It’s budgeting season! What does this mean for your 2018 travel program?
As we wrap up 2017, now is an ideal time to review this year's travel spend and next year's travel management goals. We pulled together our top three budget considerations.
Travel Spend is Increasing
According to GBTA's 2018 forecast (detailed press here), we can expect a 4% global travel price increase in air, car and hotel rates.
Because domestic air costs are expected to increase 2.3%...
- Make a decision to include or exclude basic economy rates within your company's travel policy. While this additional fare class can cause compression and higher rates on regular economy fares, we do still recommend choosing regular economy due to the restrictions on basic economy fares (learn more about basic economy here).
- Take advantage of airline small business programs. They are a great way to maximize your budget and fully leverage your spend, and we're happy to help you sign up.
Because domestic car rental costs are expected to increase 1%...
- You might not change much! However, Uber and Lyft are expected to grow another 10% in market share for 2018, so it’s important to ensure there is policy around this. These transportation purchases are harder to budget for and control, so it’s helpful to advise when scenarios or cost factors might warrant a rideshare service versus a rental car. Just be careful to not require rideshare use in your policy due to potential liability if something goes wrong.
- Maximize your car spend by putting a program in place with a preferred vendor. Keep an eye out for some smart content about car programs in the near future!
Because domestic hotel costs are expected to increase 2.5%...
- Many hoteliers are extending their cancellation policies from 24 hours to 48-72 hours. For business travel, this could mean an increase in cancellation and/or no-show fees. It is important to educate travelers to be aware of a hotel's cancellation polices before booking. Additionally, if you are negotiating a hotel agreement, we recommend trying to negotiate back to a 24 hr. cancellation policy.
- Do you have long term housing needs? We’ve recently partnered with Urbandoor, a corporate apartment booking tool which can save you money for extended stays. Learn more about them here, or get in touch for more information on this solution.
Insight Into 2017 Spend is Crucial
Be honest, do you have enough insight into your 2017 organizational spend to be able to fully and accurately budget for next year?
- Make sure you are getting the detailed reports when and as often as you need, as well as broken down by the proper parameters (department, job code, etc.)
- Conduct leakage reviews to ensure travelers are compliant to your travel and expense policy. This will help change traveler booking behavior while controlling your overall organizational travel spend.
You Don't Want to Lose Your Company Culture
Just because you are organizing your travel budget and enforcing a travel policy doesn’t mean you have to sacrifice your company culture. We believe in finding the balance between controlling the organization’s travel costs and traveler experience. It’s important that your travelers know that just because there is a travel policy in place, we aren’t taking their autonomy away. Here are a few other articles that you might find interesting:
- How big of a role does traveler safety play in your managed travel strategy?
- Refining what it means to budget your travel spend
In summary, having a managed travel program (with a mandated travel policy) in place is absolutely the best way to stay on track with your travel budget. If you need clearer insight into your travel spend, tips on updating your travel policy, or even an idea on where to focus first- we are here to help.