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6 Things Businesses Should Not do to Reduce Business Travel Costs

March 07, 2023
tips to reduce business travel costs

In today’s fast-paced world and rapidly changing business environment, companies seek ways to reduce costs while maintaining their bottom line. One area where businesses cut costs is by reducing business trip expenses. 

However, while there are many ways to reduce business travel costs, businesses need to remember that there are certain things they must not do.

While it may be tempting to reduce travel costs drastically, as a business owner, you need to be mindful of how these decisions can impact your operations, employee satisfaction, and overall company success. By understanding what not to do, businesses can make informed decisions that strike a balance between cost savings and business travel processes.

This blog discusses some things businesses should not do to reduce business travel costs:

1. Neglecting Travelers’ Preferences

Traveling for business can be a stressful experience for employees. Long flights, multiple layovers, uncomfortable stays, time away from home, back-to-back meetings, etc., can all affect their well-being. However, most companies neglect these factors and don’t take employees’ needs into account in order to save business travel costs. This can lead to severe negative consequences. 

Firstly, employees can become disengaged and demotivated if they feel their needs and preferences are not being met. This can lead to decreased productivity and job satisfaction. 

Secondly, neglecting travelers’ preferences to reduce business travel costs can impact the quality of business trips. For instance, if employees are uncomfortable sharing rooms with other travelers, boarding red-eye flights, or flights with multiple layovers, it can aggravate their stress levels and frustration, increase absenteeism, decrease productivity, and skyrocket medical costs. 

Lastly, when you ignore employees’ preferences, it can lead to a decrease in employee retention. If employees feel they are not valued, they may quit the organization in search of new job opportunities. 

Therefore, businesses must be aware that reducing travel costs can impact employees in several ways. Hence, to avoid these issues, you must book non-stop flights that take less time so employees can avoid multiple layovers, book spacious and comfortable stays, include bleisure travel in their itinerary, and many more. This helps reduce employees’ stress and enhances their travel experience. 

2. Depending Only on Corporate Deals

Whether meeting clients or attending business conferences, travel is integral to business operations. In recent years, many businesses have relied heavily on corporate deals with airlines and hotels to reduce business trip expenses. While corporate deals can offer many benefits, relying solely on them can have significant drawbacks. 

Businesses usually negotiate with hotels and airlines for the best deals and discounts. These offers are exclusive only to specific organizations. However, these rates are very competitive; hence, business travelers get minimal options. 

For instance, if an airline or hotel that employees usually prefer is not included in the corporate deal, it can affect their travel experience. Depending only on corporate deals can limit the flexibility of employees and hinder their ability to make the best decisions for themselves. 

3. Making Too Many Changes to Travel Policy

Travel policy is the foundation of a company’s business travel management process. 

However, most companies draft travel policies in a way that helps reduce their business travel costs.

 While reducing business travel costs is certainly a legitimate goal, companies should be careful not to make too many changes to their travel policy because of the following reasons:

Impact on Employee Morale

Traveling for business can be stressful and exhausting for employees, and too many changes to travel policy can add to that stress. For instance, the change in the policy may not allow employees to go on bleisure trips. During such scenarios, employees may feel low or upset.  

Increased Expenses

Frequent changes to the travel policy can lead to confusion among employees, leading to increased business trip expenses. Employees may be unsure of the latest guidelines or find it difficult to comply with new policies. This can result in non-compliance and increased expenses. 

Difficulties in Budgeting 

While the travel budget is an important aspect of the travel management process, making too many changes to the travel policy can impact it severely. There may be uncertainties around policies which can result in employees overspending and underspending. This, in turn, can affect your travel budget. 

While companies may be tempted to make frequent travel policy changes to reduce costs, it can have negative consequences. Instead, companies should focus on establishing clear and consistent travel policies that are regularly reviewed and updated based on the organization’s evolving needs. 

4. Ignoring Travelers’ Safety 

Keeping your employees safe should be one of your top priorities, especially during a business trip. According to a survey, most Americans feel unsafe during both domestic and international travel. 

While most business trips may go smoothly, sometimes things can go wrong. Many factors can compromise employee safety, such as accidents, crimes, and severe weather events. 

Hence, ensuring the safety of employees should never be ignored, even if it means reducing business travel costs for the company. Here are some reasons why: 

  • Legal obligations: Companies have a legal obligation to ensure the safety and well-being of their employees, regardless of cost considerations. Ignoring safety concerns could result in legal action, fines, and reputational damage.
  • Productivity: Employees who feel unsafe while traveling may be less productive and unable to focus on their work. This could result in decreased efficiency and lower quality work.
  • Increased Costs: Ignoring safety concerns can lead to increased costs for the company. The company could be liable for medical expenses, insurance claims, and legal fees if an employee is harmed while on a business trip. 
  • Reputation: If an employee is harmed while on a business trip, it can damage the company’s reputation. Negative publicity can deter potential customers, investors, and employees.

Hence, businesses must never compromise employees’ safety to reduce costs. As a business owner, you must create a corporate travel security policy that defines employee safety guidelines and protocols. You must also ask your travel managers to conduct a pre-trip risk assessment checklist to identify potential risks an employee may face during the trip. 

 

 

 

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5. Assuming All Business Trips are Same

Most of the time, businesses assume that costs incurred for one business trip is the same for others too. However, not all business trips are the same. Business trips can vary widely depending on the purpose, location, and duration. 

For instance, an employee might have traveled to New York earlier for a work trip. After a few months, he is required to travel to Detroit.  As New York is more expensive than Detroit, the spending limits for Detroit should be less than for New York. 

Additionally, employees going on International trips may have different travel needs, such as arranging for visas, passports, various travel documents, etc., which can be quite expensive compared to employees going on domestic trips. Therefore, you must never assume all business trips are the same in order to save business travel costs. 

6. Cutting Back on Travel Insurance

When your road warriors travel for work, they can encounter life-threatening risks. Employees need protection and coverage for various potential risks and emergencies in such cases. Some of the emergencies are medical emergencies, trip disruptions and delays, lost or stolen luggage, etc. 

However, in an effort to reduce costs, businesses may want to cut down on business travel insurance coverage or forego it altogether. Businesses should not cut down on travel insurance to save business travel costs. 

Without travel insurance, employees may be left to pay for these expenses out of their own pocket, which can lead to financial hardship and stress. 

Manage your Business Travel Costs More Efficiently

Most businesses these days want to reduce business travel costs in order to manage their business travel more efficiently. However, while doing so, they make mistakes that can affect them in the long run. Therefore, businesses should leverage travel management companies to manage their business travel costs. 

ITILITE is a SaaS-based travel management company that can help you plan and manage your business travel costs. We take into consideration factors such as employee safety, policy compliance, personalization, business travel insurance, etc., without compromising your travel budget. Moreover, our travel management software empowers you to make better decisions and achieve better outcomes. 

Book a free demo with ITILITE to learn more about our advanced features. 

 

 

Author : Priyanka Kamath
Priyanka Kamath is a content writer and marketer at ITILITE. She quit her clinical research job to pursue something she loved-content creation! An avid traveler and travel influencer, she loves creating memories and narrating stories through videos and photos. She loves watching thriller movies and is an ardent cricket enthusiast.

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