Employees are now reassessing their personal priorities in terms of work travel. Similarly, companies are reassessing the true need and extent for business travel amid the newly mainstream digital alternatives. McKinsey predicts that around 20% of pre-COVID business travelers are never returning to the road, thanks to these dynamics.

Still, the outlook for business travel is brightening. Conferences and trade shows are resuming in-person event plans, a key driver of business travel for the year ahead. In North America, about 60% of trade-show companies reported "normal activity" levels as of February 2022, according to the Global Association of the Exhibition Industry. In June 2021, it was only one in 10.

As the rebound matures, middle-market companies have to establish their own new travel norms. Here are three tools that can help companies stay on track with post-COVID goals for cost controls, security and convenience.

1. For cost controls, set individual, department, and even transaction-level limits

One of the rare upsides from the pandemic was the widespread cost savings from reduced travel. A number of public companies discussed the impact on their bottom line in earnings calls during those first quarters of the shock. Amazon said in an October 2020 earnings call that it would be saving $1 billion on travel expenses for 2020. Alphabet, the parent company of Google, reported that it would save $371 million on travel and entertainment expenses for 2020.

Unsurprisingly, many companies will aim to preserve some of their pandemic cost savings as they establish post-COVID norms for business travel. According to a 2021 Deloitte survey, 7 in 10 companies say they will control costs by limiting travel frequency. 53% of surveyed companies said they would encourage employees to book travel with preapproved vendors, and 37% said they will opt for more economical travel alternatives.

As businesses establish new spending levels, corporate-card transaction and spending limits are tools that can help control expenses. Only 41% of companies used corporate-card transaction limits before the pandemic, according to the Global Business Travel Association.

Companies may not realize how multidimensional the card-limit tools actually are. Credit limits can be set for individual corporate cards or by department. Cards also allow for settings that restrict transaction time periods, as well as settings that create one-time, daily, or weekly transaction limits.

Virtual cards are an increasingly popular option. A virtual card, sometimes known as a "ghost account," is a generated credit card number that is not connected to a physical, permanent credit card. Virtual cards can even be created to pay for one-time transactions, restricted to a specific vendor and specific dollar amount, if desired. For example, a virtual card can be generated to complete a single airfare booking transaction, allowing for tight cost controls.

2, For added security, set post-COVID protocols to use all the security features of corporate cards

Pre-COVID, many businesses failed to make full use of security features for corporate cards. As travel resumes, it's an opportune time to review and update company practices. Improved security can cut down on the financial and administrative burdens of resolving fraudulent activity.

The first layer of fraud protection is to ensure all employees are using secure-chip and PIN technology on physical cards. Secure-chip and PIN cards can deter fraudulent practices like card skimming, where scammers collect card numbers and expiration dates from magnetic strip readers. New secure-chip cards are usually issued automatically by banks, but it's useful to conduct a full review of company cards to ensure this simple but effective technology is universal.

Individual card settings are another tool to protect against fraud. Companies can set restrictions on merchant types, country or location of payments, and time periods. These restrictions act as additional roadblocks for unauthorized transactions to corporate cards.

Virtual cards are also effective at cutting down on fraud. According to GBTA's pre-COVID data, 79% of companies said virtual cards are effective against fraud, yet only 1 in 5 corporate travel managers reported that they were using virtual cards to book travel.

3. For convenience, replace legacy expense-reimbursement with corporate cards to cut down on admin

Compared to the old expense-reimbursement system, corporate cards can be more convenient for both employers and employees. Though reimbursement tools have improved, the approval and reconciliation process can still be an administrative burden for companies. The system can also leave employers dealing with expenses after the fact, offering little control over merchant types, policy-violating transactions or spending mistakes.

Expense reimbursement can be burdensome for employees, too. About 49% of business spenders (those who make purchases or travel on behalf of their company) do not have corporate credit cards, according to the 2021 Business Spender Sentiment Survey conducted by expense-management firm Center.

According to a Business Spender Sentiment Survey, employees perceive the following burdens of expense reimbursement:

• 49% of business spenders have to use personal cards for work expenses
• 44% of that group say they do not value the points/rewards of using personal cards for work
• 51% cite the financial impact of using their personal credit for business expenses

In some sectors, employees continue to prefer using personal credit cards so they can collect points, rewards, or cash back. But there is a significant population of employees who are stuck in the expense-reimbursement process involuntarily. In that group, only 56% say they value the points or rewards they get from covering business expenses. What's more, 51% say there are burdens that accompany the personal-card policy. Tying up personal credit with business expenses has a financial impact, including inconvenience and embarrassment when they don't have sufficient personal credit available. They also report a sense of unfairness at being forced to use personal credit for business expenses.

Remaining flexible on the road back to normal

The business-travel recovery is moving at a slower pace than the personal-travel recovery – and it is unlikely to be a smooth road back.

The Back-to-Normal Index, published jointly by Moody's Analytics and CNN Business, showed the U.S. economy running at about 95% of pre-COVID levels in the first quarter of 2022. But travel was among the lagging indicators, with air travel still down about 15% from pre-COVID levels and hotel occupancy down 17%. Future COVID variants could pose more headwinds. Companies are sure to contend with more adjustments and changes to travel plans in the year ahead.

Still, travel is clearly trending up toward a new, post-COVID equilibrium. This transitioning window could be an opportunity for companies to take a more comprehensive look at their business-travel tools and protocols. With upgrades to their process, companies could see improvements in cost controls, security, and convenience for their business travel going forward.

As the pandemic conditions slowly recede, management teams can revisit company travel policies to make adjustments that meet employees' and executives' needs and preferences. Consider these three actions:

1. Explore opportunities to use virtual cards. With elevated security and flexible parameters, virtual cards can offer unique benefits for fraud protection and cost controls.
2. Set different types of limits on corporate cards. Settings like transaction amount, merchant type, daily or weekly limits, and even country of payment can help managers implement travel policies and cap spending levels.
3. Replace remaining expense-reimbursement programs with corporate cards. Sourcing travel expenses through corporate cards can cut back on administrative commitments, and it could be more convenient for many employees as well.

Rodrigo Sanchez is head of commercial cards at Citizens, where he is responsible for business strategy, product management, sales and account management. Rodrigo has 15 years of experience in the payments and cards industry, having served in leadership roles across product, strategy, and analytics both in the United States and abroad.

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