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2018 in Review: Growth and Change in SME Business Travel and Expenses

By Karen Lynch

A snapshot of business travel expenses in 2018 illustrates changes in market dynamics, business drivers, travel options, employee behaviors, and payment programs. Luckily for small and midsize enterprises (SMEs), the year also brought continued innovation in the technologies used to manage the growing complexity of business travel and expenses.

Growing Business Travel Market and Expenses


In a growing economy, global business travel spending was expected to increase 7 percent by the close of 2018, on its way to a total $1.7 trillion in 2022. That compares to growth of 3 to 5 percent in prior years, according to the Global Business Travel Association (GBTA).1


Improved business fundamentals have been driving companies to travel more. The annualized rate of revenue growth of U.S. middle market companies has been surging in 2018, to 8.6 percent in the third quarter, and is consistently seen to outperform other economic segments.2 At the same time, small businesses were portrayed as confident of revenue growth and profitability in a mid-year report by the U.S. Federal Reserve.3 And the Small Business Optimism Index remained at a record high in October.4


A separate Fed report in July indicated increased SME activity in sales, purchasing, mergers and acquisitions, and investments in plant and equipment.5 The company travel expenses required to pursue such business objectives and growth have been on the rise. The GBTA forecasts a 3.7 percent increase in hotel prices and 2.6 percent increase for flights in 2019 worldwide.6 In the U.S., the average of all domestic fares, including consumer, was $349 in the second quarter, down 4.5 percent compared to 2Q17, but not counting additional fees for such basics as baggage handling.7


The right balance of domestic and international travel became a question mark for some SMEs, as the strong dollar and tariff measures hit U.S. exports. “Given the well-known link between business travel and trade, it is reasonable to expect that any negative impact on trade flows would be felt most directly on business demand,” the International Air Transport Association (IATA) said in August. The overall drop in international passengers could reach 4.1 percent by 2023 if trade protectionist measures increase, IATA says.8


Competition for SMEs’ business travel spend escalated during the year among established companies and newcomers. SMEs are now being offered a vast array of business travel options, cutting across various aspects of organizing, buying, paying, and monitoring business travel and expenses. One telling display of SMEs’ growing appeal was the first-ever National Business Travel Day in April 2018, launched by a diverse group of companies to offer prizes and giveaways at various airports.9


Millennials, Sharing Services, Online Travel Platforms are Changing Business Travel Dynamics


The millennial generation and digital economy are leaving increasingly distinct imprints on SME business travel and expenses.


Demographically, the workforce now comprises baby boomers, Gen Xers, and millennials – each of which has different travel behaviors that can make for an odd mix of expense reports. For instance, millennials are most likely to dine on-the-go, Gen Xers are most likely to dine as part of a group, and boomers are most likely to wine and dine, a 2018 GBTA study found. Additionally, only 64 percent of millennials pay for meals with business credit cards, compared to 74 percent of Gen Xers and 80 percent of boomers.10


Digitally native millennials may have been early adopters of ride-sharing services a few short years ago, but the market category is now so widely accepted that Uber was the most frequently expensed business travel vendor in 3Q18, accounting for 10.7 percent of the number of expenses submitted, according to Certify, a software company specializing in business travel expense reporting.11 Almost 90 percent of business travel programs now have policies allowing ride-sharing, a rapid increase in only a few years, the GBTA said.12


Systems for managing business travel expenses often remained manual and outdated in 2018, which made them error-prone, time-consuming, and limited in their ability to analyze and project business travel spending and potential savings, observers said. An early 2018 report from the Forrester market research company revealed that only 38 percent of companies were very satisfied with their business travel expense reporting and analytical capabilities.13 At the same time, digital capabilities were advancing, with many tailored to SMEs.


“The move to digital actually began when specialist travel expense management providers wrote mobile applications for popular smartphones, which enabled the in-built camera to capture receipt images,” according to the Gartner market research firm. “But the state of the art is now moving beyond this, with leading-edge vendors having product roadmaps that aim to kill the expense report as we know it.”14 In addition to enhanced automation, travel policy enforcement, and integration with travel booking tools and credit card feeds, capabilities are expanding to what could eventually be a “self-building” expense report, relying on GPS mileage tracking, calendar integration, and voice interaction with the application, Gartner said.15


When it comes to payments, established financial services companies, fintechs, airlines, and others continued to sweeten their business credit card offers to SMEs during 2018. Among the lures they used to get and keep customers have been greater rewards, sign-up perks, cash back, flight discounts, miles, no-interest introductory periods, complimentary travel and expense management solutions, and digital options such as virtual cards. However, interest rates were rising, on average.16


The Upside and Downside of Business Travel Spending


Not all SMEs are exercising all business travel options. “Small and midsize companies are significantly more likely to allow business travelers to use non-transparent payment methods such as personal credit cards or cash advances,” according to GBTA.17 The do-it-yourself (DIY) business traveler is not uncommon. And, “no one pays more than DIY business travelers,” according to Jay Walker, founder of Priceline and now CEO of a new travel startup. “Like all business travelers, they pay more than leisure travelers – despite traveling far more often – but they also pay more than big-company employees who qualify for volume discounts from the airlines and hotels,” Walker writes.18


The stakes are significant. “Travel and expense programs represent the second-largest line of expenditure after payroll for many businesses worldwide,” according to a report from the London School of Economics (LSE). Companies need to prioritize setting objectives for return on this investment (ROI), according to the LSE report.19


This ROI may not just be a matter of money, the report said. Hiring and retaining staff may be an important objective for maintaining a flexible and exciting business travel program. Employee safety – known in the travel sector as “duty of care” – has become increasingly important for businesses lately, in an uncertain world.


And while a dollars-and-cents calculation of the ROI on business travel has proved elusive, other indicators emerged in 2018. A study from the National Center for the Middle Market recently showed that 73 percent of fast-growing companies (30 percent or more per year) excelled at entering new geographies.20 In a separate survey, 67 percent of respondents reported feeling more engaged with their jobs while traveling internationally for business, according to International SOS, a travel security firm. On the other hand, 45 percent of survey respondents said they experienced emotional exhaustion, a core feature of burnout.21


“Companies that align their programs with their strategic goals will reap the benefits,” according to LSE. In addition, “by ensuring that an effective travel and expense program is in place, and making sure employees adopt it, businesses can stand to gain 25 percent more return on investment on business travel.”



Business travel expenses represent a significant part of SME budgets, and travel has been increasing in a growing economy in 2018. Technological innovation, generational change, and increasing travel and payment alternatives were also among the year’s business travel hallmarks. For many SMEs, the challenge is to manage business travel and expenses as a more strategic driver of SME growth.

Karen Lynch

The Author

Karen Lynch

Karen Lynch is a journalist who has covered global business, technology and policy in New York, Paris and Washington, DC, for more than 30 years. Karen also is a principal at Content Marketing Partners.


1. “GBTA Forecasts 7 Percent Growth in Global Business Travel Spend,” Global Business Travel Association;
2. “3Q 2018 Middle Market Indicator,” National Center for the Middle Market;
3. Small Business Credit Survey, U.S. Federal Reserve;
4. “October 2018 Report: Small Business Optimism Index,” National Federation of Independent Business;
5. Senior Loan Officer Opinion Survey on Bank Lending Practices, Federal Reserve Board of Governors;
6. “Buoyant Global Economy Means Higher Hotel and Air Prices in 2019,” Global Business Travel Association;
7. “Second-Quarter 2018 Air Fare Data,” U.S. Department of Transportation;
8. “How Would a Global Trade War Affect Aviation?” International Air Transport Association;
9. “National Business Traveler Day,” Upside Business Travel;
10. “New Research Identifies Business Travel Dining,” Global Business Travel Association;
11. “SpendSmart Quarterly Report,” Certify;
12. “Travel Payment Goes Virtual,” Global Business Travel Association;
13. Getting Better Mileage Out of Your Travel, Expense and Invoice Solutions,” Forrester;
14. “Shortlist Potential TEM Vendors with this Guide,” SAP Concur;
15. “Market Guide for Travel Expense Management Software,” Gartner;
16. “Credit Card Landscape Report: Terms, Trends and More,” Wallet Hub;
17. “Many Companies Don’t Know the Details of Their Travel Payment Methods,” Global Business Travel Association;
18. “There’s Got to Be a Better Way to Book a Business Trip,” Upside CEO Jay Walker in;
19. Managing Every Mile: How to Deliver Greater Return on Investment from Travel and Expense,” London School of Economics;
20. “The DNA of Middle Market Growth,” the National Center for the Middle Market;
21. “Uncovered: The Behavioral and Psychological Effects of International Business Travel,” International SOS;