Rising airline and hotel prices haven’t killed business travel. They’ve merely guillotined the frills and fancies. Companies are taking various steps to regulate and cut down the cost of business travel, even as business travellers are being forced to rethink their travel strategies and chart out a POA to match their suddenly-fractional budgets. EXEC equips you with a multitude of tips to ease you into these frugal times.
Goodbye, luxury suites. Hello, complementary breakfast.
Global Business Travel Association Foundation’s Global Business Traveler Study 2012 has found that a fifth of business travellers now operate under mandated travel programmes, which require them to use the airlines, hotels and car rental companies their employer has chosen, according to the. And apart from keeping a closer watch on travel costs, companies are also turning to other methods to hold down their travel bills, including use of videoconferencing equipment, offering less expensive hotels within the same brand and staggering the number of employees sent to a meeting.
Companies rewrite travel policies:
Travel prices are expected to increase this year by 4 percent to 6 percent, with higher prices and fewer discounts. Air fares are up by 11 percent and hotel prices by 8 percent. So, what are companies doing to combat the situation without drastically cutting down on the number of employees being sent on work-related trips? Dhananjaya Gowda, Senior HR, said, “Due to the recession, when we now send employees out on travels, we give them additional responsibilities and roles, and consequently more tasks to complete. Policies have also been rewritten. Before, while onsite, employees would be given a daily allowance (apart from the salary) and the telephone and commute bills would also be taken care of. Now, only daily allowances are give- no phone and travel reimbursement. Either the individual or client is billed.”
Sylvia Jose, HR Manager, Network 18 Group, added, “Cost of travel has increased and we now send our employees only if there is an absolute, pressing need. But we have not compromised on the benefits for those who we do send on business trips.”
And what are the alternatives to business travel? Gowda explained, “Companies are turning to other methods to hold down their travel bills, including the use of videoconferencing and reserving rooms at less expensive hotels. Every single bill is now sent to the clients, whereas earlier, the company would sponsor the trip. All bills are added to the project, mentioning client onsite; for total reimbursement.”
And he reveals that due to the new travel policies, there has been a 40-50 percent decline in the good talent coming in to companies, as travel is one of the biggest incentives for most people.
Business travellers master the art of budgeting:
While companies are going out of their way to scrimp, executives are increasingly being forced to spend out of their own pockets. Whether it’s a generous tip for a particularly good waiter, an extra cab ride or an upgrade on the hotel’s Wi-Fi, they prefer to spend their own money, as they consider it double-dipping otherwise. Abhishek Jalota, Software Developer – Capgemini, said, “The budget set aside by companies for travel has been hit only slightly. But cost cutting is surely the need of the hour now. Personally, I spend only when I am absolutely sure I will get reimbursed from the company. I will never go for a business trip if been forced to spend from my pocket.”
Rajat Gupta, Pace Express Travels & Cargo Pvt Ltd, added, “Business trips can be both stressful and enjoyable at the same time- and right now, it all depends on your budgeting. I generally prepare a customised budget before my trips and save it on my mobile so I can put a limit on my spending. Doing research like finding budget hotels, alternative transport facilities etc, before my trips helps me spend lesser than I would actually spend if I didn’t know the place. I also book my air travel in the middle of the week when the rates are the lowest, and carry lesser luggage so I do not have to pay extra.”
As for spending out of his own pocket, he said, “I don’t spend a lot out of my own pocket, but there are times when you want to go out and explore, and companies these days don’t pay extra for that. In terms of the benefits we’re being forced to forgo, being a foodie, I’m not able to explore great food joints in the city because of the limited budget. All that notwithstanding, you have so many new experiences on these travels. So, no, the joy of business travel is not dead. It just got a lot more adventurous!”
Rakesh Sethi, Hotel Manager, Regenta One – Hyderabad, doles out some simple tips to keep your budget in check. He listed, “Official travel, on most occasions, is either to monitor a project/team’s performance or to meet a client to strike a deal. What may be worth trying is doing these activities over the Internet (via Skype etc) in the initial phases and then the actual travel can take place towards the more important/deal striking phase.
– Both travel and stay, if planned in advance, can fetch you deals that can save anywhere between 10-20 percent.
– If you can spare the extra money to hire a dedicated travel manager, full or part time, there’s a good chance this will save you money in the long run. The coordinator also establishes reduced rate contracts with car rental providers and hotel chains.
– Travel is sometimes not as expensive as is the cost of stay (more than three days). A good way of economising would be to take up an upscale serviced apartment instead of staying in a five star hotel.”
Frugal essentials for the business traveller:
It’s important to stay spiffy on the road, particularly when you are travelling for business. So in addition to packing basic toiletry supplies, purchase a simple grooming kit containing clippers, an emery board and possibly a small tuck-in of sewing supplies. The ability to handle things like nail care and minor mending on the road will save you from having to dish out funds for manicures prior to interviews, and tracking down a sewing shop to handle minor seam stress.
When it comes to budgeting for business expenses, it’s hard to more bang for your buck than with business cards. They essentially serve as your personal brochure, and enable you to establish contact within acceptable business protocols. Networking is how you survive in any industry, even when you are job hunting or starting your own freelance gig on the side.
If you find yourself using a particular hotel chain repeatedly on your business travels, take the time to sign up for their reward card program. Earning points in a hotel program can not only result in an eventual free room, but also additional perks like free upgrades, complimentary room snacks and beverages, newspaper delivery, late checkout privileges and access to executive lounges.
Having a helpful money app or two on your business trip will help you manage your receipts, accurately file the proper paperwork for your expense report and shave costs in a variety of ways. Account balances, available deal alerts and custom coupon delivery are all possible from your smartphone.
Search for the best airline deals:
– Use regional airports. Search engines and travel agents usually overlook the fact that you can save a wheel barrel full of money by flying into a nearby regional airport. These smaller airports also tend to have shorter security lines, better service, and cheaper taxi service.
– Ask for an upgrade. Sure, odds are that this won’t pan out, but if you ask for an upgrade — especially at the gate, well in advance of departure — you might get lucky. You might get bumped up for free or be able to do so for a small fee.
– Opt for refundable air tickets. Booking on one of these airlines is an insurance policy against fare changes. If the price goes up, you’re already locked in at the lower rate. And if the price goes down, you can always cancel that reservation and rebook the same itinerary at the lower rate.
– With the elimination of many fare restrictions it often pays to price your trip as two (or several) one way flights (perhaps on different airlines) in addition to a round trip on a single carrier.
– Combine two business trips if possible.
Frugality: business class style:
How would you like it if you could be frugal by flying business class? Well, that’s not a very far-fetched fantasy.
– With award travel, flying in business class is a bargain. For example, if a round-trip ticket in economy is 80,000 miles; to upgrade to business class is 110,000 miles, a mere 27 percent more.
– If you have a lot of luggage, you can save hundreds of dollars in baggage fees alone. Business-class passengers typically receive an allowance of two bags that can weigh up to 70 pounds.
– When flying in economy class on an international flight, the food tastes like the plastic wrap it comes in. But premium passengers are spoiled with creations from celebrity chefs. Knowing this, you can treat your business-class flight like a reservation to a fine restaurant. Even during a layover, you can enjoy free drinks and snacks in the business lounges rather than the overpriced fast food in the concourse.
Boutique hotels and serviced apartments to the rescue:
Boutique hotels provide pretty much the same services at much lower rates, making them a hit among the frugal business traveller. Serviced apartments too are gaining popularity again. Bruno Loosli, CEO Waterstones Boutique Hotel, said, “The number of business travellers coming in is increasing, because boutique hotels are all about affordable luxury. Businessmen love the fact that they can get the best of services and comfort at a much lesser price.” Rohit Naithani, Vice President, Marketing & Development, Mosaic Hotels, Noida, elaborated, “Across the board, the cost cutting effect is a knee jerk reaction, which, in a couple of months will stabilise, and travel will more or less settle in tune with business requirements. While hotels aren’t suffering too much by the rising costs of travel, super luxury hotels and high-end conferencing properties do get affected. Since authentic boutique properties are generally small and have prices that aren’t steep, businessmen prefer us to 5-star facilities. Same services and lesser costs; what’s not to love?”
So in what ways are these smaller properties better than luxury giants? “A business traveller does not like to repeat his requirements every time. Recognition with personal attention and quick service is what he wants, and though luxury hotels provide great service, the very business model of boutique hotels is comparatively better equipped to address these needs,” he said. Other factors are that personal interaction with customers is easier, and requirement can be turned around even if it means a policy change. Moreover, the design and aesthetic component helps make the atmosphere cosy and comfortable within a limited space.
What are other ways to save on accommodation?
– Avoid staying in the city centre. Stay in a hotel that is as good, in a place that isn’t very close to the centre, but yet is well-connected by public transport- the rates are cheaper.
– Corporate apartments and suite hotels frequently offer lower rates than full service hotels which must bear the costs of restaurants, bellhops, the valet, and many other amenities. A complimentary breakfast and free high speed Internet access can also lower your costs. And with a full kitchen, I purchase groceries and avoid paying restaurant prices for many meals.
– Hotel rates vary from day to day depending on supply and demand. But many hotel booking websites are unable or unwilling to display the lowest rates each night on a multi-night stay. So always check prices for individual nights as there could be a savings if you are willing to switch hotels in the middle of your stay.
– Avoid conventions and peak travel periods- hotel prices vary greatly depending on what event is taking place in that city during your stay.
– Save money by carting your dirty clothes to a laundry or drycleaner rather than paying those ridiculous hotel prices.
Plan your meals, and oh, don’t skip the freebies:
This is one essential you mustn’t scrimp on, lest you want to go into that client meeting feeling crabby and then there’s always the danger of your stomach rumbling loudly bang in the middle of an important point you’re making. But, you can have your cake and eat it too- in this case, spend less and eat more than sufficiently.
– Make sure you book places with free breakfast. And always remember to eat a big breakfast- enough to carry you through the day, till dinner, with a light snack in between.
– If you’re into cooking, get a room with a kitchen, so you can buy your own supplies and cook up a delish storm.
– Hit the buffet once a day, and load up enough to compensate for another meal.
– Don’t feel bad- ask for discounts.
– Check out local newspapers that usually contain some special discounts and / or coupons.
– Check out local web or universal website to check the pricing of the restaurant or eateries you are browsing in a specific area.
– Buy local non-fancy wheat bread with jams and butter, cereals with milk and some bananas and apples. These simple foods are relatively inexpensive but nourishing and will fill you up.
With so many budgetary restrictions and all the effort put into keeping an hawk’s eye on spending habits, has business travel become a big pain- one that you’d rather do without? Gupta concluded, “All these limitations notwithstanding, you still gather so many new experiences on these travels. So, no, the joy of business travel is not dead. It just got a lot more adventurous!”