Controlling business travel spend is a challenge most organizations face. Travel budgets almost always ends up with additional allocations. With travel making a comeback after almost two years of the Covid-19 pandemic, experts already expect increases in the cost of travel in the coming years. The recent political developments in eastern Europe could further fuel a rise in oil prices leading to higher travel costs making the challenge even more daunting.
Fortunately, there are ways to save on business travel costs and manage your travel budget, that too with out compromising your employees’ comfort and well-being. It’s no rocket science, all it takes is some common-sense rules and staying informed and up-to-date on the latest economic trends in general and those in the industry in particular. Advice to find cheaper airfares and hotels online are fair, but the modern day businesses and their people require better strategies than that.
Have a Dedicated Team
Many companies approach business travel in an ad-hoc way, where things are left to the last minute. Most often it is left to the discretion of employees who may not have travel-planning experience. A trusted and experienced travel manager is perhaps the first step for growing businesses. The travel manager can team up with assistants from HR and Finance to deliver the best.
If the current travel spend doesn’t validate a full-time travel manager, the company still need to appoint someone to be incharge of the travel program along with at least a couple of supporting members. Having a dedicated and responsible team to properly manage the various complex tasks and demands of business travel can greatly impact the outcomes in terms of savings and value.
Frame a Good Travel Policy
Corporate travel policies are usually created by the heads of Finance, HR and Travel departments. It essentially outlines the company’s rules and procedures as to how their employees should request, approve, book, and expense travel and related expenses for business purposes. This includes things like, cabins allowed depending on flight duration, hotel categories at different locations, how early should they book their trips, and precautions employees during travel to different destinations among other things.
Our whitepaper (titled Create A Company Travel Policy That Works’) available here, provides a detailed guide on how to draft and implement a comprehensive and practical corporate travel policy for your organization. Having a good travel policy isn’t enough, employees should be aware of the policy. Making it available in a easily accessible location (like the ‘Travel Policy’ module in the BizTripz platform) will help company staff to be able to quickly refer and take compliant decisions.
Have a Trip-Approval Process
Let’s face it – most employees do not worry about saving company money when it comes to business travel. If you identify areas of wasteful spending you will find a lot of it come from missed saving opportunities while choosing different services. The most tried and tested approach is to have a designated budget allocation for business travel expenses and an approval process in place for the business trips. This may sound out-dated, but the process is very useful for keeping costs within compliance limits and sometimes even to check if trips are justified and required at all.
Simple expenses like taking a client out for lunch or taking a cab for a meeting can be quickly captured and submitted for reimbursements (by the way, BizTripz includes tools to easily scan and capture travel related expenses). However longer trips must have the management involved. Ideally, employees should submit a trip summary that includes the purpose of the trip, duration of stay, details of the passengers, and at least a rough estimate of cost. This request should then be passed on to the HR or management for approval.
Incentivize Travel Savings
A more recent but less effective trend among business travel mangers is to have incentive programs to reward travel policy compliance and costs saved. Few employees worry about travel spend, as they have the provision to expense costs without much scrutiny from their supervisors or managers. This attitude leads to missed savings due to many factors like last-minute bookings that are are almost always more expensive, or opting for services that they personally prefer.
For incentivizing the employees for saving company money, many companies have created policies and programs that rewards its employees for booking cheaper travel service options. They consider the potential savings the company gained because of their choice and that gives back a percentage of that back to the employee as a reward.
Contract Good Travel Agents
People often overlook the value that travel agents bring to table, including negotiated agent rates, wealth of experience, and huge inventory of services. Even when you’re booking a simple business trip, working with a travel agent is worth it. Travel agents have regained their status even among the millennials in the since the pandemic as they could give better advice, find alternative routes and get exclusive deals even in the worst situations.
Now, if you’re planning a complicated business trip with group travel, conferences, or multiple hotel bookings, you definitely require a corporate travel agency to procure the great services at best rates. They mostly work on a small service fee, but most often it pays for itself when you consider of all the convenience and cost benefits that they provide.
Other Procurement Tips
And then there are the many tips and tricks that help save on different services at different stages of procurement. With airfare, hotel costs, transportation, and general travel expenses, costs rack up quickly. Here are some ways to reduce these travel expenses.
- Book early: booking flights in advance is one of the the best ways to save on airfare. Last-minute flights are usually expensive, and the more time you have to shop around, the better.
- Consider Refund/Change restrictions: consider the fare details and be careful to avoid unnecessary airline fees that can turn an otherwise budget trip into a significant business expense.
- Airport parking Vs. Transfers: if you’re traveling for a week or longer, the daily cost of airport parking adds up. It might be cheaper to book transfers to and from the airport.
- Cards and rewards: frequent travelers may consider travel cards that let them earn points for travel and related expenses and provide other benefits like lounge access or upgrade.
- Negotiate corporate rates: pull out those supplier report and find your frequently used suppliers. Negotiate with them for corporate deals and special discounts.
- Alternate accommodations: consider alternatives to conventional hotel accommodations, like serviced apartments for longer stays, groups, etc.
- Try Ride-shares: consider using ride-share apps like Uber, Careem and Lyft where possible and safe.
- Stay near the business: look for accommodations close to the place of business. This could save you money you may need to spend car rentals, transfers and ride-shares.
- Check out regional airports: very often there cheaper tickets to second-tier airport nearby that are about the same distance as the major airports.
From considering low-frill airlines to taking trains and getting travel passes, there are plenty more. Not all of them work for every business and business traveler, but being aware and open to these possibilities help in controlling the travel spend.
Business travel can be a big expense for most organizations. But as long as you plan accordingly and have the right tools and strategies in place, there’s no reason for business trips to hurt your bottom line. In fact, business trips are an excellent way to increase revenue as they create new opportunities and enable better service deliveries. I hope this guide helps you get better value from your travel spends and positively impact your business.
Good post. Biz trips are picking up now and I absolutely appreciate this website. Thanks!