Business travel is key for advancing your business objectives and ensuring your clients and partners feel like you value them. Conferences, workshops and in-person events help train your staff, keeping them up-to-date on the latest industry trends and helping to make networking possible. A face-to-face meeting can make the difference between closing a deal and not, and making your colleagues feel like they’re an integral part of the company’s success.
That being said, business travel costs and expenses can often be overlooked. Transaction fees, change fees, incidental expenses and the likes can all impact your overall travel budget. If these costs are not properly factored into your business travel budget, you may end up spending more than you budgeted for.
This article will bring to your attention some hidden costs and provide strategies to better manage, control and reduce them.
Understanding hidden costs of business travel
WhAT ARE HIDDEN COSTS?
Hidden costs are expenses that aren’t immediately visible or included in a business budget. They often arise from inefficiencies, oversights, or unexpected events, making them difficult to detect or plan for. These costs can range from unplanned incidentals while traveling, travel interruptions or cancelations, and result in often overlooked loss.
Transaction fees
Transaction fees can come from using a company credit card outside of the currency area or fees incurred by reserving flights, hotels or rental cars from third party providers. Often if you are making a purchase in person internationally you may be charged by your credit card provider for the currency conversion fees. When not properly planned for, and if there is a high rate of international travel, these fees can easily pile up.
Cancellation and change fees
It’s only natural that travel plans can change. If you don’t book a flexible ticket, these change fees can really eat into your budget and last-minute changes can dramatically increase what you spend.
Note: If you live in the US, and you don’t end up traveling like originally planned, you should be able to turn that money into unused tickets.
Pro tip
A good way to avoid cancellation and change fees is to book with a travel management platform like GetGoing where you can choose your flight based on the amount of flexibility you need. More flexibility means less money wasted.
Meals and incidentals
Of course meals are something that should be figured into your travel budget, but what about incidental expenses like snacks, beverages, tips and gratuities, personal laundry for longer trips, parking fees, phone charges, internet access and the likes? It’s hard to budget for these, which is why it’s a good idea to factor incidentals into your overall budget.
Transportation charges
You can factor transportation into your travel budget, but there’s no guarantee that there won’t be high costs for airport transfers, parking fees or taxis if convenient public transportation isn’t available. Try to prioritize cost-effective transportation options.
Wi-Fi and communication charges
Staying connected while traveling for business is important. That’s why it’s equally important to manage Wi-Fi and communication expenses. Consider having a cell phone plan for international travel and factoring in connectivity charges both in situ and on the airplane.
Strategies to control business travel costs
Business travel will always have its unpredictable dips in the way, but being as prepared as possible for all the things that are thrown in the way will help you stay on budget and avoid any surprises.
Advance booking
Of course when planning a business trip it’s ideal to book flights and accommodations early because you take advantage of better prices and better flight schedules at these discounted rates. When using a travel management platform like GetGoing, you can sort flights by “changeable” “refundable” “flexible (with penalty)” or “flexible (no penalty)” to ensure the level of flexibility you need and avoid eventual change fees.
Tools for better corporate travel management
As a finance controller or for any of those working in the finance department, it’s a good idea to use tools that help you better track and manage your travel expenses. An all-in-one travel and expense management platform can provide you with the tools you need to optimize and streamline your travel expenses by having built-in corporate rates and discounts, and having working relationships with airline and hotel partners allowing you to have better rates.
Make sure there is also an app available so everyone can easily manage travel and expenses on the road. Digital solutions are faster, easier and more flexible, and as business owners, you need solutions that will keep you in control.
Expense tracking
Expense tracking and reporting allow you to report expenses in real-time to adjust and perfect your budgeting. This way approvals are quick too, allowing you to ask for approval for your expenses directly from your travel app, and approvers can approve on-the-go, ensuring better travel management because you can adjust as you go.
Set clear travel policies
Clear guidelines for meals, transportation and accommodations within your travel policy will ensure compliance and also help travelers better understand what is and isn’t allowed according to the travel policy guidelines. This also means better adherence to budget because travelers have more transparency about what is within the policy.
Encourage the use of public transportation
Encouraging travelers to use public transportation and to prioritize cost-effective options over taxis and car rentals can help keep your company stay on budget. Not only is it more budget-friendly, but it’s also friendlier for the environment. In the case that several workers are traveling together, encourage ride share, which will also greatly reduce transportation costs. If the bus or train is an easy option to get to and from the airport, make sure your travelers are aware of the importance of prioritizing this option.
Employee training and awareness
Lastly, don’t underestimate the importance of educating employees on cost-saving practices when traveling, updating them regularly about your travel policy and the best practices to adhere to these policies. The more transparency and feedback you can give to employees, the better equipped your travelers will be to make better cost-efficient decisions.
Business travel costs explained
We’ve looked at the different hidden costs and strategies to proactively plan and mitigate the appearance of hidden costs while traveling for business. For optimal results. It’s a good idea to regularly review and optimize your travel policy.
Don’t have a travel policy yet? Stay on budget and ace travel management with this all-in-one guide.
