Despite the technologies making long-range communication and collaboration easier, business travel is steadily increasing. This year, the Global Business Travel Association expects U.S. business travel spending to surpass $292 billion, representing an almost 7% uptick over last year. The jump in corporate travel expenses is being driven largely by higher prices and additional spend-per-trip.

For many companies, travel—and the costs associated with it—are a fact of business. However, just because prices are increasing doesn’t mean travel needs to take an oversized chunk out of your budget. By monitoring business travel spending, organizations can control expenses without sacrificing productivity or client relationships.

How to Know If Your Company Is Overspending on Travel

Here are 7 warning signs your company is spending too much on travel.

You Pay 24% More on Travel Than Larger Companies

A Concur study on business travel expenses found that small businesses spend about 24% more per year on travel than big companies , partly because small business travelers travel more and partly because small companies don’t have the same kind of leverage when it comes to negotiating prices. The study results showed that small business travelers spend about $2,000 a year each more than big business travelers, and they pay more for flights, accommodations, meals, and other business travel expenses.

You Don’t Set an Overall Trip Budget

In terms of reducing travel costs (and any costs for that matter), there is no substitute for effective travel budgeting. A business travel budget should be based on current prices of airfare and hotels, the costs of things at the destination, and of course what the company can afford. One excellent way you can help your travelers stick to the budget is by paying for as much of the trip in advance as possible, including airfare, hotel rooms, transportation, and any other expenses—major or minor—that can be taken care of before they hit the road.

You Don’t Have a Standard Travel Booking Process or Preferred Vendors

Have you taken the time to calculate how much time you or your employees spend searching for business travel deals and making arrangements? If not, you might be unpleasantly surprised. Although this won’t show up on the corporate travel expense report, it is still time that could be better spent doing something else. To avoid lost employee productivity and reduce time wasted, establish a protocol and a list of preferred vendors for everyone in the company to use when booking travel.

You Don’t Take Advantage of Loyalty Programs & Rewards

Hands down, the best way to spend less on travel is to take advantage of loyalty clubs or group purchasing programs . Combining points and miles with the rewards from travel credit cards can lead to significant savings

Your Employees Take Avoidable Overnight Trips

Overnight trips are expensive—first there is the trip itself, and then there is the downtime associated with driving, hanging about in airports, and so on. While many overnight trips may be unavoidable, some may be replaceable by day trips or even. avoided entirely through virtual meetings using tools like Skype, Zoom, or other video conferencing solutions. Reducing unnecessary overnight travel can save your company both time and money while improving employee productivity.

You Rely on Per Diems Without Evaluating Costs

The question of which is better, per diems or actual reimbursement, isn’t something that can be decided in a blanket manner for all companies: it depends on factors including industry, company image, the nature of client relationships, and type of travel. While many companies default to per diems to reduce the paperwork and better predict travel expenses, this may not be the best (or the least expensive) option for your company. Evaluating your corporate travel policy carefully can help determine whether per diem rates or actual reimbursements offer the best balance of cost control and employee satisfaction.

You Don’t Have Control Over Your Company’s Travel Expenditures

Most of the warning signs above are the result of one main problem: a lack of appropriate control over your company’s business travel practices. Spending some time to set travel budgets and develop policies surrounding business travel will allow you to better understand and predict its costs, so you won’t be so surprised when those expense reports come across your desk.

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Footnotes: 

  1. This year, the Global Business Travel Association expects U.S. business travel spending to surpass $292 billion, representing an almost 7% uptick over last year.
  2. Small businesses spend about 24% more per year on travel than big companies.
  3. The Points Guy’s Beginner’s Guide to Setting Up an Effective Points Strategy.