For many companies today, corporate travel is an essential part of running a business. The costs of corporate travel can be significant though, and the prices of both flights and hotels are predicted to continue rising in 2020. Thankfully, there are multiple ways to keep business travel expenses from getting out of hand without neglecting the needs of your travelling employees.
In this guide, we’ll cover the steps you can take to reduce travel costs before booking, ways to save money on flights, accommodation, and car rental, and finally one of the most effective methods for cutting travel costs.
Assess the current state of travel spending
Do you have detailed data on your business’ travel spending? Having a clear picture of current spending patterns allows you to identify key areas for saving efforts and to set realistic travel budgets. It also helps you measure the success rate of business trips.
Consider alternatives to business travel
While face-to-face meetings are often necessary, consider whether it’s possible to avoid some business trips by opting for virtual meetings instead. As complex as they may be, sometimes a web conference can save you a trip and all its associated travel expenses.
Write (or revisit) your travel policy
If you don’t have a travel policy in place, you’re not alone—around 40% of businesses lack one. However, an effective travel policy is one of the key strategies of reducing business travel expenses; putting one together is highly recommended.
Businesses that already have a travel policy should review it regularly. Make sure that the document is up-to-date, relevant, and covers all travel-related costs. Above all, make sure that the policy is user-friendly to encourage your employees to follow the guidelines.
Negotiate deals with vendors
Strike a deal with hotel chains or car rental companies. Many vendors will happily reduce their rates in exchange for being your company’s preferred choice, allowing for further corporate cost savings.
Streamline expense tracking
Consider using apps that make it easier for your employees to keep track of travel expenses. Using an app can save a lot of time (allowing employees to focus on more productive activities) and provides valuable data that makes business travel budgeting easier.
Consider outsourcing travel management
If your employees travel frequently for business, you could make significant savings by hiring a corporate travel booking specialist to manage travel arrangements. Shop around and compare the costs of hiring an agency with the savings they offer on flights and hotel room rates.
Avoid last minute flight bookings
Planning ahead usually pays off when it comes to corporate airfares. While it’s sometimes possible to nab a great deal at the last minute, try to book at least several weeks in advance for best results.
Make savings through flexible travel
If the timing of an upcoming business meeting is flexible, try to schedule it during an off-peak time (outside school holidays and the tourist season). Further savings can usually be made by booking early morning or late night flights. Another rate-slashing alternative is to fly to airports outside city centres, but take into account the time spent on travelling and the cost of ground transportation.
Use fare tracking tools
Don’t miss out on sales, promotions and discounted fares—use apps that track airfares or subscribe to email alerts from comparison sites.
Watch out for extra fees
Early boarding, seat upgrades, in-flight meals, and other extras can quickly add up. Make sure your employees know which expenses are covered by your business travel policy and which are not.
Changing flights after a booking has been made can also be really expensive, so find out what different airlines charge for changes before making a booking.
Consider all accommodation options
Alongside flights, accommodation is a major business travel expense. You’ll often find great deals on hotel rooms on comparison websites and hotel rate tracking tools, but look into other options too. For example, an increasing number of businesses are using Airbnb for Work.
Staying outside a city centre or even in a smaller nearby town can also significantly reduce accommodation costs. However, make sure commuting costs don’t cancel out the savings.
Check if any extras are included
The cheapest room isn’t necessarily the most economical choice. Look out for room deals that include extras like a free breakfast, Wifi, or complimentary airport travel, and work out if the package offers better value than paying for each service separately.
Research your ground transport options in advance
What’s the best way for your employees to get around once they reach their destination? It depends on the location and the travellers’ needs. Compare all the options, from taxis to buses and trains to Ubers, in advance. Think of practicality as well as affordability.
Cut the costs of car rental
When hiring a car is part of your business trip costs, make sure that you pay only for services and extras that are needed. For example, if your employee doesn’t need a GPS navigation system, advice them to opt out. Ask them to choose the most cost-effective refuelling option as well (usually filling the tank before returning the car).
Set a daily allowance
Meals and miscellaneous expenses make up a large portion of business travel expenses: 21% and 17%, respectively. Encourage responsible spending by setting a daily allowance. Your employees are more likely to stay within the budget if your daily allowance is destination-specific and realistic.
Our final piece of advice could be one of the most effective ways to cut corporate travel costs: reward your employees for making savings. For example, you could offer perks, such as time off work or high street vouchers, to encourage employees to make budget-friendly choices when travelling.
With great incentives in place, employees will be motivated to look for ways to reduce expenses without compromising their productivity. It’s a win-win situation for achieving business travel savings.