A Comprehensive Guide to Control Business Travel Expenses

Business travel is inevitable. In September 2023 alone, the UK registered 690,000 business visits. It provides opportunities to close deals and explore new market trends, as well as to build relationships and expand one's network. However, every corporate trip comes with significant expenses; it is the second-largest cost factor for a company.

Types of Business Travel Expenses

A business trip expense covers a broad spectrum of costs, which includes:

1. Transportation Expenses

They include:

Airfare

Taxis

Fuel expenses

Parking fees

2. Accommodation Expenses

Accommodation is the key to a successful business trip. So, organisations bear the accommodation expenses of their employees.

3. Subsistence Expenses

These include bills for food and drinks. Subsistence expenses may include the cost of breakfast, lunch, and dinner.

4. Ancillary Expenses

Although these are secondary expenses, they can still significantly contribute to the trip's overall cost. They include the cost of:

Laundry

Office stationery

Commuting

Entertainment

How Do You Manage Your Business Travel Expenses?

Organizations must use various strategies to manage their business travel expenses for growth and better productivity. So, here are a few tips on reducing business travel expenses:

1. Book Plane Tickets in Advance

Airline tickets can be quite expensive, especially when booked at the last minute.

Fact: Last year, the consumer price index for airline tickets shot up by 25%.

The best way to save on your transportation expenses is to book your tickets at least 21 days before departure. Based on Google research, airfares typically hit their lowest points between 21 and 60 days before departure, with the most economical prices typically occurring around 44 days before the travel date. While these prices may vary depending on the destination and travel season, it is recommended that you plan and book your tickets early to get the cheapest air tickets. You can also ask your travel team to organize business trips during the off-season.

2. Compare Airfares And Partner With Airlines

Airfares can vary by airline, so it's wise to compare airfares on different websites to find the cheapest flight. Many times, travellers make the mistake of skipping the airline’s website. Always check an airline’s website to find the best deal.

Pro Tip: Partnering with an airline carrier. It’ll help you get affordable flight tickets and enjoy benefits like ticket cancellation, waived ticket cancellation fees, and extended deadlines.

3. Avoid baggage fees and airport parking

Since there is a limit on the weight an individual can fly with, it is good to pack light when you have to travel for business.

Pro Tip: Do not pack excess luggage. It’ll help avoid baggage fees.

Airport parking can also increase your travel expenses. Many people prefer to drive to the airport and leave their vehicles at airport parking, but they pay the parking fee. So, find an alternative option to reach the airport.

4. Avoid Travelling During Weekends And Use Unused Flight Credits

According to CheapAir.com, flight tickets are cheaper on Wednesday and Tuesday than on Sunday. Booking your air tickets on Wednesday can save you £90 on average instead of Sunday. So, you should book your tickets on weekdays instead of weekends. You may have to change your plans at the last minute several times. At times, instead of offering a refund, especially in the case of non-refundable tickets, airline carriers offer unused flight credits with expiration dates to the passenger that can be used in the future. You can also use your unused flight credits to book your tickets.

Fact: According to BTN, some companies have a minimum of £1 million in unused credits.

5. Use Public Transportation When Possible

The use of public transportation can help reduce transportation expenses. Research local transportation options and plan your travel accordingly to minimize costs.

Ways To Reduce Accommodation Expenses

1. Book Serviced Accommodation Instead of Hotels

Finding comfortable and affordable accommodation is challenging, especially when you require it for the long term. In such a situation, hotels become a pricey option.

Pro Tip: Choose serviced apartments over hotels to save money on accommodation.

Serviced accommodation is a completely furnished apartment - ideal for short-term and long-term stays. These apartments offer all-inclusive amenities, including:

Kitchen

Furniture

Wi-Fi

Parking

Washing machine Unlike cramped hotel rooms, serviced apartments have spacious rooms that offer privacy and give the feeling of staying away from home. This accommodation eliminates the need to book multiple rooms for different employees, saving you a lot of money. It allows many people to stay under the same roof while offering them time to spend “me-time.” Moreover, you can cook your own meals, saving your company money on food. Last but not least, when booked for the long term, these apartments can offer you a significant discount compared to booking hotels for extended stays. Serviced Apartments in Peterborough: At Your Lettings, a multi-award-winning and IPRAC-accredited property management company, we have a wide range of properties in Peterborough that are ideal for professionals from various industries. However, if you are looking for short-term accommodation or long-term apartments outside Peterborough, you can rely on Contractor Lettings. We can help you find the best accommodation that is comfortable and within your budget.

2. Explore Loyalty Benefits

There are several hospitality providers offer loyalty points to their regular clients. So, try to book serviced apartments whenever you need accommodation services for contractors or other professionals from the same company, such as Contractor Lettings. We provide loyalty points to our clients so they can use them to book our serviced apartments and save a lot in the future.

3. Pay Attention to the Location

Hotels and serviced apartments are strategically located to cater to diverse traveller needs, whether in city centres, business districts, suburban areas, or near airports.

Pro Tip: Pay attention to the location and choose accommodation closer to your business activities, which can help save on transportation costs.

In addition, you should choose accommodation situated in areas with easy access to amenities such as grocery stores, restaurants, and public transportation. This will enhance convenience for your employees and allow them to save on food and other daily expenses.

4. Keep Your Bookings Flexible

Business travel plans can change at the last minute. That is why consider utilizing corporate housing providers or platforms that offer flexible booking options to accommodate fluctuating travel schedules and minimize expenses associated with last-minute changes. At Your Lettings, we offer a cancellation policy. You can cancel your booking 6 days before check-in, so you can modify or cancel reservations without financial penalties.

5. Avoid Last-Minute Bookings

Like airfares, booking your accommodations at the last minute can be very expensive. In addition, you are left with a limited number of options. So, planning ahead and making reservations as early as possible is advisable to control business travel expenses effectively.

Ways to Reduce Subsistence and Ancillary Expenses

1. Set the Per Diem Expenses

Since the cost of meals can vary by location, it is recommended that you manage these meal expenses using a per diem system. Per diem: a fixed amount of money organizations allow employees to spend on meals and other incidental expenses daily during their business trip. Companies can provide employees with the necessary funds for meals while also controlling costs. This approach helps avoid the need for employees to submit individual expense reports for every meal, simplifying the reimbursement process and reducing administrative overhead.

2. Look for Accommodation Amenities

People need amenities, including Wi-Fi, laundry facilities, and so on, for a comfortable stay and to get the most out of their business trip. So, make sure the accommodation you choose offers all amenities within the cost of your accommodation. At Your Lettings, all our accommodations come with a range of amenities, helping you reduce the overall expenses of your business trip. It includes:

• Wi-Fi

• Parking

• Tea and coffee-making facilities

• Equipped kitchen

• Iron and ironing board

• Hair dryer

• On-call concierge

• Washing machine and so on.

To learn more about our amenities, check out our list of properties here.

3. Minimise Mini-Bar Usage

Minibars often contain snacks, beverages, and other items at inflated prices, making them a common source of overspending for travellers. By advising employees to avoid or limit their consumption of mini-bar items, companies can help prevent unnecessary expenses and promote cost-conscious behaviour. Providing alternative options, such as stocking up on snacks and beverages from local stores at more reasonable prices, can further encourage employees to avoid the temptation of the mini-bar.

4. Use Corporate Discounts on Meals

Fact: Many restaurants offer corporate discounts or special deals for business travellers.

Organisations can significantly reduce meal expenses for employees during business trips by taking advantage of these discounts. Encourage employees to inquire about corporate discounts when dining out and provide them with information on participating restaurants or chains. Additionally, consider establishing partnerships with local restaurants or chains to secure exclusive discounts for employees travelling on business. By leveraging corporate discounts on meals, organizations can help employees enjoy quality dining experiences while minimizing expenses.

5. Employee Training on Expense Management

Comprehensive expense management training can help employees make informed decisions and exercise fiscal responsibility during business trips. Offer workshops or online modules covering topics such as budgeting, expense tracking, and reimbursement procedures. Ensure people understand company policies and guidelines regarding allowable expenses, reimbursement processes, and the importance of adhering to budgetary constraints. By equipping people with the necessary knowledge and skills, organisations can build a culture of accountability and quality financial management, leading to reduced overall costs.

The Bottom Line

Controlling business travel expenses is essential for maintaining financial health and maximizing returns on investment. Organisations can effectively manage their expenses across different categories by implementing the strategies outlined in this guide, ultimately driving growth and productivity.