The Cost of Business Travel is Rising in 2019
If your business depends on travel abroad for trade shows, conferences, negotiating contracts, or just for helping your clients use your products more effectively, the costs of doing business are about to go up.
According to the Global Business Travel Association (GBTA), the cost of hotels and flights are expected to go up in 2019. They say that the flights will go up an average of 2.6% and hotels will rise an additional 3.7%.
For most businesses, travel costs were already at their limit. The means companies will have to find ways to save elsewhere to compensate for the new expenses. Of course, they can reduce the number or length of their business trips but in most cases, the trips were a necessity, not a luxury. That means skipping travel opportunities would hurt them more than it would help. Dropping revenue to offset expenses usually leads to a downward spiral no company wants to face.
The real solution is to look for ways to reduce expenses anywhere possible. There may opportunities lurking that could make the difference in your business travel budget this year.
Make sure you get your VAT refund.
A business trip to Europe that lasts even just a few days and includes hotels, restaurants, transportation costs, and an assortment of other regular expenses could really rack up the VAT payments. The particular laws vary from country to country, but some places charge VAT as high as 20%, and in many cases, those payments are fully refundable. That in itself could swing the balance between an affordable trip and one that strains the budget. So it would seem like a no-brainer to file the paperwork to get that money returned.
But surprisingly, it’s not so obvious when it comes to actually filling in the forms. Some are so complicated and time consuming that business managers opt to leave the money on the table rather than engage staff time and effort getting it done. Even more surprisingly, it’s a pretty common decision. So much so that a whopping $50 million is left unclaimed by companies that are eligible for the refund.
If the forms seem complicated – they often require presenting receipts that were originally issued in all sorts of shapes and sizes and languages and are hard to track weeks after the trip has been completed – the solution is not to eat the costs but rather to look for automated solutions. The Way2VAT app, for example, takes all of the complexity out of the process. It lets the travelers scan in their receipts on the spot and calculates all of the figures for you. In five minutes, you have everything filed for your return.
Make Bulk Purchases
With costs rising, the need to plan ahead is greater than ever. Having a full year charted out in advance allows for a wealth of opportunities. One of them is the ability to package all of trips to a hotel or airline and negotiate a better deal on all of them. That could result not only in better terms but also in other advantages that could benefit the business more than anticipated, There could be private meeting rooms at the hotels that can be used by company staff for meetings, accommodations with perks that make the travel more comfortable for less money, or group rates with other business that turn into other forms of partnerships down the line.
All of that starts with pre-planning. With costs rising, making decisions at the last minute cannot be considered normal procedure. If it must be done, it should be only in the most extreme case. Otherwise, the calendar should be filled out and every individual know when his or her conference and trade show is coming up.
The alternative is simply too expensive.
Make sure trips abroad are productive.
One of the biggest mistakes companies make when they try to save money is to undermine their workers in almost every way, making them less effective and therefore making the trip less beneficial to the company. On the contrary, if you want to make the trip as productive as possible, make sure you invest in the workers who represent your company.
That means don’t try cutting costs by sending them on a flight that is guaranteed to make them tired the next day, or try to save on accommodations by making the time they arrive as close as possible to the time they absolutely need to be there. Give the employees space to work, and they will bring back better results. Otherwise, why send them at all?
Make sure your company gets all of the VAT returns it deserves. For the complete story on recovering VAT in EU countries, download our eBook.