We’ve long talked about business travel spend rising year on year, with it expected to reach $1.7 trillion in 2022. Where international corporate travel is substantially more costly than domestic travel, forward-thinking companies are looking for ways to reduce costs on international meetings without hindering business growth.
So to help you keep control of your workforce’s travel spending, here are four areas that could prove cost-effective without compromising revenue-generating activities.
Location, location, location
The destinations associated with business travel bookings often account for a big part of travel budgets in several ways: the cost of accommodation, the cost of transportation to and from meetings, and the cost of amenities in the area. Research has found that even spending time in particular airports (compared to others) can be extremely expensive. For example, London Stansted, London Gatwick and Amsterdam were found to be the most expensive based on the price of lunch, taxis, executive lounges, and parking expenses.
Using corporate travel booking technology that can predict costs by analysing previous expenses or fluctuating location costs will enable you to have insight into the most cost-effective options, in real-time. It helps to inform your employees’ choices at the exact moment they are booking travel. Similarly, having a system in place that tracks spend directly against business purpose such as a customer meeting or internal training day will help determine whether travel is even necessary – or if a remote meeting would be better for the company’s bottom line.
Meals eating into your profits
It’s reported that meals make up a significant proportion of employee travel expenses, some stating it’s up to 20%. This is followed closely by flights and accommodation. It’s not hard to understand why food and beverage can become such a major expense for businesses. Many travellers have been in a position of wanting to please customers or prospects in order to get a deal over the line, but quickly drive the cost of a meeting up as a result.
One simple way you can rein in spending is to define a corporate travel and expenses policy. Where some companies set a daily budget on food however, modern approaches to policy management take into account the potential revenue associated with the reason for spending. If you’re trying to close a multi-million pound deal, an expensive meal may be appropriate. Just as it might not be appropriate for a meal between colleagues only.
Having a system therefore that provides a travel forecast amount based on dynamic customer and revenue data, will help determine a realistic budget for future meetings. It will also ensure that corporate travel booking spend contributes to business growth. Submitting travel expenses against customers, opportunities, projects and so on is key to getting the relevant insight here.
Playing hide and seek with taxes and fees
This is one area that can be a major challenge when it comes to expenses incurred as a result of business travel bookings, especially because travellers aren’t likely to be as familiar with local customs and stipulations around taxes. Food and beverage taxes, city taxes, and other hidden fees can vary dramatically – even from state to state in the US – making it hard to accurately produce a trip-specific travel forecast. Similarly, if your employees live in a country where tipping isn’t necessary but they have to visit a place where gratuities of up to 20% are automatically added to bills, you may not realise how quickly spending rises.
Likewise, when reserving a hotel and reviewing the nightly rates, taxes and fees are not always included in the initial estimate. Instead they are only visible and charged at the end of the booking process. Again, this is where having a corporate travel booking system that presents hidden costs before you’ve booked will enable your employees to avoid being stung in these areas.
The cost of miscommunication
Sometimes, meeting overspend can occur simply because of miscommunication and duplication of efforts. If you’re working within a group to organise different elements of the same meeting, a lack of communication could lead to an inequitable budget distribution or overspending in several areas.
Ultimately, careful planning achieved through the adoption of a dynamic business travel booking system will enable access to real-time data on how your business is spending. It then allows you to predict and reduce costs associated with business meetings, international meetings in particular. By saving a fraction of what you currently spend, while still reaping the revenue-generating benefits of face-to-face meetings, you can squeeze even more value out of your corporate travel without compromising business growth.