We all love saving money on travel, but many companies don’t have an effective and ongoing plan to manage this major expense. Factors like company size, industry, trip volume, and employee demographics all impact your travel policy. Whether you’re a start-up or a multimillion-dollar corporation, finding the budget to pay for key travel opportunities can be as simple as working with a professional travel management company to spend more intelligently.
Employees can sometimes purchase their flights, hotels, rental cars, and meals without a care in the world, assuming the company will handle it. Managers can’t always find time to scrutinize every line item, and they don’t always know where to look for smart savings. A few examples of where companies “miss the mark” when it comes to understanding travel expenses:
Opting for a luxury hotel over a mid-range room.
Your staff may sometimes treat themselves to high-priced luxury hotels that don’t offer added-value extras like free breakfast and often charge extra for that business travel basic: wi-fi. Mid-priced or “value” hotels usually offer free wi-fi and breakfast, along with perks like fitness centers and free parking. By negotiating rates at value-branded properties close to frequent destinations, you’ll also save on transportation expenses. You may also consider allowing a maximum hotel rate, with exceptions for expensive cities like New York and San Francisco.
Waiting until the last minute to book flights & hotels.
By making travel arrangements 14 days or more prior to travel, employees have access to significantly lower fares, more seat availability, and better hotel rates.
Always choosing the lowest car rental rate, regardless of vendor.
Approximately 40% of car rental expenses are costs other than the daily rate, such as surcharges, refueling costs, energy fees, insurance, etc. Better to negotiate a competitive rate program with a primary vendor that minimizes all of the “hidden costs” of car rentals and will often provide additional perks such as complimentary upgrades and free days.
Always booking flights online, regardless of the complexity of the trip.
Especially if it’s an international itinerary. By using a skilled agent on a complex trip, a traveler could save a significant amount of time for a slightly higher agent fee. Also, a skilled agent may offer different routing, or may issue multiple tickets which may result in a lower fare.
The value of investing in business travel can be felt in a number of ways across your workforce. Identifying savings opportunities starts with a deeper understanding of what your company is spending in key areas.
Cost Cutting Checklist:
- Book air in advance – the cheapest fares go first! A minimum 14-day advance purchase is a good benchmark.
- Create simple spending guidelines – Create a reasonable policy that employees will follow willingly.
- Promote affordable travel strategies – Encourage compliance while nurturing productivity.
- Negotiate or refine your corporate deals with hotel and car rental chains in your frequent destinations for the lowest rates and reduced surcharges.
- Consolidate spending with a travel management company to get the most bang for your buck.
- Enroll in a “soft dollar” airline program that can earn your company points to exchange for tickets or free upgrades without sacrificing travelers’ personal perks.
Business travel expenses can pile up quickly, so a comprehensive reporting tool becomes important when you’re making an effort to achieve cost savings. A travel management company can not only provide you with data tracking, but also analyze how your company can further reduce travel costs without sacrificing the revenue that comes along with business travel.
Content provided by Travel Leaders Group.