Business travel is an essential part of running a business in today’s world of globalization. But costs of corporate travel continue to increase — with the prices of rental cars, hotels and airlines all increasing. There are ways to cut business travel expenses, and they don’t require significant effort. Here are a few smart ways to lower your corporate travel expenses:
- Credit card and business booking benefits. Some credit cards offer various car rental insurance advantages. You may need to gain pre-authorization so have your paperwork ready and printed for the car rental station. Some credit card companies also have built-in corporate travel discounts. Many of the popular online booking systems have dedicated portals for business travel, offering up to 20% discounts on airline, hotel, and car rental prices. Remember to use their corporate booking systems which are easily accessible online.
- Add-on fees. Incremental fees, like seat upgrades, checked luggage fees and in-flight meals are helping carriers boost their revenues. Airlines are becoming more innovative with those fees, with many airlines charging extra fees for priority boarding, seat variety and selection, and basic baggage fees.
- VAT Refund. The United States has a sales tax system but many other countries have a VAT system. Value Added Tax (VAT) is a consumption tax, which ranges between 8 – 25%, that is levied on many business travel expenses such as hotels, meals, conferences, trade shows, transport etc. The national tax systems of Europe, UK, Canada, Japan, South Korea and Australia allow for VAT tax recovery to most non-resident business entities worldwide. In most cases, corporate travelers are eligible for a VAT refund on their international business. So even without cutting any business travel expenses, you can save up to 25% on your international corporate travel budget. You will need a specialized firm to reclaim your corporate VAT costs such as Global VaTax. There are no upfront fees so you don’t have to pay any consulting or per hour professional fees. A small percentage of your reclaim is kept as a commission for this service. Contact Global VaTax for your free VAT potential report.
- Book timely. Sometimes last-minute travel plans are unavoidable with business travel, but when you have time to schedule a trip in advance, it can result in significant savings. By booking at least eight days before departure, businesses can save notably per airline ticket and hotel. Try to delay business travel in the high travel demand months which simply results in higher prices by airlines and hotels.
- Alternatives. Flying into major airports is convenient, but you pay for the convenience. Consider the cost of flying into small and midsized airports that are a little further out. Take into account travel time and cost from that airport to your lodging. Consider other means of travel, such as trains. Often less expensive, you are also often able to get work done more easily while on your way.
- Amenities. Look for hotels that offer free breakfast, a complimentary cocktail hour, snacks and appetizers, refrigerators and coffee makers in the rooms. Require employees to use these hotels and amenities when they are available.
- Policies. Document policies and guidelines for employee travel and associated expenses. Your policy should outline expense spending limits, preferred vendors, booking and reimbursement procedures, as well as guidelines for what constitutes an allowable expense and which expenses will not be reimbursed.
- Vendor discounts. Airlines, hotel chains, car rental, even restaurants are happy to extend corporate discounts with volume bookings, which ensure leverage in negotiating rates.