Travel Tips -How to reduce your travel Bill
In times of Economic Downturn there are 2 things you must never cut too far:
- Advertising
- Travel
Cut the Fat! Don't cut productive Spending!...Introduce Travel Management!
Business Travel is like advertising... Both are essential for growth. In an Economic Downturn Growth may just mean keeping your business steady while your competitors are struggling. Whatever "Growths" means at any particular period, to achieve it, your business must take that extra step that your competitors are too timid to take i.e. establish procedures that make Every $ spent an Investment.
Did you know that you can cut your Travel Expenditure by 30% or more just by introducing "Travel Management" Procedures? A staggering US$100b pa is spent on Business travel BUT SURPRISINGLY, 50% of Companies don't practice Travel Management... Managing Travel, Not Cutting the Travel, is what gets rid of the Fat and saves you the 30% or more.
Established Travel Management procedures:
- Issue Guidelines and Rules for your Travelling people to follow. Clearly define what are acceptable Business costs and what is personal. Emphasize, foe example, that vanity items are not Business related and expected to be packed from departure and not bought, Soiled clothes need not be laundered during a trip, Lunch is a personal expense at the office so why not on a trip also, Etc. Distribute these Guidelines Freely including to your Travel Agent.
- Set "Luxury" standards applicable to individuals dependent on Seniority. Its not sufficient to specify the Hotel Class. Hotel facilities, if used extensively, can cost more than the room tariff! Specify which facility is permitted for use. Laundry, Gourmet Dining, Mini Bar Use, etc all get lumped into the accommodation bill and could cost you US$250 or more a day extra when compared to Coffee Shop prices or outside services. Tip: Pre-paid accommodation as mentioned below is av very good & suttle way to limit the extra costs and avoid possible arguments and ill-feelings when determining seniority.
- Cash, Traveler's Cheques & Specific Outlet Credit Cards are Out Totally! So is a Fixed Daily allowance. Issue Corporate "all purpose" Credit Cards to your Travelling People. Forex Rates will be at Bank Rate not Hotel Rates! No one can say they had no choice but to use facilities provided by the hotel and further, unnecessary expenses will be better Filtered for eventual total elimination.
- If you company has many people travelling then pay attention to the hidden, back-office costs in analyzing travel expenditure for auditing, budgeting and Tax purposes. Some Corporate Credit Card Companies can issue Statements that will segregate & tabulate the different type of expensed, alternatively you can issue two or more Credit Cards to each individual, each card been used for a specific type of expense. You may be able to cut One or more back-office staff with simple expenditure information management.
- Prepare a "Travel Pack" for all Travelling people to take along on a trip. The pack is to include material relevant to your business as well as:
- a notebook computer set-up predominantly for communications including Fax facility.
- a Calling Card or Call-Back service arrangement with billing to your company in your own country.
- If your Travel Expenditure currently exceeds US$100,000pa then Establish "Corporate Rates" Directly with a Hotel Chain and Car Rental Company. If Travel Expenditure is Below this amount then Rely on your Travel Agent to obtain "Contract FIT" Hotel & Car Rental Rates on a Pre-Paid arrangement, this usually saves you up to 40% of the Regular Rate. Tip: Avoid "Tour GIT" Hotel Rates as these are inflexible and Non-Refundable.
- Combine objectives. Its often cost effective for the Company and more productive for the traveller to bring along the partner and extend the business trip by a day or so for R & R. Giving the option of subsidized travel for the partner one or twice a year in lieu of a straight yearly paid vacation is also usually appreciated.
- Stick with just One Travel Agent. Not only will you have more bargaining power by channeling all your business to one source but a well chosen agent will save you money by taking note of the Preferences & Priorities of your Travelling People and diligently matching these with your Company's Policies & best Interest.
Imagine the additional business 30% more exposure to your distant clients can give to your company! That's 4 trips for the price of 3 or 30% of your Travel bill that can be applied to other forms of promotion.
