Maximizing Your Travel Budget
Ross is the president of Beatty Group International, a business that provides logistical support for corporate incentive travel programs and business training conferences, and operates a full-service travel agency for individuals and special interest groups. E-mail Ross at
My company has a division that sells travel services, so when it comes to business travel I often play the role of consultant and consumer. Like every entrepreneur, I want to get the most out of the money we spend on travel purchases. Here are a few financial strategies I use internally and recommend to our corporate travel customers:
Develop a travel management policy. As entrepreneurs, we want to empower our people, and we expect them to do the right thing when it comes to company expenditures. That said, they don’t always put the company first when booking flights. If employees have a choice of the US$300 seat on Delta or the US$600 seat on American Airlines (where they are likely to get upgraded to first class due to elite status), they often pick the latter, presuming the company can afford the difference for this benefit.
In my company, employees don’t get to make these types of decisions without pre-approval. Having a travel management policy allows us to define our expectations and identify deviations prior to travel. Our travel policy includes parameters for the least-cost, “reasonable” air itinerary; allowable booking portals; hotel rate and car rental ceilings; allowable travel and entertainment expenses; and management pre-approval requirements.
Funnel all purchases through an enforcement portal. I know there are hundreds of channels my employees can adopt when it comes to booking travel arrangements. The more latitude I give them, the less control I have. By booking all travel through one source, I am able to make sure the travel policy is enforced to contain cost; generate reports to monitor our expenditures; identify travel patterns and opportunities to negotiate with airlines and hotels in specific markets; and improve service while reducing administrative time.
Airline tickets and employee time cost more than service fees. In today’s environment, almost every travel supplier derives their income by charging a service fee of some kind. I’ve seen many entrepreneurs book their travel by having their administrative assistants go online to find a ticket. It may appear that this will prevent the company from paying higher fees, and therefore lower its costs, but in the long run it only serves to reduce the service available to the person traveling. Stopping employee abuse, saving time, accessing expertise and consistently paying lower fares saves a lot more money than the fees we pay.
Use reward cards whenever possible. When used strategically, credit cards are a great way to leverage cash flow and gain rewards. We use credit cards with airline mileage rewards and/or other rewards programs to pay for almost everything our suppliers will allow. I’m talking about day-to-day purchases in addition to travel. If we have a US$50,000 hotel bill for a group, for example, we put it on the card and take the points. By employing this process, we’ve been able to accumulate large amounts of points and use them for employee travel, customer gifts and personal vacations. Since we pay the card off every statement, our only cost is the annual fee of US$60-$75.
Let employees keep their loyalty points. Business travel isn’t always fun. I would rather be home with my family than alone in a hotel room. As the business leader, I am entitled to the benefits of any loyalty programs that I earn on the road, and having these perks makes it more affordable for me to take my family on vacation when the time comes. However, I think these perks should belong to the employee, not the company. That said, the employee should not be allowed to abuse company policies to increase the rewards they receive.
Travel can be a significant expense that busy entrepreneurs don’t take the time and effort to manage. In my business, having a policy in place—and an entity to enforce it—allows us to control our costs and leverage the money we spend to the benefit of the company and our employees.