26 Oct 2022, 13:35 — 10 min read
Corporate travel is a crucial aspect of any business. Despite the evolution of technology and the growing popularity of remote-working jobs, there's no substitute for physical presence and face-to-face interactions. This is what most business travel trends indicate.
Corporate travel facilitates business initiatives related to skill development, training, networking and recruitment. However, the dynamics of corporate travel has undergone a sea change in the post-pandemic era. This has thrown a wedge at your business travels, thanks to intermittent lockdowns all over the world. Rise in fuel costs has led to an increased cost of travel. Moreover, travel is limping back to normalcy post Covid-19. According to Reuters 2021, business travel expenditure is expected to hit the $1.4 trillion mark at the end of 2024 and is most likely to fully recover from the pandemic by 2025.
Under these circumstances, companies are facing the challenge of cutting down travel costs without compromising on employee's wellbeing and comfort. All you need is a bit of common sense and the ability to stay informed and updated on all the great travel deals out there. Let us guide you through some of the strategies that'll ensure your company's travel expenses don't shoot up to unprecedented levels.
"Plan ahead" is the mantra when it comes to setting up a cost-effective corporate travel itinerary. You can't go wrong with a well-planned and proactive approach. This holds true for most aspects of corporate travel so that you book your flights at the right time, choose hotels with good deals and offers.
Prices are bound to increase dramatically as the travel date inches closer. Last-minute bookings can cost you a bomb! Airline companies and hotels hike their prices as they know it's an urgent need and people will be compelled to book even paying extra amounts. Moreover, take into consideration as to who is covering your client meeting. If there's already an employee present at the location, it doesn't make sense to make another one travel hundreds of miles to a meeting.
You may hire a corporate travel management service to help cut down the overall budget. They create customized travel programs and services that saves time, money and stress. Check out this guide to corporate travel management that'll give you a fair idea regarding how a travel management company works, what to expect from them and what are the common issues encountered when you team up with these companies. Besides helping you get preferential rates on hotels and airfares, they come up with lucrative deals, on-site promotions and offers.
Contrary to popular belief, a travel management company may not necessarily be a travel agency. They encompass online booking tools and software companies that offer self-booking platforms alongside round-the-clock travel support. You may choose to delegate certain sections of the travel plan to them or take a backseat and let them set up the whole itinerary for you.
Airline booking can be quite an expensive affair, especially if you're not aware of little hacks and tweaks that could make a lot of difference in the booking prices. Airfare amounts to 17% of the total travel budget. Keep an eye on budget flights. Opting for business class travel may be more of a luxury than a necessity. It would be prudent to choose economy class, more so when your employees are traveling in groups. If scheduling isn't an issue, try to shop on a Tuesday after holidays since experts claim that's the best time to book.
Go through fare comparison websites to seize the most effective deal. You could end up saving a great deal by being flexible on the airline you use and the date of travel. Try to stick to a fixed travel plan once you've done the booking. If you opt for flexible tickets with option for return dates, it may add to your expenses. Moreover, look for messages and notifications for discounted rates and airline promotions. This could massively reduce your travel cost.
A huge chunk of corporate travel expenses can be attributed to hotels and lodging. As a savvy business owner, you ought to introduce policies for accommodations that would work around a limited budget and specific star ratings. This will help your staff look for accommodations with the best possible value without crossing budget threshold. While room rates may vary even within the same hotel, some hotels offer promotions on various websites where rooms can be availed at discounted rates. You need to stay alert to keep a tab on such fluctuating prices.
Interestingly, over the years, corporate travelers have become open to staying at unconventional accommodations instead of traditional hotel chains. Small boutique hotels and home-like lodging, offered by AirBnb, are quite popular among new-age business travelers. In fact, 74% of millennial corporate travelers have stayed in vacation rentals and are looking forward to doing the same. Besides offering rooms at economical rates, they provide opportunities for exploring new destinations in new ways.
An effective strategy is to set a threshold limit for food, transportation and other activities. This is often referred to as a general budget for corporate travel. Once you've set an upper limit, you can allow your employees the freedom to decide how they can utilize this budget.
Most employees would be happy to plan their daily expenses around the budget. They should be able to choose what they want to have for breakfast, lunch and dinner, keeping in mind the meal allowance for each day. This would eventually turn out to be a win-win situation for the employees who can avail services of their choice as well as for employers who feel comfortable and assured with the limit they've set.
As far as transport is concerned, encourage them to opt for the most cost-effective mode of transport, factoring in the journey time. Many employees use their own vehicles to travel to and from their designated workplace, reimbursing the cost on return.
Every company works around a well-defined corporate travel policy. However, this policy needs to be updated every few years so that it stays relevant with the changing times.
A lot can slip through the net when setting guidelines for flight bookings, meal allowances, local transport, itinerary expenses and so on. It doesn't harm to revamp your existing corporate travel policy to ensure it is robust enough to accommodate every aspect of travel. Take care of the fundamentals first. This includes a hassle-free pre-trip approval process, booking guidelines, hotel reservation process, on-site expenses. Chalk out clear procedures that'll ensure your employees are able to make decisions within the rules of the policy. Activities outside the realm of corporate travel should be marked as personal/out-of-pocket cost. Only those activities which pertain to your immediate business affairs should be eligible for reimbursement.
The logic is simple. If your employees aren't spending their precious working hours organizing the trip, they're more likely to devote their time to doing the actual work, which will eventually benefit your company. Ensure every stage of the journey is meticulously planned and organized so that their productivity stays on top during the trip and you incur minimal unnecessary expenses. Companies often employ software tools that sync employees' travel itinerary from the main database with their smartphone calendars, providing them crucial travel details just at the click of a button.
Another effective way is to set an agenda for the day and ask for work progress or output within a specific deadline. This result-driven approach will make business travel more purposeful. Moreover, sharing local information with your employees will save time and effort on their part, thus giving them more time to get on with their work while they're on the road.
Corporate travel planning doesn't have to be a stressful task. With the right attitude, a well-rounded policy and meticulous arrangements, it can be taken care of with relative ease. Travel itself is no longer what it used to be. Companies are slowly adapting to the changing dynamics towards business travel. By following the points mentioned above, you can make ample savings on corporate travel costs. However, the needs and demands of every business are different.
Let us know in the comments section below what are some of the other ways in which you save money on corporate travel.
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Posted byDaniel Quintero
Daniel Quintero has been working with digital content for the past 2 years. He has a degree in International Business and is a content partner specialist from Valencia, Venezuela....