How to save business travel costs
For you as a corporate, you probably already know that the largest cost-block after personnel are travel costs followed by costs for lodging.
For you as a corporate, you probably already know that the largest cost-block after personnel are travel costs followed by costs for lodging. The Global Business Travel Association (GBTA) has recently reported that business travel spends continue to increase by 7% for the rest of 2018. Therefore, reducing costs is the main priority for travel managers all around the world.
On the average trip, companies spend about $949 for domestic and $2,600 per person for international trips. Guess how much of these costs are above the predefined budget?
The correct answer is one third. One-third of the business travel spend and expense budget is overspent.
In most cases when a traveler is spending too much, it is not because of the traveler but most likely because of missing policies and guidelines.
Just imagine: You are a business traveler and your costs for the trip are going to be reimbursed anyway. Would you personally care about reducing costs? Probably not.
The expectations of young business travelers are high when it comes to their hotel stay. Millennials like to decide which hotel they want to stay in and expect it to be equipped with the latest technology. As a corporate, you usually have two options on how to reduce costs: Either you have strict policies about what business travelers can spend their money on, resulting in dissatisfaction or letting your employees spend as much as they want, which ultimately results in high costs. Having both sounds unrealistic, doesn’t it?
Luckily, there are ways to effectively cut costs that do not necessarily require a lot of effort for corporates.
We prepared some ideas for you on how to save money on the next business trip:
Corporate Travel Policy
Creating, renewing as well as optimizing a corporate travel policy is the first step to reduce costs. A corporate travel policy includes all the regulations about the business trip from booking flights, meal allowances or payment methods. Setting clear procedures will help to keep your employees safe and at the same time keeping your expenses low. As market needs constantly change, it is important that you check and update your policy regularly to avoid any financial losses.
Your company does not have a corporate travel policy yet? Then, creating one should be a high priority for you from now on!
Carlson Wagonlit Travel provides a step by step guide, check it out here.
Cutting down flight costs
When you travel for business, last-minute bookings are unavoidable. But if you have the possibility to schedule a trip in advance, you should do so and be flexible about time, date and the airline. Another way is to get alerts about airfare promotions and discounted rates.
It is suggested to renew the corporate travel policy and give personnel more freedom. Rather than discipline employees for spending too much money, many companies reward the travelers who kept their costs under the predefined limit. This is a way to save costs without upsetting your employees. In case, your employee meets the budget line, you can reward him with gift cards or discounts. It does not only save costs but also creates a culture of sensitivity where people pay attention to what they are spending their money on. As you could see from our example above, it is very easy to encourage your employees to reduce their spendings and rewards could be one way to make them do that.
The number of smartphones continues to increase year by year. Business travelers are taking their mobile phone wherever they are. Companies are increasingly implementing mobile payment systems into their processes. That is why it is important to consider allowing your employees paying mobile. It does not only benefit the business traveler but also you as corporate, because it is easier and fast to use, resulting in more time for the actual purpose of the work-trip. Apart from that, when using virtual payments you get real-time information about travel spend. In contrast to a cash payment, mobile payment is much cheaper and easier for you to put a limit on what your personnel is allowed to spend. With mobile payment, you have valuable information in your hands that enables you to understand the travel habits.
Technology solutions such as conichi, helps you to keep the travel spends in check and allows business travelers to have both private and corporate credit card information saved in our web-based solution.
Find out more about the benefits of mobile payment in our blog post.
These are only some ways for you to increase your savings. As companies are all different in size and nature, you have to decide what measures you want to consider. Create your own recipe and keep your spendings down!