Everything You Should Know When Business Travel Budgeting
To make it to as many out-of-town meetings and corporate events as possible, it’s essential to carefully budget your business travel expenses. While first-class tickets and Michelin-rated meals may sound appealing, spending more on extravagance means having less to put toward future excursions.
Fortunately, you can effectively balance your business travel budget by shopping around for deals and choosing more cost-effective expenses.
In this guide, we’ll dive into the world of travel budgeting so that you can save on your business trips. With the following insights, you’ll be better equipped to make smarter, more wallet-friendly choices about your upcoming travels.
Setting your business travel budget
Every company will have different travel management funds available. They'll also have varying destinations they need to go to, expectations for comfort and amenities, and other factors that affect their total budget and expenses.
However, on average, most companies spend about $800 per person per day of business travel. With that figure in mind, tally up your total travel budget to see how many trips your company can afford in the course of a year.1
Researching destinations and costs
While $800 is a ballpark figure for daily travel expenses, it doesn’t apply equally across every destination. Travel to more expensive countries—such as those in Europe and East Asia—can be far pricier than places like Latin America, Africa, and Southeast Asia.
To get a better understanding of prices for your next business trip, consult:
- SkyScanner – This handy tool allows you to quickly view different flight costs and purchase tickets that best suit your needs and budgets.
- Numbeo – Numbeo details the cost of living in different areas to give you insight into everyday essentials such as food, public transportation, and more.
- Engine – Sort hotels by amenities, distance to landmarks, and more, then get the best deals for your preferred stays delivered directly to your travel dashboard. This Engine blog also offers an incredible wealth of money-saving tips and travel recommendations for small businesses.
Breaking down your business travel budget
For the average business trip, American companies tend to spend2:
- 34% of their budget on airfare
- 28% on lodging
- 19% on dining
- 18% on ground transportation
- 1% on miscellaneous expenses
Depending on your preferences, you may choose to save on one of these costs to spend more on another.
Keep in mind, there’s no magic formula for how to allocate your travel funds—your budget should reflect your company’s needs and priorities. With the following tips, however, you’ll be able to save significantly across all expense categories.
Transportation
Approximately 81% of business travel is done via personal vehicle.2 And this makes sense—besides taking a bus, driving is the most cost-effective means of transportation.
So, if your employees are willing to hit the road, you could cut transportation costs.3Plus, they'll already have a car to get around town once they’re there—meaning no expensive daily rentals.
If you do need to fly, however, make sure to reserve your seats early. Booking months ahead of time can cut airfare costs by over 50%, though exact savings will depend on the popularity of your route, the time of year, and other factors.4
Accommodations
From short-term vacation rentals to serviced apartments and hotels, there are plenty of lodging choices for the modern traveler. However, the classic hotel room is the best for business trips. Why?
In recent years, vacation rentals have skyrocketed in price and are now more expensive than hotels over 75% of the time.5 Similarly, serviced apartments generally charge for the kinds of amenities you won’t likely take advantage of during a short stay, like full kitchens, laundry service, and more.
To get the best deals on hotels, use Engine to search for suitable stays in your preferred area. With Engine, you’ll work with a dedicated trip manager who can compare properties side-by-side and provide group rates that aren’t available to the public.
Meal allowances and dining
Rather than trying to pre-plan meals, allocate a dining allowance that’s suitable for the destination. This gives your travelers the freedom to account for any dietary restrictions and dine at will when they feel hungry.
To further save on dining expenses, encourage your workers to eat at business-friendly eateries. Some may offer discounts for corporate accounts or let you rack up hotel loyalty points for repeat visits. Additionally, consult any travel rewards programs you subscribe to and see if you get dining offers at particular restaurant chains.
Avoiding common business travel budgeting mistakes
Last-minute flight reservations are the biggest budget busters when it comes to travel. Booking tickets less than a week before takeoff, for instance, is usually 56% more expensive than doing so 21 to 74 days ahead of time.4 Be sure to make these stipulations part of a corporate travel policy so there is some procedure for getting ahead of these costs that can be avoided.
On the other hand, hotels can often be less expensive if booked closer to your stay. On average, rooms reserved two weeks before your arrival are 13% cheaper than those same stays booked four months in advance.6
Aside from when to book, also consider the fine print of your reservations. You’ll want to bear any extra fees that allow itinerary changes and rebookings. If an emergency pops up, you’ll save significantly if you’re allowed to get a refund rather than eat the costs of your lost booking.
Use Engine to find the best deals on your preferred stays
Business travel can be expensive but with the right approach to budgeting and booking, you can stretch your funds to make more critical meetings. Be sure to book flights well ahead of time and drive when possible to save on transportation. Likewise, you should consult a variety of travel industry apps and blogs to seek out the best deals on dining, lodging, and more.
To ensure you always get the lowest prices on your preferred hotels, use Engine to book your stays for business travels. Engine has over 750,000 properties in our network, and with white-glove service, alongside dedicated support available 24/7, 365, you can rest assured that we’ll have your back all the way from booking to checkout.
Book your next business stay with Engine to save up to 60% and optimize your employee travel expenses.
Sources:
- Zippia. 25+ Essential Business Travel Statistics [2023]: How Much Do Companies Spend On Business Travel. https://www.zippia.com/
- Business Wire. The Average Business Trip Costs $1,293 and Prices Will Increase in 2020. https://www.businesswire.com/
- Computer Network. Planes, Trains, Cars and Buses: We Do the Math to Find the Cheapest Way to Travel Per Mile. https://www.cnet.com/
- Investopedia. What Is the Cheapest Time to Book a Flight?. https://www.investopedia.com/
- Travel and Leisure. Hotels Are Now Cheaper Than Airbnbs, New Research Finds. https://www.travelandleisure.com/
- Nerd Wallet. Ask a Travel Nerd: Is It Cheaper to Book Hotels Last-Minute?. https://www.nerdwallet.com/
