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How companies are wasting money on business travel

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As companies look to tighten their belts, squeezing every drop of value out of your travel budget is crucial for staying ahead of the competition. Business travel is often one of the biggest expenses companies face, so it’s important to find smart ways to optimise this spending, writes FCM Travel GM Bonnie Smith.

By proactively managing and enhancing the value of corporate travel, organisations can unlock resources to invest in other high-impact initiatives. Here are five areas where savings could be made.

  1. Limiting accommodation choices to selected partners

According to Finances Online research, meals comprise the most significant portion of a typical business travel budget, accounting for 21% of costs per trip. If breakfast isn’t covered in the per diem, many business travellers simply add the hotel breakfast to their post-trip expense claim, which can add an average of £11.20 (about R260) per day (OTA data) when travelling in Europe, for example. To control meal and accommodation expenses, businesses should leverage their negotiating power by consolidating bookings with fewer preferred hotel partners.

  • Booking business travel during off-peak periods

Booking business travel during peak periods can significantly drive up travel and accommodation costs as hotels and transport operators charge premium rates. Peak tourist seasons, school holidays, and major conferences can also affect accommodation prices, as can major sporting events and music tours. Check the calendar for your destination and shift the dates of your business trip to avoid clashes with large events where feasible.

  • Ridesharing rather than renting

Rideshares like Uber and Bolt have become a popular mode of travel for business travellers due to their convenience. Travellers can hail a ride at any time, avoid the need for parking, and quickly charge the cost to their company through options like Uber for Business. 

However, note that surge pricing during peak times can lead to significantly higher fares. The unpredictable pricing can make budgeting difficult, so, for airport to hotel transfers, for example, consider the option of hotel shuttles, or compare premium rideshare rates with fixed taxi fares to get the best deal.

  • Booking flights online

Relying solely on online booking tools for business air travel can lead to hidden fees such as extra charges for checked luggage and seat selection that appear at the end of the booking process. This makes cost comparison difficult. However, corporate travel agents and business travel specialists can provide specific advantages. Leveraging the large volumes of travellers they work with, these agents can secure discounts on flights unavailable to the average corporate booker alone.

  • Missing opportunities for cost savings

One of the most important things businesses can do to keep their travel budget in check is to identify and track unexpected costs. Aside from travel and accommodation, many ancillary fees such as airport transportation, wifi fees, or early check-in/late checkout charges can significantly inflate the total spend if you’re not vigilant.

Businesses must ask relevant questions to gain visibility into these hidden expenses.By identifying those who incur the most in additional costs, and the specific trips or destinations with the highest level of unexpected spending, companies can integrate the travel booking system with the expense management platform, and automate the generation of detailed reports to identify these trends. IB

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