When your teams begin to travel once more the travel environment will have drastically changed. Airline capacities have been substantially reduced, government regulations on travel continue to be both restrictive and volatile, and airports, having adapted to social distancing guidelines, feel very foreign. Moreover, for most businesses, increased cost control will remain the new normal, as companies aim to find funds to re-invest in growth and return to profitability. Is it possible to cut a chunk of your travel spend without jeopardising your business?
While it may be tempting to cut travel across-the-board, this might actually hurt your business. For instance, your competitors may travel more frequently to meet your existing or potential clients. Moreover, the strategy has limited impact because people tend to find workarounds (e.g., “I know we are over budget, but this trip is really important.”). You need to take a targeted approach to cost-cutting; there are many levers you can pull that do not require you to cut indiscriminately.
We’ve come up with a simple methodology to understand the drivers of total travel cost and the actions you can take to reduce that cost. You can strategically find savings by reducing unnecessary trips, lowering the average price you pay per trip, and simplifying complicated travel-related admin processes. We expand on each lever below.
Surgically reduce volume: do a critical assessment of your organisation’s business travel needs and ask if certain travel is necessary. Some ideas to consider:
Assess your travel rates against what's available in the market. You want to implement streamlined processes that help boost compliance, but all will be for not if you’re paying more than you should for flights, hotels, and trains. Some ideas to consider:
If travel is necessary, don’t hold it back, but implement reductions in your spending guidelines to make them more cost-effective. Some ideas to consider:
These granular changes will require implementing or changing your travel policy. For a deep-dive on how to do so effectively, we’ve put together a simple yet helpful 7-step plan to create an effective travel policy as well as a Travel Policy Template you can use as a base.
Travel policy updates are worthless if guidelines are not actually applied and adhered to. Develop strategies that will boost compliance. Some ideas to consider:
A source of large, hidden cost in business travel is the secondary processes and productivity losses that go along with it. Simplify those and you will unlock tremendous value. Some ideas to consider:
If you have an urgent business trip to make and you don't have the funds available immediately, you can use online microcredit. Indeed, this type of financing is offered by specialized platforms and allows you to have a sum of money available quickly to pay and advance the various expenses of professional travel. The Finfrog platform, for example, offers an express microcredit in 24 hours. You can apply for a loan in 5 minutes without any proof of identity, you will receive an answer in less than 24 hours and the funds will be received a few hours later once your application has been accepted. Thus, you can plan your business trip in emergency without having to release your personal savings.
At the highest level, there are essentially two variables to consider when coordinating travel in your organisation: managed vs. unmanaged, and centralised vs. de-centralised. The traditional way to cut travel costs is to default to a strictly managed, centralised system with blanket travel cuts.
This may seem easy and impactful at first, but it can hurt the health of your business and rarely leads to the deep reductions you were expecting. However, a managed, de-centralised model that empowers your travellers and leverages an effective travel management platform is the best route forward. To help you think through which opportunities for cost reduction would be most effective for your specific business check out our article on the 4 archetypes of business travel management.
We've also put together a Travel Savings Calculator tool which will help you pinpoint where and how much economies you can make based on your company's specific numbers.
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