Cost of Business Travel is About to Rise
International business demands a great deal of travel to ensure that projects are implemented correctly and that contract negotiations run smoothly. The practice has become so ingrained in the way companies do business that travel costs are simply included in annual budgets.
No wonder business travel has soared in recent years. When the whole world is a potential market, you can move from niche to niche and find the right place for your product.
But current burgeoning trade wars across the world are threatening to close up some markets or make them much more expensive to enter. Analysts are warning that one of the areas that will be most affected will be business travel as countries scramble to cover the higher costs of doing basic business.
Ways to Cut Costs
If hotels and airline costs are going to increase in the coming years, keeping up business will depend on finding ways to compensate in other areas. Most business travelers are already overbooked in their itineraries, so adding productivity is not going be the answer. The only way to offset rising costs is to find ways to make other parts of the trips more cost-efficient.
- Look for Deals Through Tourist Groups Rather Than Business Tours
Everything about business travel revolves around money, and that includes tour providers. Most of them know that a person on business wants to project an image as far removed from the average tourist as possible. So they look for accommodations that make the right impression, usually at far higher rates than many tourists would ever dream of paying.
That’s why you and your company may be better off working the tourist track than the business track. A package for tourists tends to be more affordable, either because agents know that tourists are willing to accept slightly lower standards without thinking about their image or simply because tourists don’t tend to travel on expense accounts and therefore demand to pay less for the same level of service. Regardless of why, finding cheaper packages for group flights or hotel stays may allow for more or longer business trips down the line.
- Plan Further in Advance.
There is no doubt that the best time to book an airline ticket is the minute that it becomes available. From there, prices are only going to go up, not down. So the earlier you know that you are going to have to travel, the cheaper the rate you’ll have to pay.
The opposite end of the spectrum is that emergency flights – those that are booked a day or so before the flight – are going to be far more expensive, sometime several times more. Flights booked even a reasonable three or four weeks in advance will be far more friendly to your bottom line. Of course, you can never be fully prepared for an emergency and it is not realistic to cut those flights out entirely. But putting greater emphasis on planning may help reduce the number of emergencies that come up. It will also allow your company to pay less for the ticket.
- Automate Functions That Otherwise Go Undone.
The classic sunk cost in business travel has always been the recovery of VAT payments that rightfully belong to the company but are simply too tedious to pursue. But over the course of a year, the money lost can really add up. Some countries charge a VAT rate of 20% and include things like telephone, restaurants, laundry, accommodation and hotels, taxis, shuttles, buses, and trains. Some places even provide returns on groceries fuel, car rentals, and conferences.
Many companies traditionally skipped on the laborious process of filing return requests because the forms were complicated and receipts in various languages was often too much for most accounting departments. But today, the whole process from start to finish can be automated. The receipts can be scanned into a system immediately so there is no need to keep track of them, and the automation handles the forms on its own. With the process simplified to such a degree, there is no reason not to get the money that’s coming to you.