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Decoding the Hidden Costs of Business Travel

hidden costs of business travel

Have you ever wondered how much your company spends on all the business trips you and your colleagues take? According to travel industry experts, most companies only track about 20% of their total travel spending. The other 80% are hidden costs that many businesses overlook entirely. 

This blog will uncover some of the biggest hidden costs of business travel so you can better understand the actual costs your company incurs. With knowledge of these hidden overheads, you’ll be in a much better position to analyze your travel program and optimize your policies to save money. Let’s dive in and decode the significant hidden costs behind every business trip! 

Travel Booking Fees

You probably know that airfare, corporate hotel rates, and rental cars have costs associated with them. But you should realize that booking those travel components also incurs fees. Online booking platforms, traditional travel agencies, and corporate booking tools will charge service fees for flight, hotel, and rental car reservations. These fees are often hidden or not shown upfront in the booking process.

For flight bookings, you’ll typically encounter carrier-imposed fees, like ticket change or cancellation fees, as well as booking site processing fees. Hotel bookings also carry hidden surcharges for online, agency, or corporate bookings. Hotels pay commissions to booking platforms, which are passed onto travelers through service fees. These are some of the most common hidden costs of business travel. 

Car rentals incur similar fees when booking through intermediaries. You’ll be charged extra for the ‘convenience’ of booking online or through a managed travel program. Like airfare and hotels, these fees are only sometimes transparent when booking.

Use your company’s business travel booking tool to avoid extra travel booking fees. The managed travel program your employer has invested in will eliminate third-party booking fees. 

Airline Baggage and Amenity Fees

Another important yet neglected hidden cost of business travel is airline baggage and amenity fees. The airlines continue to find creative ways to charge extra fees beyond just your ticket price. One area travelers often get surprised by is fees for checked bags, priority boarding, extra legroom seats, and other amenities.

Most domestic airlines in the US now charge around $25-35 for the first checked bag and $35-45 for the second. International flights generally have higher baggage fees. This can add up if you check bags frequently for work trips.

Airlines also love to upcharge for desirable extras like early boarding, extra legroom seats, and premium economy. These amenities can make travel more comfortable but come at a cost. 

As a business traveler, you have some options to avoid baggage and amenity fees:

  • Fly with airlines like Southwest that allow free checked bags and don’t charge for seat assignments.
  • Get an airline-branded credit card, which often provides free checked bags and priority boarding.
  • Pack light and avoid checking bags whenever possible.
  • Politely ask at check-in if any early boarding or upgraded seats are accessible.
  • Let your company travel manager know which airlines and routes you fly frequently so they can negotiate discounts.

Being aware of all the extra airline fees and having strategies to reduce them can impact your company’s annual travel budget.

Hotel Extras

Hotels love to nickel and dime business travelers with extra fees that can add up. From room service charges and minibar snacks to Wi-Fi fees and parking, it’s easy to rack up hundreds in additional hidden corporate travel costs without even realizing it.

When booking hotel stays, always check for details on amenities included. Many hotels now charge extra for Wi-Fi access, sometimes $10-15 per day. Before connecting, use free Wi-Fi in the lobby or other public areas. For parking, ask the front desk if they offer any discount for overnight guests to avoid the sticker shock of $25 or more per day.

If your room has a minibar, only open it if you plan to pay sky-high rates for drinks and snacks. One $5 bag of chips and a $6 soda and candy bar equals over $15 in minibar charges. Instead, find a nearby convenience store for food and beverages at normal prices.

Business travelers can avoid hundreds of dollars in surprise charges by minimizing extra fees whenever possible. Carefully review hotel bills and flag any erroneous fees to be removed. Companies can rein in excessive hotel costs with a savvy, cost-conscious approach.

Meals and Entertainment

Hidden business travel costs related to meals and entertainment can quickly add up during business trips. While eating out and attending events might be necessary for networking or client meetings, companies must often account for these daily costs adequately.

When employees travel for work, it’s easy to run up tabs for room service, excellent restaurants, and after-hours socializing without considering the cumulative impact. Even if each meal or activity seems reasonable, the hidden corporate travel costs can become significant collectively throughout a multi-day trip or multiple monthly trips. Without clear policies, employees may indulge more than they would at home.

Companies should establish reasonable per diem limits for meals and set guidelines around when entertainment expenses are appropriate to cover. For example, a $60/day meal stipend forces travelers to be selective in dining choices rather than treating every meal as an opportunity to eat lavishly at company expense. 

Corporate Travel Management Tools

Corporate travel management tools like online booking platforms and travel management software can help rein in some of the hidden costs of business travel. These tools provide visibility into spending and allow companies to optimize their travel policies.

For example, online booking tools let you easily compare flight options across multiple airlines, choose less expensive flights, and reserve preferred seats in one place. By encouraging employees to book through preferred platforms, companies gain leverage to negotiate better rates with airlines, hotels, and car rental agencies.

Travel management software like ITILITE centralizes booking, analyzes past spending, and generates smart recommendations to reduce hidden corporate travel costs. It can automate expense reporting by integrating with corporate cards and providing detailed spending visibility. Machine learning algorithms identify optimization opportunities, like switching to low-cost carriers or avoiding last-minute bookings.

So, if your company still needs to start using corporate booking tools, it’s worth exploring how they can help control the hidden costs of business travel. The right travel management technology pays for itself through the savings and efficiencies it creates.

Uncover the Hidden Costs of Business Travel and Save Your Company Money

By understanding the significant categories of hidden business travel costs, companies can take steps to manage travel spending better. Uncovering these unseen expenses allows travel managers to optimize policies, negotiate better deals, provide employee guidance, and implement cost-saving tools. Taking control of travel expenses benefits the organization’s bottom line and individual business travelers. 

These are just some of the many ideas you can use to reduce travel costs. The revenue saved from identifying cost leaks and optimizing the travel budget can be utilized in other core processes. ITILITE is a travel and expense management software that helps you manage your travel costs effectively, achieve near 100% policy compliance, reward your employees for choosing hotels/flights within budget, and more. 

Discover a simpler way to manage corporate travel

Corporate travel management can be extremely daunting. Getting travelers to stick to budgets while booking travel, monitoring spends or finding support for travelers – there is always something that needs to be done. That’s why we built a solution that makes corporate travel management simpler.

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Simplify your travel and expense management process!

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