How to create a travel budget: Quick guide with template

Whether building client relationships or sharing team knowledge, corporate travel supports key organizational goals. In fact, a 2024 survey found that 59% of travel decision-makers link increased travel budgets to profitability, and 64% link them to higher revenue. But unlocking that value requires disciplined budget management.

A corporate travel budget template is one of the most efficient tools for tracking expenses and maximizing ROI. It ensures nothing gets overlooked and helps standardize documentation across teams. 

Read on to learn why business travel budgeting matters—and how to control costs without compromising impact.

Why is it important to have a travel budget for business trips?

A typical business trip costs about $1,200, including flights, accommodations, meals, and incidentals. With spending on business trips trending upward, it’s more important than ever to try to optimize your travel budget to maximize returns. 

Here’s why thoughtfully budgeting for business travel helps the whole organization:

• Better employee expense management: Budgets establish a clear financial framework while traveling, so employees understand what the company will and won’t cover. This means they can avoid spending their personal money. It also speeds up the travel expense reporting process, since there’s no ambiguity and, thus, fewer expenses are turned away. 
• Improved team efficiency: On top of speeding up expense reporting, companies can also add budget parameters to travel booking platforms, excluding flight and accommodation options that exceed spending limits to streamline the reservation process and speed up approvals. 
• Compliance: Travel budgets establish clear expectations regarding which expenses are permissible, which helps organizations remain compliant with the company’s travel policy.
• Smarter decision making: Travel budgets allow companies to track spending patterns and identify potential cost savings, improving the ROI. Monitoring travel expenses also means leaders can be more strategic about which business trips they wish to invest in, targeting only those that best support company goals and deliver maximum ROI. 
• Improved fund allocation: Tracking budgets and expense reports allows companies to identify whether they’ve allocated sufficient funds to all spending areas, improving the company’s general budget management.

Key elements of a business travel budget

Whether your travel team uses a spreadsheet to budget or leverages a travel booking platform like Engine, all business travel budgets should include these elements.

Defined expense categories

Breaking down travel expenses into categories simplifies organizing costs and complying with expense policies governing financial allocation. Typically, travel expense categories include:

• Flights: The travel budget should include costs for airfare, taxes, baggage fees, and other related charges.
• Lodging: Accommodation funds cover hotel expenses, including general room charges, service fees, and parking. 
• Meals: The meal budget provides an allowance for purchasing food and beverages. Travelers usually pay this cost out of pocket, which the company then reimburses up to the per diem limit. 
• Transportation: This covers local ground travel like taxis, public transit, and car rentals.
• Insurance: Companies pay for travel insurance to cover lost luggage and canceled flights. They may also cover health insurance. 
• Incidentals: The company may allocate money to cover additional expenses like laundry and tips.

Dates and duration

When budgeting for a specific trip, include when and how long the employee will be away from the office. For a more general business travel budgeting document, you might define ideal travel windows—cheaper times to travel—and less ideal ones, so travel managers can keep this in mind when planning a team or employee’s trip. 

Daily allowances/per diems

The best way to manage day-to-day expenses is to allocate a daily, or per diem, allowance to cover minor fees. Per diems establish a daily spending limit, helping travelers stay within budget.

Determining per diem rates requires researching the expenses of visiting a particular destination. For example, when traveling to London, the travel manager would calculate the food allowance considering the cost of three daily meals in British pounds, converting it to USD for the budget.

Providing employees with an allowance streamlines the budgeting process by eliminating the need for approvals and ensuring consistency and predictability for all travelers. 

Estimated costs and approvals

Estimating the tentative sum allows the company to assess the trip’s financial impact before departure and approve it based on whether the expected return outweighs the cost. An initial estimation also gives the travel manager a moment to assess where they can adjust the budget for a higher chance of approval.

Expense tracking and reporting

Once the traveler returns home, they provide an expense report outlining their actual spending and compare it to the estimated budget. The comparison allows companies to identify spending trends and whether they’ve over or under-allocated funds in a particular expense category. This analysis permits companies to account for discrepancies, adjust fund allocation, and optimize their budget to achieve maximum travel ROI.

How to create a travel budget in 5 steps

Here’s a five-step guide to business travel budgeting to ensure you effectively align budgeting with the trip’s goals and the company’s bottom line. 

1. Determine an initial expense total

The first step in drafting a budget is to estimate potential travel expenses through research and reviews of past expense reports. Factors to consider include:

• Duration of stay
• Airfare 
• Ground transportation 
• Meal and beverages
• Lodging
• Entertainment
• Conference or trade show fees
• Visas
• Travel insurance
• Incidentals
• The company’s travel policy

This information lays the groundwork for the initial travel budget. Remember, travelers must justify all expenses against the expected ROI for the trip. 

2. Consider seasonality and other factors

When establishing the budget, the travel manager must consider factors potentially contributing to higher costs, like: 

• Popularity of the destination
• Peak tourist season
• Accommodation demand 
• Weather risks

Factoring these contingencies when calculating the travel budget ensures the employee has enough resources to cover unforeseen expenses. 

3. Identify cost savings

There are many ways for travelers to stretch their travel budget and improve ROI, including the following:

• Advanced bookings: Booking flights and accommodations well before travel dates can deliver significant savings through cheaper airfare options and hotel deals.
• Public transportation: Taxis and rental cars can be expensive, so encouraging public transit whenever schedules allow trims the budget.
• Travel credit cards and loyalty programs: These programs offer airfare discounts, free hotel room upgrades, and other perks that reduce expenses.
• Travel management apps: A travel platform like Engine allows users to find the cheapest flights, hotels, and car rentals and consolidate reservations into a single booking, saving time and money. 
• Flexible fares: Should business plans change, flexible travel arrangements like open airplane tickets allow business travelers to adjust their itinerary without added cancellation or rebooking fees.
  

4. Draft the budget

With all of your research, draft your trip’s travel budget, being extra careful that it aligns with the corporate travel policy you reviewed at the start. Filling out a template at this stage, like the one below, helps you remember every little detail.

Remember to build in some flexibility here. Trips famously don’t go according to plan—lost luggage, stolen credit cards, and damaged equipment are par for the course. Adding a reserve fund to the travel budget cushions the blow of unforeseen circumstances and emergencies, allowing employees to travel confidently. 

5. Review and submit

Have a fellow travel manager review your trip’s budget, making adjustments as needed. Then, submit your budget for approval. If the person approving the budget asks for changes, jot these down so you can get ahead of these adjustments next time. 

A sample travel budget template

Here’s a sample travel budget/expense template you can use either in a Google/Word Doc or as a travel budget spreadsheet in Excel.

Manage your business travel expenses with Engine

Instead of tinkering with row formulas and sums, Engine’s all-in-one travel booking platform streamlines business travel planning. Travel managers can find the best deals on flights, accommodations, and car rentals, while employees can use the built-in expense tracker to stay on top of their budget. 

With Engine, convenience and control merge into one easy-to-use travel management system.