Business travel expenses are never static because it varies depending on several factors. Size of company, type of industry, percentage of costs and wider economic and social trends all play a part in altering expenses for business travel. Hence, it makes sense for companies to keep up to date on the trends that will alter costs for business travel. Depending on the trend, organisations can squeeze more value out of a trip, cut expenses and hopefully, build a positive PR reputation.
What are the trends affecting business travel expenses?
The sharing economy provides an alternate option.
The sharing economy has had a tremendous impact on our lives with Airbnb and Uber providing cost-effective options to hotels. While some are using the sharing economy to save thousands of dollars, organisations will look to take advantage of the sharing economy to reduce their own business travel expenses. For example, it makes more sense to rent an apartment in London or Lisbon than to pay for a hotel. Ridesharing will also have a positive impact on business travel as travel network companies (TNCs) provide transport at rates usually lower than standard cab fare.
Leisure and business combined
‘Bleisure’ a combination of business and leisure is becoming more popular with employees. When business trips involve travel to countries known for its tourist destinations, the temptation to extend the business trip by a few days is strong. Millennial employees are the demographic most likely to plan one or two days extra for leisure after business meetings are concluded. Organisations should take leisure into account when planning business travel expenses. However, it is important to note that employees tend not to spend over three days of leisure during a business trip.
Protection for female travellers
One of the most important trends that will affect business travel expenses is protection for female travellers. Women make up over 40% of travellers yet only 18% of organisations have a travel policy that addresses their unique needs. Many organisations agree that women face problems unique to them like sexual harassment, but have yet to address security and other concerns related to female travellers. Safety for female travellers should be a top priority for organisations otherwise productivity is adversely affected, which is a cost in and of itself.
Face-to-face meetings still trump video calls
Business travel continues to be strong despite the obvious cost-savings and convenience that video calls bring. A survey of 2000 men and women revealed that 81% believe that face-to-face meetings are better for building long-term relationships with their clients – even more important, 47% believe they have lost a client because they didn’t take the time to meet them face-to-face. Why are face-to-face meetings still important despite the availability of cost-effective options?
According to many entrepreneurs, face-to-face meetings ensure that participants are focused, engaged and actively partake in meetings, unlike video calls where they are more likely to be distracted doing something else.
Machine learning becomes more prominent
Machine learning and data analytics will have a much bigger impact on the analysis of business travel expenses. Machine learning allows organisations to assess large volumes of data to identify patterns and even anticipate expenses before it even occurs. Hence, making the technology a huge asset for spend management. With machine learning, auditing becomes more comprehensive and accurate than ever before, making it easier to perform other functions, like reducing fraud, cutting costs and reclaiming VAT.
Changing immigration and tax policies
Immigration and tax policies are making business travel more complicated. Local and national governments see business travel as a source of revenue, which only racks up travel expenses for the organisation. Furthermore, governments are implementing more cross-border policies to regulate the movement of people and goods across borders where violation of these rules can lead to millions in euros lost as a result of fines.
Consider these trends when planning business travel
2019 is bringing some changes to corporate travel that will no doubt affect budgeting and expenses. These trends affect business travel in 2019 and will continue to do so in 2020 and beyond. Hence, when accounting for business travel expenses, organisations need to account for changing immigration policies, safety for female travellers and the growing impact of the sharing economy.