Business travel can be an essential part of running a business, but it can also be a significant drag on the bottom line.
Travel management company Travel Leaders Corporate last month found that the costs of corporate travel continue to rise — with the prices of rental cars, hotels and airlines all increasing in the first quarter of 2016. (The average flight was nearly $8 higher, hotels were up $3 per night, and rental cars were up a nominal amount.) While all three categories are well off their record highs, the money required to fund that travel is still a headache for business owners.
But there are ways to cut those expenses, and they don’t necessarily require a lot of effort on a company’s part. Here are a few of the best ways to lower your business travel expenses.
1. Book in advance. Last-minute travel is sometimes unavoidable in business, but when you have time to schedule a trip far in advance, it can result in huge savings. In a March study, travel management company Concur found that by booking at least eight days before departure, businesses can save an average of $148 per ticket.
2. Take advantage of rewards programs. Pretty much every hotel chain and airline has a rewards program for its frequent customers, offering free stays or free flights. While it’s not especially practical for large corporations to incorporate those rewards into their travel costs, companies with a smaller head count can use those to chip away at costs by hundreds, if not thousands, of dollars per year.
Choosing the best rewards program depends mostly on your nearest airport and hotels located in your most frequently visited cities. Flyertalk.com helps business travelers examine their options, and AwardWallet.com helps them track and boost rewards.
3. Watch the add-on fees. Despite what it might seem, flying hasn’t gotten more expensive in recent years. In fact, Concur said, the average ticket price in 2015 was $5 less than 2011. But incremental fees, like seat upgrades, checked luggage fees and in-flight meals are helping carriers boost their revenues. In 2014 the average passenger spent $17.43 in extras. That’s an 8.5 percent jump from 2013, according to Concur. And airlines are getting more inventive with those fees, with some now charging for early boarding and “preferred” seats (which have more legroom).
4. Seek alternatives. Flying into major airport hubs is convenient, but you sometimes pay a lot for that convenience. It’s always a good idea to investigate the cost of flying into small and mid-sized regional airports that are a little further out — especially if it’s a last-minute trip. (One important thing to factor in, though, is the cost of gas and transportation to and from that airport.) Consider, also, alternate means of travel, such as trains, if they’re a viable option in your area. They’re often less expensive, and you’re able to get a lot more work done while you’re en route.
5. Meet virtually. Face-to-face meetings are sometimes essential, but it’s easier and cheaper than ever to have a teleconference with clients or co-workers in different cities. Whether it’s something as simple as Skype or a business-centric tool like GoTo Meeting or WebEx, there are a number to choose from. That may not be useful for, say, sales calls, but for routine check-ins it’s an acceptable alternative. British telecommunications firm BT Group says it estimates the use of web and videoconferencing results in annual savings of £180 million ($259 million) for its company alone.
6. Weigh the incidental costs. Just as they do on airlines, little things add up when you’re on the road. That makes it even more important to compare costs in advance. Is it cheaper in the long run to rent a car or take Uber, Lyft or a cab? Does your hotel charge for internet access? (And if so, is the speed worth the cost or are you better off using your smartphone to create a personal hot spot?)
7. Schedule wisely. If possible, put off business travel in the summer months, when higher demand results in higher prices by airlines. The end of March is another time to stick to the home office if possible, as the rush of spring break travel also results in a pricing surge.
— By Chris Morris, special to CNBC.com