Business travel is one of the biggest expenses for companies these days. The return on investment can be quite big, and yet, most of us can’t stop but wonder – isn’t there a way to cut costs on business travel?
Truth is, travel can cost much less for the majority of businesses. It takes some team effort to make it happen, but with proper guidance, a fine-tuned travel policy, and a smart system, you can now seriously cut these costs.
How is this possible now that business travel is an everyday occurrence, you wonder?
In the US alone, 1.3 million people travel for business every single day. And these numbers will only keep growing.
The industry was forced to a near-halt during the pandemic, but the numbers have increased in the last 2 years. In fact, the business travel market is predicted to grow by 188% from 2020 to 2028!
So, how do you cut costs on something your company pours its resources into more every year? In this article, we’ll share 7 crucial tips that will help you achieve this.
Use an online travel reservation system
A smart, efficient online travel reservation system can significantly change your corporate travel spending. You’ll be able to save on everything from airfares to accommodation to car rentals to conference room bookings. And you’ll get better control over your corporate travel expenses. Basically, systems show you where you’re unnecessarily spending your money – and cut the costs for you.
With such a system, travelers can gain access to a big inventory of flights and accommodations and automatically find options within their budget. Your team can enjoy seamless planning of their trips, and the business can get timely reports on spending. By customizing the system to your business preferences, you can ensure everyone complies with the corporate travel policy.
TravelPerk has one of the biggest travel inventories, but that’s not the only useful feature you can find. They also have some add-ons that will save you thousands of dollars on:
- Cancellations – users can cancel their trips with a guaranteed refund of 80%
- VAT recovery – save up to 25% on these expenses
- Travel Care feature – a travel alert and safety system
- Centralized invoicing
- Trip Assistant – an app to be downloaded on the traveler’s phone
Create a corporate travel policy
A smart system will help you find cheaper tickets, affordable accommodation deals, and much more. But, you need to set a budget for it to follow – as well as some rules for your employees. If you want to cut costs on business travel, you need a smart, detailed corporate travel policy.
With a good policy, you can ensure that the employees travel in style, which still doesn’t cost the company a fortune. A policy should include everything from accommodation allowances to transportation budgets and flight details to avoid unnecessary spending.
Without parameters, how do you expect your employees to know what they can spend during the trip?
Now, a successful travel policy is a lot of work. You can use ready templates in the corporate travel systems to gain insights into your decision. Generally speaking, here are the key elements to include in your corporate travel policy:
- Approved spending for transportation, accommodation, car rentals, etc.
- Rules for air travel bookings – economy or business class
- The detailed process for booking tickets, hotels, and other arrangements
- Permitted extra spending for daily expenses such as food, transport, etc.
- Reimbursement processes and report requirements
Essentially, your travel policy should be concise, clear, and easily accessible. Of course, you can tweak it as you go, but these few points should definitely be included in the first version.
Your policy can easily be incorporated into a system too, so you can save time and automate travel booking approvals, all while staying on budget. This will give employees more autonomy – something of great importance nowadays. Up to 72% of millennials prefer to book their own business trips.
Negotiate rates with airlines/ hotel chains
Some companies send out employees on trips daily. Some employees travel to a few places regularly. You can have offices in different cities or always send the team for training in the same location. When you have such a frequency of travel in a business, you can save a lot by negotiating with airlines and hotel chains.
Hotels and airlines will try to entice frequent business travelers with special deals and packages. Instead of looking for new accommodation for every trip, contact hotel chains and ask them for a great deal for frequent business guests. This is a very good way to save money on corporate travel, especially if employees travel to the same places frequently.
Encourage flexibility in business travel
Some wiggle room is almost always an option. Surely, some meetings or events don’t allow for flexibility. The employee must be present in the other location at the exact time, so you must book their trip immediately. But, in most cases, you can offer some flexibility to the traveler.
This is also a good way to save some of the corporate money. For instance, you can see if the employee would be willing to travel a day earlier or later. This will give the traveler more freedom to choose, and you can save a lot on flights and hotels.
As you know, an airline ticket can cost double the amount of money today compared to what you would have paid yesterday. Your company can spend less money on organizing these trips by offering some flexibility.
Take care of VAT recovery
Business travel is often subject to VAT recovery. This depends on the tax jurisdiction and the type of expenses. Yes, the VAT recovery process is often time-consuming and complicated, but with a good system and proper organization, you can get ready reports and data to submit right away.
Train your employees and your system to define and claim legitimate expenses, and save the data to use for VAT recovery. This can help you save up to 20% on annual business travel costs.
Encourage public or shared transportation
One expensive part of business travel is transport around the new location. If you don’t plan for this ahead, your employees won’t have affordable options or information on how to save on these expenses.
Investing in corporate travel can help your business maximize returns because face-to-face communication is very important. But, there’s no need to send each employee to an event separately when they can share or use public transport.
Encourage travelers to take public transport to save money. This is not only cost-effective but also reduces your company’s carbon footprint. Imagine how much this would save. We are discussing car rental costs, taxi fares, parking fees, etc.
Be transparent with your team
Employees want to know the why behind your travel policy. Be transparent and honest with them. Tell them that they can stay in better hotels during their trip by traveling in economy class. Or, by sharing transportation, you can afford to send more people on the trip.
Some incentives can’t hurt, either, not if you want your team to try and save money during their business trips. You can give those who stay on budget mileage points, extra days off, bonuses like team lunches, or a better room at the hotel on their next trip. Be creative – they’ll surely appreciate it!
Remember, this is a team effort!
Most companies that send people on business trips these days are spending unnecessary amounts without even knowing it. Start with a good travel policy, follow up with a smart system to implement it, and keep track of it all, but remember – it’s a team effort.
While you should prepare the basis and set the rules, your team will travel and work toward boosting your business’ success. So, remain transparent and offer them a good experience during their trip. They won’t be at their best if they are stressed, exhausted, or unhappy!
Frequently Asked Questions
How much can I save by cutting costs on business travel?
This is individual for every company and depends on its travel policy and expenses. With proper planning, the right system, and some guidance, you can cut costs significantly, maybe even split them in half.
How can I reduce business travel costs without compromising the team’s productivity?
You can now find deals for accommodation and flights thanks to travel booking systems and still offer the team the same quality on their trip while saving the company money. You can save a fortune on business travel by booking tickets and accommodation in advance, finding smart deals, and negotiating prices.
How can I save on transportation expenses during work trips?
Encourage travelers to use public transportation instead of taxis or car rentals. If you have more than one person on the trip, encourage shared transportation to locations where they all need to be.
Are there any strategies to reduce accommodation expenses on business trips?
Yes. Consider guesthouses and apartments instead of hotels or accommodations located slightly outside the city centers. These tend to have lower rates, and you don’t have to compromise on facilities or comfort.
This article 7 Crucial Tips to Cut Costs on Business Travel originally appeared on Rick Orford – Invest, Earn More Income & Save Money.
This article originally appeared here and was republished with permission.