In recent years there has been a great surge in the amount of money that companies spend on corporate travel. With an annual growth rate of 7% and a predicted value of $1.7T by 2022, the average company spend on business travel has increased by 217% between 2016-2019 alone. As a result, it may not be surprising to hear that business travel is now the second-largest operating expense for companies that do travel.
There are a few different causes one could think of to explain this: a world recovering from the 2008 financial crisis (when travel spend unsurprisingly shrunk significantly), increased globalization that enables companies to expand territorially, and technological advancements that have made travel more accessible by increasing both the competition of travel providers (effectively lowering costs) and the ease in which one can view and book travel. Twenty years ago it wasn’t possible to simply open Skyscanner on your mobile phone and book a flight within minutes.
Like any sudden spike in activity, with the good can come the bad. In this case, your company’s increased travel spend is a positive signal of your company’s growth and expansion, but if left unchecked, it can unnecessarily balloon and grow out of hand.
As the gatekeeper of your company’s finances, it’s important to understand how you can properly and effectively take control of your travel budget and optimize how your company manages business travel.
A ‘Travel Policy’ is essentially a set of ground rules that both travel-bookers and travelers must abide by in order to keep your corporate travel efficient and within budget. Normally, this includes matters like price caps for flights and hotels, guidance on how much in advance to book, approval processes, expense procedures, and essentially anything else that is necessary to know.
The problem is that most companies either lack any kind of ‘Travel Policy’, or there is a disconnect between what those policies outline and what travelers book in reality.
The solution is, first and foremost, to create a ‘Travel Policy’. Next, you need everyone booking travel to be very aware of the contents of the policy so that any bookings made are compliant with the guidelines set out. You could email the policy out to employees and hold monthly meetings explaining the policy, but we recommend taking advantage of travel management software that automatically enforces your travel policy while employees are booking.
Need help deciding which travel management software is right for you? Click here to see why companies are choosing TravelSuit!
Large corporations often have specially negotiated rates with select carriers and hotel chains which can reduce their travel spend by up to 20%.
The problem is that SMEs alone don’t have a sufficient volume of travel to get special rates with carriers and hotels, and even if they do, they don’t have the time to negotiate with several different carriers and hotels.
The solution is to find a business travel platform that includes pre-negotiated rates. These solutions either work with so many SMEs that they have a sufficient volume to negotiate rates on your behalf, or they have partnered with larger corporations that provide these rates. Either way, this alone could yield considerable savings for your business.
Click here to see which inventory aggregators have partnered with TravelSuit.
It is a well-known fact that booking travel in advance can result in substantial savings, but it also gives you the added benefit of more predictability and stability to your budget. This doesn’t only apply to flights and accommodation but also to conferences, events, exhibitions, etc., which will commonly offer early-bird prices for attendance.
The problem is that most employees are not taking advantage of these lower rates.
The solution is to implement a policy that requires departments to plan their annual events and trips in advance. This will also inform the company of who would be sent to the events, enabling travelers to book everything early, and significantly lower your company’s travel spend. Travel management software can help you routinely monitor your company’s business travel spend in order to make sure it is kept within budget. For companies still using travel agents, it is necessary to notify the agent of your travel plans in advance and ensure they book as soon as possible so that you may take advantage of early booking prices.
Click here to read why travel agents are a thing of the past for corporate travel.
Getting a clear picture of how much money is being spent on corporate travel might be more difficult than it sounds. It is crucial to have all of the records and documents relating to any monetary spend. This includes not only standard flights and accommodation but flight changes, seat selection, baggage addition, room upgrades, special services, ground transportation, meals, and any other costs associated with any given trip.
The problem is that consolidating a multitude of invoices from different sources such as direct bookings, travel agents, etc., is arduous work that is prone to errors. In addition, these invoices will not include a breakdown of the costs, preventing you from getting further insight into how specifically your company is utilizing the budget.
The solution is to automatically record and consolidate all invoices related to your business travel, ideally with a software solution that can give you granular insight into your spend and further insight into exactly what your budget is being utilized for.
Click here to see why CFOs are choosing TravelSuit to monitor their business travel spend.
Whether your business travel budget is unmanaged or just in the hands of third parties, it’s time to take control. It might seem like a lot of work, but thankfully, there are many software solutions out there that can make this process a piece of cake and help you book, monitor, and manage your business travel more efficiently.