The good news: business travel is back! The less good news: the cost of business travel is skyrocketing.
The highest per diem corporate travel cost increases from 2020 to 2021 are 41.48% in Fort Lauderdale, FL, 33.8% in New Orleans, LA, and 33.44% in New York, NY. New York City unsurprisingly is the most expensive city for business travelers, with an average cost per diem of $540.74.
Before the pandemic, business travel was one of the top 5 highest expenses for organizations. Following the pandemic, there are new economic, social and geopolitical drivers pushing up the cost of corporate travel. The cost of gas is increasing, and airlines are inflating prices to recuperate some of the losses from the last two years. While corporate travel isn’t expected to return to pre-pandemic levels until 2024, organizations are a lot savvier about spending their travel budgets.
But that doesn’t mean that you have to stop corporate travel entirely. There are many reasons to keep global travel on the agenda, from long-overdue reunions with valued business contacts to in-person conferences and events to training workshops.
So, how can you budget smarter to mitigate the rising cost of business travel?
Compare flight and meeting calendars
Unfortunately, the myth about Tuesdays being the cheapest day to book flights has been debunked. But it can certainly help you secure more affordable business travel if you take the right approach. If you know you need to travel for business and have some flexibility around dates, take a look at the flight prices before making a firm decision. Traveling into New York on a Wednesday afternoon instead of a Monday morning is likely to produce very different prices, so plan corporate travel around the flight costs to avoid being stuck paying well over the value.
Rethink your transport options
62% of people who will travel for work in the next three months will take their personal vehicle, 46% intend to fly, and 25% will rent a car.
Consider alternative accommodations
Unless you have a fantastic deal with a hotel chain that gets you their best business rates, it may be time to reconsider how you handle accommodations. Hotel rates are expected to increase by 13% globally in 2022, so why not consider renting an Airbnb or Vrbo for your employees instead of a hotel? This may be cheaper, especially for midweek business travel, and you may be able to find somewhere closer to where they need to be, saving on additional travel costs during the trip.
Opting for a private accommodation booking may enable you to select a more cost-effective meeting venue. Avoiding the expensive hotels in tourist hotspots gives you more flexibility around the location of your event, so you may choose to opt for a less expensive neighborhood to keep costs down.
Send your local coworkers
This won’t always work, but sometimes it may pay off to send your local coworkers to handle meetings and events in their area. For instance, if you have a globally distributed marketing team looking to attend a conference in London, it makes sense only to send your UK coworkers rather than flying your US team halfway around the world to join them.
This may seem obvious, but most organizations would be surprised to see how much money they have spent over the years on sending employees further than they need to for corporate travel. In fact, this Corporate Travel Index Calculator from Business Travel News will help you figure out how your corporate travel costs measure up.
Analyze your travel spending trends
It’s a fact that some teams (such as sales and marketing) will spend more on travel, but do you know exactly how much they are spending? Working closely with your accounting team will give you an insight into how your travel budget is being spent and where there might be opportunities to cut back.
For instance, are business class flights necessary for domestic trips, or would economy suffice? Are there lots of lavish meals happening on business trips? Are certain employees spending significantly more than expected on Ubers when hiring a car would be cheaper? Taking the time to analyze your corporate travel spending will empower you to make smarter decisions.
Opt for hybrid events
While some corporate travel is inevitable, there are likely times you can save on the cost of business travel by simply not traveling.
Hybrid events are becoming increasingly popular as they strike a balance between maintaining face-to-face connections and real-life interactions and a more cost-effective, sustainable approach to meetings and events. Instead of sending your entire team, business class, on a long-haul flight, why not choose a couple of key contacts, and have everyone else dial into the meeting virtually
There are plenty of hybrid meeting tools to engage both in-person and virtual attendees, and when done right, a hybrid event can deliver even more impact than an entirely face-to-face event. For example, your busy senior colleagues may not be able to fly to another city for a three-day event, but they can dial in when needed, which benefits everyone.