Business travel is essential for your company. It’s used for visiting prospects, keeping customers, networking, investing in your team and more.
And, in the past, business travel has paid off. According to a 2009 study by Oxford Economics, executives estimate that companies enjoy a $10 to $14.99 return for each dollar spent on travel.
That’s a nice ROI.
But the travel business has changed since 2009.
Airfare is actually down slightly ($5 a ticket), but air-related fees skyrocketed 69 % between 2011 and 2014. Hotel prices are expected to increase in 2017, too, up to 5 % around the world — include 3- to 5-percent increases in the United States and Canada.
Your company needs to make the right investment in business travel. But you can also find plenty of ways to save as travel-related costs continue to grow.
Here are 7 ways to save money on business travel in 2017:
1. Plan Ahead
This is plain common sense, but your business travelers may need reminding: One of the easiest ways to save on trips is to plan ahead. A Concur study shows that airline tickets booked seven days before departure cost on average 44 percent more than those booked 15 days or more in advance.
Last-minute business travel is often unavoidable, especially when there’s a new client to meet or an important deal to close. But try aiming to book travel for business at least eight days in advance. Travelers who book eight days in advance pay only 22 percent more for the same ticket booked 15 days in advance.
Requiring pre-trip approval can help, too. When companies require business trip approval, travelers naturally start the booking process earlier. They book earlier so there’s plenty of time to secure the go-ahead from a travel manager.
2. Set Clear Rules
Make your travel policy firm and comprehensive. It should include reimbursement limits, per diems, preferred airlines and hotels and more.
You can always let employees go beyond reimbursement limits but with manager approval only. Per diems can be flexible based on location — a meal in San Francisco will cost much more than one in Grand Rapids. And push travelers toward airlines and hotels with whom your company has negotiated lower rates.
3. Look Beyond the Price Tag
Saving money on airfare doesn’t help if you spend your workday sitting at the gate. Focus on a low price, of course, but don’t just book the absolute lowest. Look also at other key factors: on-time performance, boarding processes, check-in times, airport accessibility, bag fees, overhead space fees and more. Paying just a few dollars more for a flight that’s on time delivers a significantly greater return than paying just a few dollars less for a flight that arrives four hours late — or worse, not at all.
4. Leverage Loyalty
It pays to concentrate your flights and hotel stays with certain providers. When your flight is canceled or delayed, participation in a loyalty program and the accompanying status can make it easier to rebook and less expensive to rebook, too. At hotels, loyalty programs can mean free Wi-Fi, free breakfast, last-minute bookings and flexible cancellations.
As an alternative to earning status the old-fashioned way, choose a corporate travel agency that negotiates status on behalf of clients. You enjoy the benefits of status but also the flexibility to choose the most convenient and affordable flights and hotel stays.
5. Embrace the Sharing Economy
Just a few years ago, car-share services Uber and Lyft existed as mere fascinations. The same holds true of Airbnb and HomeAway — sharing alternatives to traditional hotels.
But times have changed. In late 2015, car-share services surpassed taxis and rentals as the market leader — which means plenty of drivers on the road to meet increasing demand. Your travelers may already use Uber, Lyft or alternatives, and it may already be saving your company money.
Airbnb and HomeAway are growing, too, increasing market share by 56 % between the start of 2015 and the start of 2016 — which means more options for travelers. You can often get more space and equal comfort for a lesser price when you explore home-sharing as an alternative to hotels — especially when booking last-minute.
Before you jump into the sharing economy, run the idea past your risk management department — or whoever handles liability for your company. While car- and home-sharing options can be convenient, they may not be covered in your existing policies.
6. Listen to Your Team
Business travel isn’t always fun. In fact, it’s often a strain on team members, one they endure for the better of the company. Survey them often. Learn about the entire travel experience, including approvals, booking, airlines, hotels, rental cars, car-share services and more. You may glean insights that lead to happier travelers — and greater savings.
7. Think Before You Go
Finally, it goes without saying: The best way to save money on business travel is to not travel.
Has your company made investments in virtual meeting technology and software that can help create productive gatherings without the cost of travel? If not, explore different options and find one that works for you. Virtual meeting providers will deliver free demonstrations that give you insight into features and benefits.
And think back to our first money-saving idea: plan ahead. When you plan travel well in advance, and when you require pre-trip approval, your team members are better able to consider the investment and its possible return. When you emphasize planning ahead, you may find that your company travels less often — more of the trips that really matter and less of the ones that don’t.
Travel and Save in 2017
A recovered economy and increasing globalization indicate that business travel isn’t going to disappear. How can you engage in corporate travel intelligently and while securing maximum savings?
The ideas above can help. And, at JTB, we’re here to help, too.
We provide corporate travel services that help companies like yours discover savings. As a Travel Management Company (TMC), we know that just a select number of trips lead to cost increases. These cost-increasing trips are the ones that shouldn’t be taken in the first place. Our Cost Avoidance service helps identify and eliminate those trips so that you see the greatest return on your investment in business travel.
Is your corporate travel agent helping you save? Learn more about our Cost Avoidance service, and make sure your company discovers travel savings in 2017.