7 Ways to Cut Business Travel Expenses for Next Year’s Budget

According to Deloitte, international business travel will account for approximately 33% of spending by US companies in 2023. And it’s only expected to rise in 2024, surpassing pre-pandemic levels with travel spending reaching a whopping $1.4 trillion.

Budgeting for business travel isn’t always easy — from flights, hotels and land transportation to business dinners and marketing materials, it can add up really fast. There will always be hiccups when it comes to traveling, but the best way to set your organization up for success is to plan ahead.

As hard as budgeting is, cutting travel costs can be even harder. That’s why setting appropriate, enforceable policies that reflect your travel budget — and getting the best rates — is so important. 

While business trips are important for corporate relationship-building and drive growth, it’s critical to stay on-budget or the costs can quickly outweigh the benefits. Let’s explore some simple ways you can adjust your annual budget and cut back on travel expenses.

1. Know your budget

It’s essential to identify and estimate major expenses like airfare, accommodation, visa fees, meals, and entertainment well in advance. Then collaborate with key internal stakeholders (like sales and marketing) to establish what they really need to hit their goals — how much travel do they actually anticipate?

Total these costs to determine a spending limit, but leave room for variation, to make sure everything goes smoothly in the case of an unexpected event.

When creating your budget, remember that not all expenses can be fully written off. For example, in 2023 the IRS will only allow 50% of the cost of most meals to be deducted as business expenses.

2. Set effective (but flexible) travel policies

Now that you know your budget, it’s time to make sure your policies will enforce your budget. 

Make sure there’s wiggle room — you don’t want your VP of Sales to have their card declined at an important client dinner. And consider priorities — for example, in some cases it might be more important to book a hotel in a prime location than to buy a more expensive plane ticket, or vice versa.

3. Keep track of spending

Make sure you have a good way to track spending. Centralizing your spend management into one system that has integrated corporate cards AND travel management tools can be a game changer. 

If you don’t know what you’re spending on travel — and can’t accurately project how much you’ll end up spending for the year — you can’t make good decisions about what and where to cut.  

4. Negotiate the best corporate negotiated rates (CNRs)

CNRs are so important to keeping costs down. Many hotels can provide travel managers with discounted rates for business travel, so it’s always worth asking. Rates are typically calculated by the frequency and volume of the business your company gives a hotel — so it literally pays to develop a good working relationship with vendors.

By keeping real-time records of how much you’re spending with each vendor, you can easily keep track of the best deals and maintain the upper hand when it comes to negotiating the best rates for your employees.

5. Plan itineraries wisely (and include those corporate negotiated rates!)

Keeping to a tight budget — or cutting costs — makes planning extremely important. To get the most of every dollar, you’ll need to use those CNRs — and understand how inventory is affecting rates. Make sure you’re using an Online Booking Tool (OBT) that has broad inventory access or that you’re using the right Travel Management Company. 

TMCs almost always negotiate CNRs based on the cumulative travel they’re booking across the agency — so take advantage of that.  

6. Actively manage on-trip business travel expenses

Don’t forget about the “E” in T&E. Entertainment, but more broadly anything that is purchased during the course of a trip, is often very hard to manage. 

Try using a modern corporate card solution, like Mesh, to pre-approve on-trip expenses, ensuring travelers stay in-policy for the entire trip — not just on the things booked in advance. This helps you stay on-budget and eliminate expense reports and reimbursements. That’s a win-win-win. Travelers will thank you, we promise. 

7. Leverage travel rewards programs

If you’re a frequent traveler, you should take advantage of rewards programs and promotions. 

Some hotels offer loyalty programs to reward guests with free nights, complimentary meals, and other benefits. And almost every airline has its own frequent flier program that allows you to earn points and redeem them for discounts, free checked bags, lounge access, and more.

Plan ahead if you want to save big on travel expenses.

With business travel spending back on the rise, it’s crucial to account for that increase in the coming year’s budget. By using the resources and travel discounts at your disposal, you can bake well-informed financial decisions right into the annual budget. 

Using a spend management software can help you stick to your budget throughout the year  with virtual cards that have embedded policy compliance and real-time spend tracking. 

Mesh Travel Management provides automated travel policy implementation, clear insights into costs, and automatic expense tracking on one central dashboard. It’s a great way to manage all your expenses in the same place.

Learn how Mesh Travel Management can save you time and money on business travel.

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