Cutting Corporate Travel Expenses: Strategies For Smart Savings

Corporate travel expenses can be a headache for businesses, but there are ways to cut down on costs without compromising employee satisfaction or safety. Firstly, it's important to have a robust business travel policy in place with clear approval processes and guidelines on bookings, reservations, and expenses. Encouraging employees to book in advance and be flexible with travel dates and airlines can also help reduce costs. Consolidating trips by choosing a region and booking multiple trips in the area simultaneously is another effective strategy. Additionally, companies should take advantage of travel reward programs and negotiate corporate rates with vendors. Having a streamlined booking process and providing employees with spending guidelines can further ensure cost savings.

Book in advance

Booking in advance is one of the most effective ways to cut corporate travel expenses. Last-minute travel can be unavoidable in business, but when you have the opportunity to schedule a trip ahead of time, it can result in huge savings.

An analysis by Concur found that tickets booked fewer than seven days before departure cost an average of 44% more than those booked 15 or more days in advance. Similarly, travel management company Concur found that by booking at least eight days before departure, businesses can save an average of $148 per ticket. Airfare is increasing by an average of 2.6% in the coming year, so last-minute bookings are not an option.

Most airlines offer lower prices and discounts for flights booked in advance. To make this a company practice, set a timeline for airline reservations that employees must follow. Successful firms have implemented rules where employees must book their tickets at least two weeks in advance.

Booking in advance also helps to secure the best options for your employees' comfort. For example, if you have a frequent traveller in your team, they may prefer the window seat. By booking in advance, they can ensure they get their preferred seat.

Additionally, planning ahead gives you the opportunity to compare prices across different airlines and accommodation options. This allows you to make informed decisions and choose the most cost-effective options.

Finally, booking in advance reduces the stress and hassle of last-minute planning. It gives your employees peace of mind and ensures they can focus on the purpose of their trip, whether it's a client meeting or a conference.

By implementing this strategy, your company can significantly reduce travel expenses and provide a more pleasant experience for your employees.

Use travel rewards programs

Travel rewards programs are a great way to cut corporate travel expenses, especially if your employees are frequent travellers. These programs are usually free to join and can be extremely beneficial to your business.

Airline Rewards Programs

Almost every airline has a frequent flyer program that allows members to earn points and redeem them for discounts, free checked bags, lounge access, and more. For example, the Delta SkyMiles Gold American Express Card earns 2X miles at restaurants worldwide and on purchases made directly with Delta. If your employees travel often, it would be a good idea to sign up for the rewards program of the airline they use the most.

Hotel Rewards Programs

Hotels also offer loyalty programs that reward guests with free nights, complimentary meals, and other benefits. For instance, Hyatt hotels have a rewards program where customers earn points whenever they book a visit, and these points can be redeemed for hotel stays, spa visits, and other perks. They also offer free WiFi and discounted rates.

Credit Card Rewards Programs

Another way to take advantage of travel rewards programs is by signing up for a travel credit card. These cards allow you to earn points or miles on your purchases, which can then be redeemed for travel-related expenses. Some cards offer flexible rewards that can be redeemed through a variety of partner airlines and hotels, while others are co-branded with a specific airline or hotel chain. For example, the Capital One Venture Rewards Credit Card offers 300 USD in annual statement credit for travel purchases, and you can earn extra redeemable points when using this card.

Business Reward Schemes

Business reward schemes are another way to save money on corporate travel expenses. These schemes are usually free to join and offer points every time you make a booking. Once you've accumulated enough points, you can redeem them against the cost of airline tickets, upgrades, hotels, and car rentals.

By utilizing travel rewards programs, your business can save significantly on corporate travel expenses. It is important to choose the right programs that align with your travel patterns and spending habits to maximize the benefits.

Avoid unnecessary add-on fees

When it comes to corporate travel, there are many additional fees that can add up quickly and hurt your bottom line. These include things like seat upgrades, checked baggage fees, in-flight meals, early boarding fees, and "preferred" seat charges. In 2014, the average passenger spent $17.43 on these types of extras, an increase of 8.5% from 2013. To avoid unnecessary add-on fees, there are several strategies your company can implement:

Firstly, educate your employees on what expenses are and are not covered by the company. This includes clear guidelines on spending caps, meal allowances, and baggage allowances. For example, specify that employees should only book standard rooms and outline whether they can expense minibar charges, Wi-Fi costs, and other incidentals. Additionally, advise employees to limit room service and avoid hotel restaurants, as these tend to be pricier.

Secondly, enforce a pre-trip approval process. This ensures that there is oversight on travel arrangements and reduces the likelihood of last-minute cancellations, which can trigger wasted expenditure. It also helps to have a preferred travel management company that employees can book through, as they often include trip approval processes and provide tools to monitor bookings.

Thirdly, encourage employees to book their travel in advance. Last-minute bookings can be significantly more expensive. Implementing a rule where employees must book their tickets at least two weeks in advance can help curb expenses.

Finally, consider partnering with airlines and hotels to negotiate corporate discounts and preferential rates. This can include waived cancellation fees and extended cancellation deadlines, and other perks. By developing a good working relationship with vendors, you can take advantage of corporate negotiated rates (CNRs) and maintain control over your spending.

Compare travel options

Comparing travel options is a key way to cut corporate travel expenses. Here are some tips to help your company save money in this area:

Firstly, it is important to have a clear and comprehensive travel policy in place. This should include guidelines on spending, bookings, and expenses. Such a policy will help employees make cost-effective decisions and avoid unnecessary expenses. It is also important to ensure employees are aware of the policy and are involved in any periodic reviews. This will increase their buy-in and willingness to help the company achieve its travel management objectives.

When it comes to flights, there are several strategies to keep costs down. Firstly, it is always best to book in advance. Last-minute bookings tend to be significantly more expensive. Most firms that have successfully cut travel expenses require employees to book at least two weeks ahead of time. It is also a good idea to avoid business class unless absolutely necessary. Employees should also be encouraged to book on the cheapest day, which is usually Tuesday afternoon. In addition, it is worth signing up for airfare alerts and using price comparison websites to find the best deals.

When choosing an airline, consider partnering with a specific carrier. This can lead to corporate discounts and negotiated rates for your employees. It may also come with additional perks, such as extended deadlines for ticket cancellation.

For accommodation, it is again important to book in advance. It is also worth considering whether to let employees choose their own accommodation, providing a budget threshold or star rating, or whether to take control of the booking process. If you opt for the former, make sure to set clear guidelines on what will be covered by the company, such as minibar charges and Wi-Fi costs. If you choose the latter, research will pay off. Contact multiple hotels and ask for their best prices, and consider sticking to tried-and-true hotel chains that are likely to offer loyalty discounts.

Finally, don't forget to consider alternative options to travel. Could the meeting be held virtually? Or, if your employees are travelling to a region with good public transport links, could they take the train instead of flying? These options could save your company a significant amount of money.

Centralise spend management

Centralising spend management into one system is a great way to keep track of spending and gain control over your corporate travel expenses.

Firstly, it is important to have a good way to track spending. A centralised system with integrated corporate cards and travel management tools can be a game-changer. This will allow you to accurately project how much you will be spending for the year and make informed decisions about what and where to cut.

There are many benefits to using a centralised system. Firstly, it allows you to keep all your data in one place. This includes data on trip expenses, such as airfares, as well as non-trip expenses, such as business meals. This gives you full visibility over your travel arrangements and helps you make the right decisions to reduce costs.

A centralised system can also help you to manage multiple rides at the same time. For example, you can use a corporate Uber account to manage rides for your employees, which is often cheaper than other ground transportation options.

Additionally, a centralised system can provide virtual cards with embedded policy compliance and real-time spend tracking. This helps you to stick to your budget throughout the year and make well-informed financial decisions.

Finally, a centralised system can automate travel policy implementation and provide clear insights into costs. This saves you time and money and helps you to manage all your expenses in the same place.

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