Before discussing how to reduce travel costs in a business, let’s understand the fundamentals.
Business or corporate travel involves traveling to places for business meetings or dealing. Of course, business travel involves costs. And, such costs can be broken down into:
- Local transport
- Meeting space etc.
Business travel cost forms a major part of an organization’s indirect expenses. In fact, as per a CNBC survey, business travelers spend $ 611 per day on an average.
Therefore, it becomes imperative to save money on business travel.
Without wasting time, let’s dive in & explore 10 travel cost reduction strategies.
HOW TO REDUCE TRAVEL COSTS IN A BUSINESS
1. Avoid Emergency Bookings
Emergency flight & hotel bookings can be costly. Look at the screenshots below.
I tried looking for a one-way flight from New York to London for 19th November 2018. The best price that popped up was $ 235.
Whereas, when I changed the travel date to 23rd January 2019, the price dropped to $ 158. That’s a massive difference of 33%!.
This happens because flight companies generally follow the ‘flexible pricing’ model. That pricing model helps airlines companies to arrive at pricing based on various demand factors like seat availability.
Needless to say, the closer the travel date, the more demand. And, the more demand, the more will be the price.
This same concept applies to hotel bookings as well.
Therefore, as far as possible, try avoiding emergency bookings for flights & hotels.
Yes, I am aware that sometimes business circumstances may force you to go for emergency meetings. In those scenarios, try the following:
- Convince the client for an alternative date
- Explore if it’s possible to have a Skype meeting instead
- Do a simple cost-benefit analysis & then take a call
Emergency bookings, if planned properly, won’t hurt the bottom line to that extent.
2. Tie Up With A Travel Agent
Yes, I know. You must be thinking like “How the heck can travel agents reduce travel costs in a business?”.
Ok, you are partially correct. That’s because travel agents are infamous for charging “commissions” which results in increased travel costs.
But, your view is only one side of the coin. As per my experience, travel agents can result in massive cost savings if you know how to “use them”.
If you are a frequent business traveler, then this strategy is for you. All you need to do is a tie-up with a travel agent & commit to a certain volume.
Professional travel agents don’t just book tickets but provide:
- Important travel-related suggestions
- Help in choosing the best travel option
- Volume discount
- Holistic packages
- Superior customer experience & support
All these aforesaid services result in saving travel costs.
Here is a list of a few popular travel agents that you may contact:
- Intrepid Travel
- Tucan Travel
So, will you hate the travel agents now?
3. Book Via A Travel Marketplace
Travel marketplaces are aggregators of airlines & hotel inventories.
These travel marketplaces have exclusive tie-ups with airlines & hotels. Those tie-ups help travel marketplaces to deliver the cheapest rates.
I personally like & prefer Travelation.
Using Travelation, when I searched for a New York to London flight for 23rd January 2019, a first price that showed was $ 133!. That’s kind of 20% lower than the average ticket price shown on the airline websites.
Using such marketplaces, you can book flights, hotels & cabs at the cheapest prices possible.
Apart from price benefit, travel marketplaces also provide the following benefits:
- Exclusive discount coupons
- Easy & quick processing of refunds
- Intuitive booking experience
- An extra layer of customer support
- Holistic tour packages
Best of all, the travel marketplaces serve as a single platform to all your travel needs. Whether you need to book a flight, hotel, cab or cruises, they have a solution for each of them.
4. Use A Travel Management App
Travel management apps help you to better plan your travel. And, as you must know, better planning means savings in cost.
Following are some of the best mobile apps for travel management:
The aforesaid travel management apps help you to:
- Find plenty of transportation options
- Discover nearby restaurants
- View all your travel itineraries on a single dashboard
- Get real-time flight alerts throughout your trip
If used properly, travel management apps can help you save money on business travel. Also, they have got a whole lot of other cool features to make your travel stress-free.
5. Share Your Ride Via Uber Express Pool
I bet you already know about Uber. They are one of the world’s largest car aggregators.
Using their app, you can easily book a verified cab at an economical rate.
I am sure you must already be using this app to travel across. But, what I am suggesting here is to explore Uber Express Pool.
Nothing fancy, the Uber Express Pool is a ride-sharing vertical of Uber. It results in massive savings as compared to the regular UberX.
Using Uber Express Pool, you can share your ride with other co-passengers.
Please note that Uber isn’t available in a few selected countries. Therefore, as alternatives, you can use:
- Grab (South-East Asia)
- Didi Chuxing (China)
- Ola (India)
- Lyft (Germany)
The crux of the point is to avoid costly local cabs & use cab aggregators like Uber. Then, explore the cheapest in-app options. For Uber, it happens to be the Uber Pool Express.
6. Claim Travel Expenses For Tax Benefit
Most countries allow travel expenses as a deduction for calculating taxable profits.
As a business owner, you understand the importance of saving on taxes. And, with something like travel expenses, the tax savings can be huge.
Needless to say, business travel cost is the second most major expenses in most organizations. The first being salary of course.
Now, to claim such expenses, most countries have their own prescribed rules. Please contact a tax lawyer for a professional advice.
7. Use The Credit Card That Offers Travel Cash Back
Credit cards are one of the most effective ways to save money on business travel. How?. Because of the cash back you get when you spend using a credit card.
Having said that, it’s also important to analyze the cost(interest) associated with such cash backs.
Also, it’s very important to use a credit card that offers cash back specifically on travel spendings.
Here is a list of credit cards that offer travel-related cash backs (in the US):
- Wells Fargo Proper American Express Card
- Chase Freedom Unlimited
- Capital One Venture Reward Card
- Chase Sapphire Preferred Card
- Discover It Miles
Travel related cash backs can results in savings up to 20%. So, go & get a new credit card now.
8. Use Online Food Coupons
Online food coupons are very handy when it comes to saving on food.
Sites like Groupon can help in this.
The best part of this strategy is that it can be implemented in any part of this world.
9. Try Local Public Transport Vehicles
Local public transport vehicles can be of great help in local conditions. They can help you move fast & save some money as well.
Examples of local public transport vehicles:
- Auto Rickshaws (India)
- Trams (France)
- Suspension Railways (Germany)
- Trolley Bus (Russia)
- Gondola (Italy)
These unique & local vehicles are one of the easy ways to save money on travel.
10. Choose Your Hotel Strategically
To reduce business travel costs, don’t just simply choose a hotel haphazardly. Think before you decide.
Ideally, you would want a hotel to be:
- Near your prime business location (so that you save on local travel)
To get hotels at best rates, you should be using online aggregators. I personally like & prefer HotelWiz. The best part is that they have a presence in most major countries.
- Providing free stuff like parking, wi-fi, breakfast, pool, gym etc. (so that you don’t need to pay for these essential services)
- Having a separate lounge for a client meeting
Hotel & recreation expenses are a major part of corporate travel costs. So, reducing the same will result in major savings.
With proper planning & effort, one can easily reduce business travel costs.
Following are a few bonus ways to save business travel costs:
- Fix a travel budget & stick to the same
- Travel only when it’s absolutely necessary
- Do a cost-benefit analysis before approving a travel plan
Further recommended read: Cost Reduction Strategies In A Manufacturing Business
What do you think of the aforesaid ways to reduce travel costs in a business?. Please comment below.