10 Proven Strategies for Business Travel Cost Reduction

Effective management of business travel costs starts with a comprehensive company travel policy. Regular monitoring and analysis of expenses are also crucial. Companies can further reduce business travel expenses by utilising technology, negotiating corporate travel discounts, and making advance bookings with flexible itineraries. Continue reading to learn more.

 

Corporate travel drives business growth but can also be expensive. Global spending on business travel is expected to cross the $2 trillion mark by 2028. 

It’s no surprise to see organisations across industries seek out business travel cost reduction strategies. At the same time, companies cannot afford to sacrifice their employee’s comfort and safety while travelling. After all, employee satisfaction is as important as cost optimisation. Here are the top tips for reducing business travel costs.

What are Business Travel Expenses?

All costs incurred while an employee travels on behalf of the company come under business travel expenses. Since these expenses are related to business operations, all payments made by employees are usually reimbursed by the company. The most common types of business travel expenses include:

• Transportation such as airfare, train tickets and taxi rentals
• Accommodation for the duration of travel
• Meals and beverages consumed on the trip
• Event tickets and meals to entertain clients
• Miscellaneous expenses such as internet costs, parking fees, toll costs, etc. 

 

These costs can quickly add up, but they can be limited with the right business travel savings strategies. Check out the top ones:

Finetune Your Business Travel Policy

Having a well-defined business travel policy helps control corporate travel costs while keeping travellers safe and comfortable. Thus, it is beneficial for the company and its employees. To be effective, a business travel policy should outline the following:

 

Maintain Open Communication Channels

Employees need to be fully informed about company travel policies to avoid issues like overspending or booking non-preferred hotels. If they aren't aware of spending limits or preferred accommodations, they may unknowingly incur costs that the company might only partially reimburse. This can lead to dissatisfaction and confusion.

To prevent this, ensure the travel policy is accessible to all employees in a clear, written format. You can store it in a shared database or distribute printed copies to department heads. In addition, any updates to the policy should be promptly communicated via email newsletters, infographics, or company-wide announcements.

Negotiate Corporate Discounts

If the company’s profile is such that it demands frequent travel, you may be able to get corporate rates for flight and hotel bookings. This could be in the form of discounts or access to other add-on services. 

For example, corporate hotel bookings may be inclusive of breakfast and one main meal. This helps lower corporate travel costs by cutting down on meal costs. Similarly, you could negotiate a deal that includes free upgrades, waiving extra baggage fees, free Wi-Fi and last-minute cancellations. Flexible check-in and check-out can be helpful for people travelling on red-eye flights. 

Discourage Last-Minute Bookings

As the date of travel draws nearer, tickets become more expensive. Hence, advise team leaders and managers to avoid last-minute travel. Encourage them to plan work trips at least a month in advance. This allows you to book tickets at a cheaper rate.

myBiz allows you to identify the perfect advance purchase window (AP window) for maximum savings based on travel data and you can easily curb unnecessary last-minute bookings by establishing a waiting period of a few hours between submitting a travel request and confirming bookings. 

Whenever possible, also encourage teams to consolidate meetings. For example, let’s say you have 2 clients in Delhi. Rather than travelling to meet them on 2 different occasions, try to hold the meetings on consecutive days. This may necessitate an overnight stay, but it may still work out cheaper than 2 round-trip flights.

Leverage Technology for Travel Management 

Booking platforms and travel apps have made it easy to manage different aspects of travel on a common dashboard. Rather than sift through emails, travellers can access flight tickets, hotel bookings and even local taxi services from a common platform.

Using a comprehensive booking platform allows employees to compare prices from different airlines and hotels on a one-stop solution before making a booking. Look for a platform that gives you access to special corporate fares and an integrated approval and reimbursement mechanism. The option to accept payments directly from the company wallet can also help streamline the booking process. These platforms can also automate expense reporting to reduce the need for paperwork and minimise the risk of error.

Companies can also leverage technology to collect and analyse data. By analysing data from booking platforms and expense-tracking applications, businesses can evaluate partner performance to negotiate better deals and identify opportunities to prevent overspending.

Make Last-Mile Travel Arrangements 

Small costs can snowball into quite a large amount. After your employees reach the airport, they must travel to their hotel or client’s meeting location. In most cases, travellers book a taxi or other local transport. This may subject them to paying surge fees.

Instead, it may be better to have local transportation tie-ups in frequently visited cities. Companies can also negotiate rates for airport pick-up and drop-off facilities with hotels as part of a loyalty programme. This helps cut business travel expenses and save time that would otherwise be spent waiting for taxis. 

Explore Alternative Accommodation

Hotel bookings account for a sizeable chunk of all business travel expenses. It can be as high as 34% of the total travel expense.

You can reduce this by limiting luxury accommodation and negotiating corporate rates. Signing up for loyalty programmes can also make businesses eligible for free nights and upgrades. Other effective business travel budgeting tips associated with accommodation include booking rooms in bulk, limiting peak season bookings, and making advance bookings. 

When it comes to business travel savings strategies, it is also a good idea to look into alternative accommodation. For example, service apartments or guesthouses may be better suited to employees requiring an extended stay in a city. Service apartments are also a good choice for groups travelling together. This is not only cheaper but also often gives travellers access to a kitchen and laundry service.

Anticipate Ancillary Charges

In addition to flight, hotel, and meal costs, several other expenses must also be accounted for. Employees travelling overseas may have to pay extra roaming charges or buy Wi-Fi packages. Service fees, such as laundry and tips paid to hotel housekeeping teams, may also apply. Anticipating these costs beforehand can help you allocate an amount for such expenses.

Similarly, your employees may have to meet clients or pick up the cheque for a meal. There may be an unexpected site visit requiring additional local transportation. 

Here’s a tip - if your employees must take a client out for a meal, lunch is often more budget-friendly than dinner. 

Support Employee Productivity on the Road

Balancing costs isn’t just about business travel cost reduction but also increasing business travel ROI. By giving your employees the tools and support required to be productive on their trip, you can offset the expenses with higher profits. Here are a few tips.

 

Monitor and Analyse Travel Expenses

To be able to cut business travel expenses, you need to regularly monitor travel expenses. Ideally, the travel platform should automatically log booking expenses and let team managers track requests and approvals in real-time.

Analysing these reports can help identify:

• The average daily expenses in each city
• Which departments and employees are overspending their budgets
• The most frequently used vendors, etc.

You can also use these reports and analyses to adjust budgets in your business travel policy and negotiate better rates with preferred vendors. 

 

Even with all the currently available virtual meeting tools, some meetings must be conducted in person, which requires the employees to travel. Hence, business travel cost reduction is critical for businesses of all sizes. To get the most value for your money, you need to pay attention to both larger expenses like flight and hotel bookings and smaller expenses such as a taxi ride and Wi-Fi packages. 

Using a consolidated booking platform can be a significant help. It streamlines the request and approvals process, automates reports, and makes data available for analysis. Try the travel solution platforms like myBiz to experience the benefits firsthand. 

Frequently Asked Questions

 

Q1. What is one of the top corporate travel cost-cutting tips for international travel?

Ans. When travelling abroad, pay attention not only to flight timings and prices but also to the airport. Choosing an alternative airport rather than the main airport may get you cheaper tickets. 

Q2. What are some of the most effective group business travel savings strategies?

Ans. Groups can reduce business travel costs by booking service apartments instead of hotel rooms, renting a multi-passenger vehicle instead of cars, and opting for catered meals instead of ala carte options, among several other measures. 

Q3. How does insurance influence business travel cost management?

Ans. Insurance helps lower corporate travel costs by making funds available for any unexpected instances. For example, it can be used to cover flight cancellations and delays. This can also protect the business from any potential liabilities if an employee is injured while travelling on behalf of the company. 

Q4. Can virtual meetings cut business travel expenses?

Ans. Encouraging virtual meetings can help with corporate travel savings by reducing the number of tickets and hotel stays to be booked, as well as other associated costs. However, when it comes to high-stakes events, in-person meetings may be more effective. 

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