We all know the many benefits a business and its employees can glean when embarking on business trips, but there’s no denying the costs can ramp up if they go unsupervised.
Even when planned for, emergencies or last-minute changes can increase the price, especially as this is when quick decisions are made amidst a lack of options.
While it can quickly feel like a pressurised situation when assessing the books, it doesn’t have to be that way. If you introduce certain aspects into the business, the costs can be lowered while the fruitfulness of the trip remains the same.
To make this into a reality for your business, we’ve outlined the hidden costs you need to be aware of, as well as seven easy items you could introduce into the business.
How much does business travel cost?
Every business is different, with the costs of travel depending on its frequency, amount of people going on the trips, and what it allows colleagues to expense or book (example: economy or business class seats).
However, a survey by Censuswide suggests the average annual budget is projected to be £47,865 in 2025 which represents a 12% increase compared to 2024. Looking forward to next year, research by the Global Business Travel Association suggests business travel spending in Europe will reach a whopping 389.9 billion euros. This would mark an 8.2% increase from 2025.
The research gives another indication into the cost of business travel too, with business travellers in the UK spending the most per trip across Europe at an average of almost 1,305 euros.
What are the hidden business travel expenses?
The obvious costs of business travel are the accommodation and transport, with the former often being the most expensive component. However, there are some ‘hidden’ costs which can easily creep up on the business if they aren’t prepared for. These include:
- Daily expenses for meals
- Expenses for room service or meeting costs
- Baggage additions (sometimes there are extra fees for suitcases)
- Seat selection costs
- Hotel or airline Wi-Fi
- Resort fees
- Last-minute changes and emergencies
- Taxis and/or parking fees
- Travel technology
Seven ways to reduce business travel costs without losing quality
To prevent business travel from becoming a burden on the bottom line, work on the below steps to lower the rising costs without jepoardising the quality you’re looking for.
1. Create a comprehensive business travel policy
If you don’t already have one, creating a business travel policy will help everyone at the company understand what they can and can’t book, what the expenses include, and how they should approach these days.
When you don’t have one in place, it means employees are left to make their own choices which could leave your business at risk of over-spend. Remember though, it shouldn’t be a 30-page document as it’ll quickly gather dust. Instead, you need the policy to highlight key points and answer common questions.
At a minimum, you should include the following:
- Where should your people book travel
- How should they pay
- Is there an approval process?
- How are expense claims paid back
- What is included in an overnight stay?
- Flights, hotels, rail, cars & and ground transport booking guidelines, what are they allowed to book?
Travellers should know when they can and can’t book business or premium economy travel and which bookings trigger additional sign-offs.
2. Re-assess travel needs
While the Covid-19 pandemic was an awful time, it did mean people got a whole lot more used to communicating virtually. Although everything has opened up, consider why business travel is being booked and if there is a more sustainable (and budget friendly) option that adheres to traveller needs.
For example: If a manager needs to speak with another decision-maker, but they are located a four hour commute away, a virtual meeting could suffice instead.
As another example: If teams are travelling in two separate vehicles for a two-day event, but are travelling back from the city at the end of the first day. The teams could travel in one vehicle and stay close-by to the location to minimise additional transport costs and quality of life for those involved.
3. Create an expense reporting process
There’s nothing worse than finding miscellaneous receipts from employees who went on a business trip five months ago (or longer!) as the cash flow could be out of sorts with random payments going in and out at unknown times.
This is why a process for expenses is important, both for the business and employee as no one wants to risk not getting their money back. To fix this frustrating process, utilise reporting software and set a timeline by which a claim has to be made. Commonly, this is within 30 days.
4. Build up supplier relationships within the travel industry
Now, taking the time to build up supplier relationships can be extensive, but it is worthwhile as additional benefits and useful discounts can be secured on every booking.
To get started with this, you first need to analyse the types of transport the business usually opts for along with accommodation types. If the company’s corporate travel often involves visiting big cities across the UK, USA, or Europe, consider connecting with chain hotels who operate on a global basis first.
You can approach these potential suppliers and share more about the business and its needs, with a desire to create a partnership. When you focus on this approach, it’ll move the needle from being mere one-off discounts, but substantial rate reductions and added value (think: breakfast, early check-in, upgrades, etc) instead.
5. Utilise travel management technology and tools
Rather than sifting through paperwork or flicking across multiple tabs on a browser, travel management technology can help bring everything in that department together.
Not only does this result in less headaches for those sorting it, but it’s a time saver too which saves you money in an indirect way. Look out for systems that include features like: multi-vendor search, integrated inventory, real-time alerts, integration with expense tools, price monitoring, and auto-capture of receipts.
6. Make a commitment to book business travel in advance
Sometimes, last-minute travel cannot be avoided especially if a meeting pops up across the country or tickets are secured for an upcoming international conference.
When you can plan in advance though, you’ll leave the options open meaning you have more choice and autonomy over which accommodation or transport you book. This allows for greater flexibility, so you can avoid peak travel days and get ahead of rising demand.
According to Booking.com for Business: “You’ll get better fares at least 21 days before the flight, and even cheaper flights a few months ahead.”
7. Regularly audit business travel spending
When you’re managing business travel in-house, without a designated person in that role, the costs can rise without you realising.
Your go-to hotel or transport provider prices can increase over time or team members may not adhere as closely to travel policies as you may like which leads to mounting cost pressures. If you don’t currently monitor spending in this area, an employee should be assigned ownership of this task.
The oversight, typically handled by those in finance, operations, or HR roles, should include conducting monthly or quarterly reviews of travel expenses, depending on how often corporate travel takes place.
Save on business travel with a corporate travel management company
To really reduce your business travel costs (and the time you spend on this area) as an SME, consider working with a travel management company (TMC).
A good TMC will begin by analysing your business travel spend and highlight areas where you can save money. Many will already have the strong supplier relationships that you’re looking for too, so they can jump right in with getting assistance from hotels, train companies, airlines, and more.
The above will give you your time back, especially as they should also be able to centralise all your business travel needs. From managing bookings to analysing data, you’ll have instant access to book and manage travel wherever you need to, along with having a single point of contact.
At Good Business Travel we are experts in corporate travel and recognise that every business is unique so we tailor our plans to suit you – not the other way round. To see where you could reduce business travel spend as an SME, contact us today.