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Reducing Business Travel Expenses: The Do’s & Don’ts

Reducing business expenses

One of the biggest challenges with cost reducing measures in business travel is finding a way to keep employees happy and maintaining a healthy company culture while focusing on reducing expenses as much as possible.

To help you make the best cost cutting decisions without affecting your employees' travel experience, we have gathered for you a list of DOs and DON'Ts.

DOs for cutting corporate travel expenses

Employee incentives

One of the best ways to involve the employees that often travel for business purposes is to incentivize them to spend less during trips. For example, employees who spend less than their budget could keep a percent of the savings they generate. This works magic for your finances - employers state that they succeeded in cutting travel costs by 20-30% simply by rewarding their conscious employees.

Date flexibility

You cannot have flexible date ranges for all your employees' business trips, but when you do, be sure you let your travel manager know. Moreover, the most effective way to encourage people to organize their business trips in advance is to include in your travel policy a travel request procedure.

With a travel request procedure, your travel manager can book the trip for the dates when your company can obtain the lowest possible fares. This way, you can avoid scheduling trips during important events or holidays in your destination city, thus avoiding the increased cost of travel, hotel rooms, etc. during that time.

Policy compliance exceptions

While encouraging your employees to comply with the travel policy, you should also be flexible and include some exceptions to facilitate the approval process. From time to time, some business trip costs might fall outside of policy, but keep in mind that your employee may be able to find alternative transportation or accommodation that can cut costs although despite not being compliant with your travel policy.

Public transportation

Taking a taxi in a big city can lead to a lot of unnecessary stress due to heavy traffic and the increased risk of being late to a business meeting or to catch a flight back home. Unless you have an agreement with a taxi company, encourage your employees to rely on public transportation. Either way, you aim to encourage the use of the mode of transportation that was previously approved for business trips.

Shared transportation

When your team or a group of employees is headed to the same city, location and accommodation, they should all make use of the same transportation option. Encourage your group to take public transportation or to share a taxi.

DON'Ts for saving on corporate travel

Last minute booking

Booking in advance should always be your number one priority for business trips and is one of the best ways to increase savings. It works for both transportation and accommodation, meaning you should encourage your employees to submit their travel requests in advance.

This requirement should be included in your travel policy with some acceptable exceptions, while discouraging last minute bookings.

Shared hotel rooms

Although it can save you a lot of money, making your employees share the same hotel room can be very unpleasant and uncomfortable. After a stressful travel day, everyone needs some alone time, privacy to recover and to build the required energy for a new, productive day. You must ensure to put people first in your company, and not cost savings.

Remove business class privileges

Executives and frequent travelers will not be very happy if you cut off the business class privileges that they are familiar with. You cannot treat all the employees the same, which is why you should have different travel policies taking into account the level of seniority or the hierarchy.

Focus only on corporate deals

There are chances that your company has a deal or a contract with different travel service providers. This is a big advantage in most cases, but you should not totally ignore alternatives. If your employees or your travel manager discover a cheaper alternative that still pleases the needs of your business travellers, why ignore it? Alternatives might allow for important cost savings, especially for longer business trips.

We hope that this list of do's and don'ts will help you reduce your corporate travel expenses and even inspire you to to identify new opportunities. Along with these tactics, a strategic decision that will considerably increase your company savings is to invest and implement the right automated travel and expense management solution.

Posted on 21 Sep 2020