Corporate Travel Card Benchmark Survey Results can be obtained by inquiry to info@RPMGResearch.com or or visit to http://www.RPMGResearch.com.