As most travel managers know, having a solid business travel policy in place can have many advantages, ranging from organizational efficiency to better worker compliance to containing budgets. However, few of them set travel policies with the intent to save money on flights.
2022 has seen the cost of flights increases internationally. For example, airfare in the US rose a staggering 42.9% between September 2021 and September 2022. Experts predict that fares will continue to increase in 2023. This makes it crucial for companies to take all the necessary steps to contain this increase.
This article will explore how the right travel policy-setting strategy can help you reduce travel costs by saving money on flights.
In this article, we'll take a look at:
Setting a deadline for flight bookings in your business travel policy can affect travel management in at least two major ways: savings and flight availability.
When setting a travel policy, you can determine how early your travellers should book a flight. Many travel managers underestimate the impact of this factor on travel costs. Even a few days can make a significant difference.
Compared to a default scenario in which travellers book their flight the day before departure, our clients can typically save 3% by simply booking a day earlier and 7% by booking three days earlier. In the long run, these savings can add up to thousands of dollars.
Using a business travel management system like to TruTrip ensures travel managers can quickly set policies that help nudge their traveller’s behaviour without any effort or drama. This means companies can fully benefit from the savings by booking flights earlier.
The timing of the booking doesn’t only affect the ability to reserve cheap flights. The later you book, the lower the chance of finding a spot on the plan. Based on our research, 15% of flights were sold out before departure.
Setting a travel policy so that your travellers book the flight early enough can help ensure that everyone can get a spot on the plane. It also increases the chances travellers will be able to book the desired seat, which will increase their overall satisfaction.
Let’s now look at some good practices you can follow to create an effective and cost-cutting business travel policy.
Throughout the year, your travellers will probably book trips for regular occurrences, including internal meetings, events, conferences and annual training. These are usually trips for which you already know that date in advance, meaning you can book the flight well before departure.
Our data shows that by setting a 90-day flight ticket booking deadline for trips that your travellers take regularly, you can save an average of 58% compared to a scenario in which your travellers book the flight the day before.
For example, the same flight could cost $250 when booked the day before, $150 when booked 45 days before and $100 when setting a 90-day deadline.
By leveraging TruTrip’s smart policy, you can set specific deadlines and budgets for teachers or travellers.
Other trips are less regular in nature, and there may be the need to book them with extreme urgency. This is typically the case of trips aimed at meeting a client who gave you very short notice to conclude a transaction, as well as trips for equipment repairs and senior management meetings.
Regardless of the urgency level, you should try to follow a 5-day rule for travel approval. However, even setting a 3-day deadline can allow your company to obtain 18% in savings when this is not possible.
Some trips tend to have a higher budget than others. This may be due to the longer travel distance (travelling to New York from Singapore is usually costlier than travelling to Sidney) or to other business factors, including the need to use business class.
Our investigation shows that you can save 15% on high-budget flights if you use TruTrip’s smart policy to request an 8-day booking deadline for your travellers.
In the long run, saving money on high-budget trips can have a significant impact on your company’s bottom line.
Here is a series of steps you should follow when creating a cost-cutting travel policy.
Analyze your trip history and future plans. Are there any trips that you take regularly? For some companies, this may be the case of meetings to bring a remote team together, while for others, it can be the case of attending relevant conferences for your industry each year.
As for urgent trips, you should ask yourself whether they usually involve a particular team or are organized for a particular reason.
Gathering all the data will make your planning more accurate and allow you to start the policy-making process with a clear set of parameters.
Create a list of the trips done by your business travellers over the last year or beyond and try to detect a pattern. How many trips were booked with sufficient advance? How many were booked in urgency at the last minute?
The goal is to get an average of your current flight costs. Once you’ve determined this value, you can use TruTrip’s smart policy to set appropriate deadlines and push them down.
TruTrip’s travel policy-setting tools are highly flexible. This means that you can consider the needs, requirements, and circumstances of your teams and travellers when setting budgets and deadlines.
This reduces the level of drama and conflict needed to implement policies. Depending on each scenario, you can set 90-day, 45-day, 8-day, or 5-day timelines and any value in between. At the same time, you can recognize that certain trips are simply too urgent and allow shorter deadlines on a case-by-case basis.
While travel managers pursue different goals when setting policies, it’s important to consider saving money as one of the primary objectives.
At TruTrip, we recommend creating policies with the intent to save, as our research suggests that setting deadlines and budgets can help businesses get lower rates, avoid unnecessary fees and positively impact the company’s bottom line.
Once you define a travel policy, it must not be set in stone. You can test it and assess results gradually. Over time, you can adjust the policy to meet the changing needs of your business and improve savings opportunities.
TruTrip’s privacy setting tools are highly flexible, and they allow travel managers to customize policies based on evolving assessments, objectives and requirements.
While these changes may look small and irrelevant at first, setting travel policies with the intent to save can result in a noticeable behaviour change from your travellers.
In the long term, this can significantly boost the efficiency of your travel programs and have a positive effect on your ROI and overall profitability.
To ensure efficiency and competitiveness, companies with a travelling workforce need flexible and responsive tools that allow them to manage otherwise complex tasks with ease and speed.
TruTrip offers user-friendly and easy-to-learn policy customization tools that can reduce travel costs significantly while ensuring business objectives are met effectively.Start the journey to smarter travel management with TruTrip today. Book a demo or sign up for a free trial to experience next-level policy customization.
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