Just Released Research Report: The 2006 Travel Card Benchmark Survey Results

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

Travel card spending in North America increased from $120 billion in 2004 to $143 billion in 2006 and is expected to rise to $227 billion by 2011, according to a study released in May of 2007 by RPMG Research Corporation. This finding is one of many new insights into the progress of travel cards in the marketplace found in the 2006 Corporate Travel Card Benchmark Survey Results. The information in the Survey Results is based on 1,040 responses from travel card using organizations that were either customers of one of 19 major financial institutions or members of a National Business Travel Association or National Association of Purchasing Card Administrators received between September and December 2006.

Respondents report a variety of benefits from travel card use. The majority of respondents indicate that travel card information was important to obtaining a discount on travel expenses including airfare, hotels, or auto rentals. At moderate to higher levels of travel, the average discount obtained by using travel card data is 3% to 5% higher than that of organizations that do not use travel card data in negotiations with vendors, a significant saving that can be attributed to enhanced visibility into organizational spending patterns when travel cards are used.

Further, 73% of respondents use travel cards to reduce cash advances at their organization with one-third completely eliminating cash advances with travel cards. In addition, 47% of respondents use travel cards to reduce “petty cash” accounts in the organization. Thirty percent of respondents eliminated all of their petty cash accounts because of travel cards.

The integration of travel card data with expense management software solutions can improve the expense reimbursement process significantly, reducing clerical expense report processing time by 58%, traveler time to complete an expense report by 23%, and supervisory time to evaluate an expense report by 44%. Further, the technology reduces the average time elapsed between the date an expense report is submitted and the date reimbursement is issued by 27%. The net effect of these changes is a reduction in the average cost to process an expense report by 58% and an increase in clerical staff productivity of 169%.

While popular press would have one to believe that organizations worry about control over employee travel card use, respondents paint a different picture. Overall, 94% believe that the risk of travel policy violation is the same as or lower with travel cards than it is with other payment methods in the organization. Fifty-one percent of respondents believe that travel card use is associated with significantly lower likelihood of travel policy violation. Similarly, 96% of respondents believe that the risk of reimbursing misrepresented or fraudulent expenses with travel cards is similar to or lower than that of other payment methods in the organization. Forty-eight percent of respondents believe that travel card use is associated with significantly lower likelihood of fraudulent or misrepresented spending.

The Results highlight a variety of the “best practices” of high performance travel card programs, including insights into organizational leadership, policy, use of technology and data, controls, and program management. The Results also enable the reader to assess and find ways to improve their own travel card program performance by providing benchmark travel card program statistics by size of business, type of governmental unit, and industry category.

Finally, the Results shed light on a variety of trends in the market, including the use of travel cards outside of North America, liability arrangements, and customer satisfaction with card issuer service, support, technology, data capture, and reporting.

About the Researchers

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 2006 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 2006 Travel Card Benchmark Survey Results can be obtained by visiting http://www.RPMGResearch.com or by sending an inquiry to info@rpmgresearch.com.