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6 ways your business can save money on travel

6 ways your business can save money on travel

Global business travel spend is expected to reach 1.1 trillion euros by 2020, and it falls within the top 5 expenses of businesses of any size. Hacking at the monster expense of business travel can help increase profitability.

But it’s not easy. Saving money on business travel requires effort from all employees, not just a new top-level approach. From the finance manager looking to reel in yearly costs, to the travel manager bogged down with details and wanting to please coworkers, to the weary traveler who may feel the need to spend more in a pinch—this is a team effort.

We’ve put together a list of clear, useful ways to get your whole team on board.

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1. Encourage flight flexibility

When employees are headed to another city, chances are it’s a necessity. Sometimes, videoconferencing just won’t cut it.

“When business people are able to interact directly, that action eliminates common miscommunications, brings body language and emotional cues into the conversation and speeds up the transfer of ideas.”

Tony Tie

Whether the employee is visiting a client or staffing a new office, there may be some flexibility in the dates of the event. When a travel manager, office manager, or executive assistant is booking a new trip for an employee they need to know if there is any wiggle room. And there almost always is.

Discovering that wiggle room can mean saving as much as 50% on flights and hotels. So, encourage employees to be proactive about trip flexibility:

  • On a standard request form for new bookings, ask for 3 arrivals and departures in order of preference so employees can give options up front
  • If employees request via email, the travel manager can ask for more information about trip flexibility and request that next time, the employee include this info in the email
  • Make it clear that being flexible should be the norm but of course allow for rigidity when valid
  • Allowing employees to book their own travel via a corporate booking tool will help travelers get more visibility and control, allowing them to optimize their schedule to save money without all the email back-and-forth

2. Get access to lower and better flight inventory

One of the absolute best ways to immediately start slashing travel costs is to get better flight inventory.

Businesses that use corporate travel agents or that partner with carriers are missing out big time.

Booking far in advance, booking last minute, using budget-friendly carriers like EasyJet and Norwegian…consumers have tons of tricks up their sleeves for saving money on travel, and when businesses are stuck in old corporate travel solutions, then they lack opportunities for cost savings.

Now, businesses have a trick up their sleeve too: TravelPerk. TravelPerk offers the world’s largest bookable inventory in one place by integrating to hundreds of the best travel networks.

3. Make travel policy adherence more practical

Planning ahead is a surefire way to save on business travel.

But considering that many business trips are booked on a very short notice, this isn’t always possible. Do your employees sometimes have to book for themselves? Instead of calling the corporate travel agent, do they choose to book for themselves out of convenience?

Many people think managed travel is not innovating at the pace of change in the travel industry, 47% to be exact, which leads to bookings made outside of policy.

Plus, travel policies often go unread. They can be lengthy, hard-to-read, and hard-to-find. Over 50% of businesses don’t have a policy for mobile bookings—meaning that as mobile bookings naturally rise, so will out-of-policy trips.

Instead, policies should be:

  • Simple
  • Readable
  • Built for real use

It is possible to allow for DIY bookings within set constraints. Use a tool that completely automates your travel policy, including any needed approval workflows for those bookings that fall outside of what is automatically allowed.

With TravelPerk, admins can set specific yet simple guidelines for groups of users, allowing employees to book their own flights on budget. Automated emails are sent out when a trip needs approval.

This way, your policy is integrated into a real booking system, not housed on a forgotten webpage.

4. Be more specific with reimbursement requirements

When employees submit expense reports, you get to see what was spent after the fact, but at what level of detail?

Not enough detail visibility can lead to out-of-control spending.

Let’s say that a traveler submits only a PDF of the final credit card receipt from a hotel stay. This won’t have any information about added costs like meals charged to the room.

Having clear requirements for expense report documentation (such as itemized receipts and invoices) can help dissuade hidden purchases and keep travel on budget and within policy.

Knowledge is power. Just as a consumer looking to save money on their household budget will need knowledge of what spending categories are swallowing their income, a business needs to understand which aspects of business travel are moving the needle more than others.

Here are some questions you might want to ask:

  • Which travelers are amassing the most amount of spend?
  • What improvements can be made in airport transportation costs, wifi fees, etc.?
  • What changes need to take place in Q4 to keep to the yearly travel budget for X team?

Acquiring the data that will answer these questions shouldn’t be hard.

Use a travel booking tool that will integrate with your expensing solution and will auto-generate reports to minimize the strain on employee time. Then use this data to identify trends and optimize your budget over time. You can identify what cities and trips need lower budgets, and which warrant higher spending, to increase fairness and get a handle on overall travel spend.

6. Be transparent and offer incentives for staying on budget

When cutting travel costs, it’s important to lower the pain for employees. For them to feel invested in the effort, they need to know the “WHY.”

For example, a remote company like Buffer that holds yearly in-person retreats might need to communicate to employees why trips for conferences have to be as cheap as possible—so the yearly retreat is a more enjoyable experience for all.

There will be a different “WHY” at every company. If increasing transparency isn’t all that relevant, then maybe incentives will help. When empowered to give bonuses like team lunches or mileage points to those who stay on budget, travel managers can help trim the budget in a creative way. With Rocketrip, you can set individual budgets and allow employees to share in the savings when they can beat that budget.

Ultimately, travel costs are incredibly complex.

They are a mixture of overarching policies and last-minute decisions. By thinking holistically and uncovering how every employee can help, it’s possible to save money while still taking all those business-critical trips.

Change the way you book, manage and report your business travel by signing up for TravelPerk for free.