It costs roughly $990 to $1,293 to go on a three-day domestic business trip. Although spending is necessary for business travel management, travel expenses can negatively influence the company’s net income, particularly for small businesses. Basically, a business travel market spends over a trillion USD of someone else’s funds. Simply put, business travelers are employees who are not using their own money; they are using the company’s budgets.
Employees don’t deliberately aim to splurge money on corporate travel-related trips. But they also don’t have an excuse or reason to save. Hence saving on budgets for corporate travel may seem daunting, particularly if your staff needs to fly to various destinations all year. The estimate of an overseas corporate travel cost is often $2,600 or more occasionally.
Still, small businesses can find ways to reduce expenses without sacrificing the safety and comfort of their traveling employees. Here we curated some of the most effective strategies for reducing your company’s corporate travel costs.
7 Simple ways to reduce travel costs
#1 Seek services with multiple options
Research and look for corporate travel services with an extensive flight inventory for your small business. Be careful when choosing flight tickets because they can be overpriced. If you have travel plans, choose an inexpensive airline, have flexible dates, and stick with economy flights. So, you can save plenty of money.
Unless actually required for a travel plan, get flexible flights that allow you to pick your return ticket. If other options exist in your region, consider them as well. Possibilities include trains as they are frequently cheaper. Besides, you can complete tasks on your desktop while traveling.
#2 Set up a multi-tiered approval system
Putting a mechanism in effect to manage booking authorization is among the easiest methods to save small business travel costs. By communicating who approves a trip, you won’t face the issue of cancellations after booking, resulting in wasteful spending.
Create a booking tool online provided by your travel management company and use it to the fullest extent possible. It allows more control over your small business travel plans. You can decide whether employees can make accommodation and travel reservations using a suitable platform. Then you can conveniently keep track of all employee travel bookings. That way, you can respond right away to their requests.
#3 Streamline your company’s corporate travel policies
It’s essential to have a corporate travel management policy. Implement processes for expenditures, bookings, and fees while on the travel booking platform. Establishing specific rules can support your company users in making choices that adhere to company guidelines and avoid incurring extra expenses that impact your revenues negatively. Your traveling executive may not understand whether an upcoming trip complies with the spending plan without set rules and regulations.
Check your current small business travel policy carefully to ensure it covers all the guidelines necessary to support any eventuality in travel expenses.
#4 Reserve in advance
While we understand that sudden travel plans are occasionally part of work, if you can organize the itinerary date much ahead, you may save a ton of money. That’s the cardinal rule of cutting costs for small businesses. Booking rooms and tickets in advance is usually a good idea when traveling for business because the prices will rise as the date gets closer.
#5 Rewards and incentive schemes
Your employees can help you save big money when they choose a cost-effective way to travel.
Thus, the expense saved by the company can build up over time. So offer your employees a reward for making additional savings. Recognize the ones that help you save money on travel and accommodation. Incentivize them with a gift card to a preferred retailer, a percentage of the money saved, or even vacation or days off.
Most hotel chains and airlines provide complimentary rooms or plane tickets as incentives for a loyal clientele. They call it the “frequent travel rewards” or “frequent flyer program.”
While it is not realistic for big businesses to include such rewards in their travel budgets, small businesses can apply them to save expenses by tens of thousands of dollars annually.
# 6 Maintain a reasonable budget for food and logistics
Allowing your small business employees discretion on their expenses for travel and meals may eventually help encourage responsible spending. For instance, a corporate traveler can decide what amount they will spend on meals when the company fixes a per-day food allowance.
Of course, you can anticipate outliers, so plan to save those five-star restaurant wine-and-dine meals for your most valuable client appointments. A small business may urge staff to adopt the most affordable method by asking them to use shared taxis, public transport, or Uber wherever possible. You can also pay your employees who use their personal automobiles.
#7 Reduce accommodation expenses
If your company’s travel strategy bases itself on a few preferred hotel brands, you might lose out on the best deals and steals. When you spread your possibilities and alternatives to booking with serviced apartments for extended stays or Airbnbs, you can save money and improve the traveling experience for your staff.
Sometimes, even with the same hotel, room prices differ. So planning ahead can result in significant benefits. You can allow your business travelers to pick their own accommodations. That’s great, but be careful to specify a price cap. Additionally, you may mention that standard rooms are the mandatory accommodation category and indicate upfront if you’ll ever be paying for minibar expenses, Wi-Fi service charges, etc.
A report predicts that the worldwide business travel industry will increase at a compound annual growth rate of 7.88% with around $1.5 trillion in value from 2022 to 2027.
Obviously, a small business would want to make the most of its corporate travel budget. Finding the information on the right platform will not be difficult.
To reduce the burden on staff time, choose an online travel application like Itilite that can connect with an expense management system and create data automatically. Utilize this information to detect patterns and gradually improve your spending. You can control total trip spending by determining which locations and itineraries require smaller budgets.
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