How to cut costs for business travel?
Did you know that companies spend around 10% of their revenue on business-related expenses? Or that 1.3 million business trips are taken in the US every day?
As more companies expand into the global market, the number of corporate travelers touring other countries or states continues to rise every year. In 2017, for instance, businesses spent a staggering $1.3 trillion on corporate travel. According to GBTA, this number is projected to rise exponentially to reach $1.7 trillion by 2022.
Which brings us to the question: how can businesses cut travel expenses?
While life on the road is full of costs, from accommodation to meals and airline tickets, keeping these costs at bay can be challenging. The good news is that with the right information and a bulletproof strategy, it’s possible to bring these costs down. This post will discuss the five strategies businesses can adopt to cut costs for business travel.
Planning is the general rule of thumb when it comes to saving money.
In the world of corporate travel, it’s an astute move to book flights in advance as price increases can happen at any time. With airfare prices projected to increase 7% in 2022, last-minute bookings will not help you cut travel expenses.
The good news; most airlines offer discounts and comparatively low prices for flights that are booked in advance.
Market analysis and seasonal influence are two of the key factors affecting flight prices, and these can be nullified by an advanced purchasing strategy. Thus, it’s in the management’s interest to ensure they have all the resources needed to pull the trigger on early bookings.
Tighten Your Corporate Travel Policy
Tightening your company’s travel policy can help you significantly cut travel expenses.
Unfortunately, a study conducted by the Expedia Group found that 40% of companies don’t have a travel policy. And without a travel policy in place, you might not even know you’re overspending on travel.
The solution? If your company has a travel policy, review the policy closely to see if it covers all aspects of your travel requirements. Take note of all the recent travel trends and spending to see where most of your travel expenditure goes.
Next, implement a clear procedure that will help you cut unnecessary costs and ensure the company follows a laid-down procedure for managing travel and related expenses. Some general rules to include in your travel policy are:
- All travel arrangements and bookings must be made in advance
- Always exercise good judgment where travel expenses are concerned
- All travel expense reports must be carefully reviewed and approved by all managers
- Travel is only allowed to countries or locations pre-approved by the company or chosen following the company guidelines
- Only the director or departmental head can approve travel requests
Your travel policy should be simple enough to apply across the entire company. If your company doesn’t have a travel policy yet, it’s time to implement one.
Take Advantage of Flight Discounts Reward Programs
Flights are expensive, but you can take advantage of airline discounts and promo codes to cut travel expenses. If there’s none available at the time of your booking, opt for a fixed travel plan, which is usually cheaper.
Likewise, most airlines and hotel chains have a reward program for their frequent customers and offer them free flights or free stays from time to time. By taking advantage of discounts and reward programs, your company could save hundreds of dollars per year on travel.
Meet Via Video Conference
Nowadays, business communications are a lot easier, thanks to technology.
With the help of video conferencing software, like Zoom or Skype, you can interact with business partners thousands of miles away without stepping out of your office.
Web-based conferencing services have become a trend in the 21st century, eliminating the need for flying abroad to meet with clients.
Video conferencing may not be ideal for every situation, but it can save your business thousands of dollars in travel expenses. British telecommunications firm, BT Group, says the company saves approximately $259 million annually via virtual meetings alone.
Manage Ground Transportation and Accommodation
Your business travel expenses don’t only include flight, food, and accommodation. Even as your employees touch down in the destination city/country, there are ground travel expenses to manage. Manage ground transportation and accommodation with these tips.
Automate Booking of Rides
Automated booking of rides can save you time and costs. If you’re using multiple providers, where employees are booking rides through various apps, you’re wasting time and losing visibility to corporate ground spend. Instead, opt for a solution that will allow you to book all your rides on one platform and give you visibility into your expenses.
With HQ SummitGround’s easy booking, there’s greater accuracy, visibility, and automated payments. You no longer need to book rides from multiple platforms or contend with the implications of double bookings. Better still, you can compare prices for various riding options and get reports and real-time data on your ongoing rides.
Review Invoices and Reduce Billing Errors
HQ SummitGround can help track and report all your mobility spend globally and ensure you are correctly billed for the corporate rides. With our billing functionality, your invoices are automatically reconciled with any incorrect invoices automatically detected and flagged. Recent findings from one of our Fortune 500 clients have shown that we reduce over 20% of their travel costs by identifying incorrect invoices, double counting, and many other types of billing errors.
Stick to Tried and True Hotel Chains
If your company has a preferred hotel chain that fits its budget and your employees regularly book accommodation there, it’s advisable to stick to them. Many hotel chains provide special deals to their loyal customers, and you might qualify for these discounts. If your company is organizing an event, try to accommodate your employees in the same hotel to save time and reduce transportation costs.
Educate Your Employees
Again, booking accommodation early can come in handy, even if you’re a regular employee. In addition to booking in advance, you’ll need to remind your team about your company’s policy regarding their stay at the hotel. For instance, your employees need to know what’s covered and not covered by the company. Keep your employees informed of any travel policy changes and make sure they understand all the travel policy elements, especially pertaining to food and accommodation.
Business travel can be an essential part of running a business, but it can also impact your bottom line negatively if not managed most efficiently. By following these tips, you’ll be able to cut down on travel costs and gain more visibility into your company’s travel expenses.
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