Whenever a business is looking for places to reduce expenses, business travel is usually first on the chopping block. After all, thanks to technology, meetings that used to require a cross-country flight can now be handled via videoconference.
Still, there are times when you need to put in real face time — not just the on-camera kind — with clients, or attend an industry event, and the only way to do so is to travel. And thanks to a culture in which many people associate traveling on the company’s dime with traveling in relative style, business travel expenses can often skyrocket, and take a big chunk out of the budget, especially for small businesses and startups.
Since requiring employees to stay in cheap, no-name roadside motels and eat nothing but fast food while on business trips isn’t realistic (or a great way to keep them on the payroll) what’s an entrepreneur to do? It is perfectly reasonable to place some restrictions on employee travel expenses; for example, prohibiting upgrades to first class or expensive meals, but even beyond establishing a realistic budget, there’s more you can do to keep costs in check.
1. Maximize Corporate Credit Cards
Choosing the right business credit card can actually make a significant difference in your company’s travel budget. While cash-back cards are always attractive, when you or your staff must travel on a regular basis, a travel rewards credit card that offers credit toward free travel (such as points toward hotel stays or airline miles) can actually cover some of your travel costs when you use the card effectively. Choosing a card that offers other benefits in addition to free travel can also make a difference in your travel budget; for example, a card that offers free travel insurance when you pay for your trip using the card can help prevent you from incurring extra expenses should your trip be interrupted while you’re on the road. Other money-saving benefits to look for include waived foreign transaction fees, rental car coverage, emergency services, and travel concierge services.
2. Plan Trips Strategically
It’s time to attend the annual conference. As you review the list of hotels provided by the conference organizers, you immediately select the least expensive option — only to discover that you must take a $25 cab ride to and from the convention center each day, adding $200 to the bill. Considering that a hotel within walking distance of the venue was only $150 more than the hotel you chose, you really didn’t save any money at all.
Being strategic in your business travel planning means doing a little homework to determine whether you are getting the best deal. For example, transportation from the airport to the hotel often comes with a hefty price tag. Instead of hailing a cab when you arrive, reserve a private car service or shuttle van ahead of time.
Usually, these services charge less than taxis, and offer more reliable service. However, strategic planning might also mean avoiding travel at peak (read: expensive) times, working with a travel agent who can secure group rates, and exploring different options. For example, flying in the day before the meeting and spending a night in a hotel might be less expensive than flying in just one day later.
3. Take Advantage of Corporate Discounts
Many airlines, rental car companies, and hotel chains offer corporate discounts to attract business customers. These discounts can sometimes be as high as 25 percent, so they are worth exploring. However, keep in mind that oftentimes, such discounts are for rack-rate rooms or unrestricted fares, meaning that even with the discount they could be higher than what you might otherwise pay. Compare all of your options, and don’t hesitate to use coupon codes when they are available. Search online for codes that can reduce your costs; it doesn’t matter if you are traveling for business as long as you meet all of the conditions of the discount.
4. Incentivize Travel Savings
Finally, some companies are putting employees in charge of travel cost savings by creating incentives for them to spend less. One program, for example, gives employees a travel budget, and if they spend less than the budget, they receive cash or gift cards equivalent to the difference. You need to give your employees a reason to spend less on travel. Otherwise, they are likely to take some liberties — especially when they aren’t exactly willing to travel in the first place.
Cutting corporate travel expenses doesn’t mean you have to eliminate travel all together. With some creative and strategic thinking, you can spend thousands less, and still make all of the trips you need to make.