Sometimes there are so many variables, that a blanket travel policy can cause more problems than it solves.
For example, using flight time alone to determine class of travel can appear overly harsh or unduly lenient. It also depends on whether the cost comes from the traveller's own project budget, general company funds, and what other employees at various levels and with various needs are accessing.
My company's travel policy relies on two considerations:
1. Common sense
2. Justify it to the boss
Once people become greedy or jealous, then things can get out of hand.
We have a lot of meetings in Europe that start at fixed times but have variable end times; as such, we often go lo-co out and business flexible back. But ours is a fairly small company, so such a straightforward policy works more easily than it might somewhere bigger.