How to Save Money on Business Travel
When you’ve got more than a few travelling employees, saving money on business travel can seem nearly impossible. Escalating travel costs certainly don’t help the situation. Whether meeting clients, attending tradeshows or visiting vendors, there are many reasons why business travel is a costly, but necessary expense for many companies.
Believe it or not, you can save money on business travel without sacrificing the comfort and safety of your employees. It involves strategic thinking and buy-in from employees – not just top-level management. Here are some smart tips on how you could save money on business travel.
Five Tips for Corporate Travel Cost Savings
1. Identify the Best Time to Book Airfare
Flights and add-ons can sometimes be the most expensive part of a business trip – especially if you plan to send employees travelling internationally. So, how could you save money on airfare? Booking at the ‘right time’ is a great start. However, there are many theories as to when the ‘right time’ actually is. Some people suspect it involves booking way, way in advance, while others suspect it involves booking last-minute. According to data collected by Investopedia, the ideal booking range is somewhere between four months and three weeks before departure. Booking on specific days of the week offers few savings, though flying out and returning on Tuesdays and Wednesdays may provide the best value. Of course, the time of year and demand are also major factors in determining price. The key is to be flexible with your plans.
We know travel plans can spring up last minute. We also know that last-minute travel often means the highest airfare. You could offset the cost of higher airfare by ditching extras offered by the airport and airline. As hard as it may be, consider doing without:
- Airport parking
- Airport lounges
- Checked baggage
- Business/First/Premium class
2. Location, Location, Location
Employers could encourage employees to book accommodations near their obligations. For example, if a meeting or event is occurring at a hotel conference centre, then book a room at that particular hotel. Staying closer to scheduled events means there is reduced need for rental cars and taxi-type services.
One of the top travel cost reduction strategies for businesses could also involve efficient routing. That means one long trip might be more efficient than several small trips. Consider grouping several nearby destinations into one trip, rather than sending your employees out multiple times.
3. Save on Ground Transportation: Rental Cars vs. Ride Hailing Apps
As your employees go from one meeting to the next, you want them to be comfortable and prepared. Part of this process is a seamless journey from accommodation to destination. Rental cars offer privacy and additional space. Ride-hailing apps like Uber and Lyft reduce liability and get one to their destination without having to worry about directions. Both are convenient in their own ways. But which is more economical? Let’s compare.
Rental Car: Sundance Vacations claims that the average economy rental car costs $45-65 USD per day. That means a seven-day trip could cost anywhere between $315-450 before gas or add-ons like insurance.
Ride-Hailing: Using the price estimator tool by Uber, we can see that the trip from Toronto Pearson International Airport to the Metro Toronto Convention Centre, typically a 25-minute drive, would cost a minimum of $38, one-way.
So, the answer? It all depends. For longer trips with scattered events, a rental car may make more economic sense. For shorter trips with destinations close to your accommodations, using a ride-hailing service may make more sense. However, ride-hailing services may be scarce, or entirely unavailable at a destination or in a region, so it is best to check on this before deciding.
4. Incentivize Staying on (or Below) Budget
When it comes to business travel, a significant cost for an employer are employee expenses. It can involve things like meals, ground transportation and entertainment. Although you should have the parameters laid out in a corporate travel policy, when an employee reaches the upper end of the limit regularly, it can add up considerably.
You may be able to achieve corporate travel cost savings by incentivizing your employees to remain under the ‘per trip budget.’ Consider sharing some of the savings with employees by giving them a gift card for personal use or another valuable item of your choosing. By doing this, you can also encourage savings on future trips.
5. Is the Travel Necessary?
No matter how great communications technology has become, nothing can replace face-to-face interactions. However, with programs like Microsoft Teams and Zoom, sending employees away on a plane for every meeting is unnecessary. As an employer, you may want to prioritize business travel for occasions that will give you the most value. For some, it can be as simple as a quarterly check-in with clients. For others, it could be physically putting pen to paper on a big deal. It entirely depends on what is most important for your business’s long-term goals.
How a Corporate Travel Policy Can Help You Save Money and Streamline Processes
If your company does even a small amount of business travel, having a corporate travel policy may help. This document may help to manage costs, the employee experience, safety, and liability. It streamlines the process for both employers and employees – from start to finish. How so?
- The reimbursement process: Gives employees proper direction on where to submit receipts for reimbursement
- Clarity on booking channels: Save your employees time by letting them know where to book flights, accommodations, rental cars and more for their next business trip
- Knowing what to expense: Dinner at a fancy steakhouse or a meal at a fast-food drive-through? Provide employees parameters on what they can expense when it comes to things like food, entertainment and more
Read more: How to Revamp Your Corporate Travel Policy
Saving money on business travel might seem difficult, but it is possible with a smart strategy, and collaboration between top-level management and your travelling employees. Considering the tips outlined in this guide could help promote savings without causing undue stress and discomfort your employees.