by Roderick McInnes0
How To Reduce Travel Costs In A Business
Sooner or later, you have to get out of the office, hang up the phone, switch Skype off and get on a train, in a car or on a plane and go to meet a client. Business travel was amongst the many line item costs that took a hit during the recession, but now we are seeing a comeback of the business traveller.
Whilst this is good news for hotels, corporate travel programs, and airlines, businesses must be careful not to allow this seemingly necessary expense get out of control. Travel costs soon add up, especially when sending sales teams, interims or senior executives abroad.
How To Keep Business Travel Expenses Low
Here are a few useful tips for those looking to keep costs under control, or for businesses that haven’t put team members on the road until now.
- Create a Travel Plan
With email, phones and VOIP services, such as Skype, unexpected travel should be a rare occurrence. Most travel, whether visiting prospective clients, current clients, trade shows or awards, can be planned in advance.
Put together an annual travel plan, ideally before preparing your next set of financial forecasts, or whilst doing the previous years accounts. This will give you an accurate idea of costs, based on what travel cost last year.
Pull in information from your sales pipeline and client projects to estimate when and where you may need to send staff in the coming year. Also, use industry conferences, expos, and other key milestones to plan whether your company needs to attend, allowing you to plan an entire year of travel in more detail.
- Budget Based on Advertised Costs
Providing you ask when booking, or work with a corporate travel agent who will ask on your behalf, businesses should always be able to get a discount. Loyalty schemes also offer discounts to business travellers, making it worth joining to save money on flights, hotels, and other travel costs.
However, when you do the budget, estimate that you are paying top dollar for travel - making it that much better for a financial director when they see you are consistently under budget for travel costs throughout the year. This also leaves you room to manoeuvre in case some trips are more expensive than planned. Always have some contingency money when it comes to travel, things can go wrong.
- Always Find a Bargain
Join every reward program relevant to your business. If possible, get credit cards that reward you with frequent flyer miles, helping you accumulate points that reduce travel expenses over time with non-travel related costs.
Hotel chains and car rental companies all offer membership schemes too, keeping your travel costs that much lower. There are also numerous travel agents that aim to find the best bargains for business travellers, alongside discount travel websites and deals when you book direct with airlines and hotels.
When booking travel, buy tickets early, but not too early. Most experienced travellers know that prices fluctuate, depending on demand and the season, so try to avoid traveling when planes and hotels are packed with tourists. Travel to or from most major cities is also best avoided on a Friday since prices always increase over weekends.
The same rules apply when booking a flight, either across Europe, Asia or the continental United States. Flying between Tuesday and Thursday keeps costs low, whereas Monday and Friday inevitably results in more expensive flights and hotel costs.
- Think Budget Airlines & Airbnb
The purpose of business travel is to make money. Providing you are alert for your meeting, can shower and sleep - if needed - then it doesn’t matter whether you fly business class and stay in a five-star hotel, or fly budget, stay in an Airbnb apartment and have breakfast at McDonald’s.
Look at all of the alternatives, including airline and hotel websites directly, since discount platforms, such as LastMinute.com and Expedia don’t always show every option. There will always be cheaper alternatives, providing you do your homework.
- Invest In Expenses Software
When it comes to expenses, keeping them low is a matter of the right policies and the right software. There is a wide range of app-based software options that integrate with popular accounting solutions, making it easier for employees to record and submit expense claims.
At the same time, this data will allow you to analyse what line item costs you can reduce; for example, food and other sundry expenses whilst traveling. If hotels, planes, and cars are not being booked far enough in advance, then make a six to eight-week travel policy.
Ensure discounts and loyalty programs are being used, along with alternative travel options, to keep costs low. The same should apply when setting on the road budgets, to avoid bill shock when staff get back to base.
Key Takeaways: Keeping Travel Costs Low
- Create an annual travel plan. Based on your sales pipeline, client projects, trade shows, conferences, and expos. Only travel when necessary, but don’t cut trips that could generate long-term returns. There is no substitute for face-to-face meetings.
- Plan a budget based on average - not discount - market prices. Giving you breathing room and the incentive to find bargain deals, to keep travel costs consistently below expectations.
- Always find discounts. Search the Internet for them, work with travel agents, use loyalty schemes and don’t assume that so-called “discount” websites are the only solution. Often you can find bargains going direct to the airlines and hotels. They don’t like paying a third-party commission unless necessary, so they are often willing to give discounts for those who book direct, especially corporate travellers.
- There are almost always cheaper alternatives. Avoid booking at peak times (holidays, Mondays and Fridays), use Airbnb, budget airlines, and don’t always fly into hubs if there are regional airports that cost less.
- Keep a close eye on expenses, with stricter company policies and software that makes it easier to enforce and analyse where the money is being spent on corporate travel. This makes you better informed when planning the following year’s travel budgets.
If you are a frequent business traveller or your organisation has regular travel commitments, how do you keep on top of travel budgets? Please share your experience below, using the comments box.