BBB Small Business Advice on Keeping
Travel Costs Down
With high fuel prices looking like they’re here to stay now, the
rise in the cost of travel means the cost of doing business for many
companies will continue to put a serious squeeze on profits.
Better Business Bureau is offering advice for small business
owners on how to reduce travel expenses and preserve the bottom line.
According to the American Express Global Business Travel
Forecast, the average cost of a domestic business trip —
including airfare, lodging and car rental costs — will rise six
percent by the end of 2008 to $1,110. The average cost of
an international business trip will rise nearly seven percent to $3,171.
Many businesses are contending with the increase in travel
costs by raising prices and cutting down on travel. The latest
Small Business Research Board study found that 41 percent of
the businesses surveyed have raised prices in response to the
increase in fuel costs. For those businesses adjusting to an
increase in fuel prices, 20 percent have already reduced business travel.
“Travel expenses are simply a part of doing business whether
it’s flying to China or renting a car in Wilmington, and many
small businesses are really feeling the pressure as the cost
of fuel rises,” said Christine Sauers, BBB of Delaware President.
“In highly competitive industries, raising prices might not
be an option for a business and instead, management needs
to look for ways to cut travel costs.”
BBB offers the following advice on how to reduce travel costs
and stay in the black:
While nothing can replace the work that is achieved with a
face-to-face meeting, many businesses are reducing travel
costs by conducting meetings and training through video
conferencing. Some businesses have been able to cut travel
costs by as much as 60 percent by relying on Web-based
or more traditional video conferencing systems instead of
flying across the country or around the world.
While up-front set-up costs can be substantial – upwards of
$350,000 for a top-of-the-line room dedicated solely to video
conferencing – companies that have geographically dispersed
workforces, supply chains and customers, and who are taking
full advantage of these type services, are finding they can
recoup the cost in as little as one year.
Establish Reduced Rate Agreements.
Many major hotel and rental car companies will offer reduced
rate deals for businesses through a contractual agreement.
In exchange for the lower costs, the business establishes
the company as a preferred vendor. Before entering into an
agreement with a specific company, the business owner
should make sure that the hotel or rental car company offers
the most convenient services and locations for the travel
needs of the business.
Dedicate a staff member to tracking down deals.
With countless Web sites offering discounted travel, finding
deals can become a full time job. While dedicating a staff member
to the sole task of booking travel seems like a counter-intuitive
way to save money, some companies that are spending significant
amounts on travel have found that the added salary expense
is indeed less than the savings. It also allows the staff to
spend more time doing their own job – such as tracking
down sales leads – rather than tracking down travel deals.
The most recent National Business Travel Association survey
found that 16 percent of respondents planned to tighten
their travel policies to ban or limit travel in first or business
class compared to only seven percent in 2006.
Tough times call for tough measures and while a small business
owner might not make any fans by limiting travel perks, it’s
often necessary. Business owners should consider establishing
travel policies for employees that include guidelines on
booking flights, using preferred vendors and adhering to
spending limits for entertainment and meals.
For more advice you can trust on small business management,
visit BBB online at: www.bbb.org.