The Art of Cutting Travel Expenses

by Angie Mak, 25 May 2010

1 comments

Facebook

Digg

Twitter

topics:
Business Expense Management

tags:
ancillary costs business class Concur hotel expenses T&E telepresence travel

There was a time when business travel meant you didn’t have to sweat the small stuff. Hired cars to the airport, lavish meals, and free booze with premium business-class seats on flights were part of the package for business trips.

That was BGFC – Before the Global Financial Crisis.

Post-crisis, the mindset of justifying every dollar spent on travel is still with us, which is probably a good thing. But with business activity back up in Asia, companies have no choice but to let people to travel again.

Business class and other expensive perks are still mostly out of the picture, and savings are maxed out from leveraged discounts with preferred suppliers. So where else can the finance department rein in costs when it comes to T&E?

Back to the Plane

It’s a question that’s increasingly being asked in CFO circles these days as the pace of business travel intensifies for many organisations.

According to a new American Express Business Spending survey of senior finance chiefs worldwide, 57% will maintain or increase travel spending in 2010 compared to 2009. Nearly three out of ten plan to loosen restrictions on trips to meet with new clients or for business development. And the number of CFOs who will place limits on trips for staff meetings or internal business is down to 34% -- from 81% last year.

Travel to conferences and events will also resume, with only 35% saying their business will place limits in this area. Last year, eight out of ten said they would restrict attendance to conferences and meetings.

This resurgence is coming at an inopportune time cost-wise. Another Amex survey, the 2010 Global Business Travel Forecast, estimates that an increase of as much as 15% can be expected for the total trip cost for air, hotel and ground transport elements alone, largely due to unbundled and ancillary fees.

Ancillary fees are especially piling up for travel in and to the U.S. and Europe. Passengers being charged for checked luggage, pillows, preferred seating, and guaranteed early boarding priority. It’s estimated that ancillary fees alone have brought in a windfall US$8 billion for U.S. airlines in 2009. Ancillary charges, says the U.S. National Business Travel Association’s 2010 forecast, may increase the cost of an airline ticket by 30% or more.

You can bet that a lot of those extra bucks are coming from business travellers, who have no qualms about paying for convenience when they expect to be reimbursed by their company.

Oddly, only 24% of the travel managers in the National Business Travel survey say they negotiate or plan to negotiate airlines’ ancillary fees. Nearly four out of ten say they don’t bother, partly because they think it’s a waste of time. Companies that do venture to bargain have reported free breakfasts and free Internet access at about half of their preferred hotels.

I guess you can't make cuts

Submitted by Anne Kingsy on 27 November 2011 - 3:07am

I guess you can't make cuts to the department which brings new client on board, right? This is good for the New York City hotels as well. There were several discussions about the rate of occupied rooms in hotels. Some things will go back to normal.

Comment on this article

Your name: *

E-mail: *

The content of this field is kept private and will not be shown publicly.

Homepage:

Comment: *

Web page addresses and e-mail addresses turn into links automatically.
Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd> <a> <p> <span> <div> <h1> <h2> <h3> <h4> <h5> <h6> <img> <img /> <map> <area> <hr> <br> <br /> <ul> <ol> <li> <dl> <dt> <dd> <table> <tr> <td> <em> <b> <u> <i> <strong> <font> <del> <ins> <sub> <sup> <quote> <blockquote> <pre> <address> <code> <cite> <embed> <object> <strike> <caption>
Lines and paragraphs break automatically.
Use  to create page breaks.

More information about formatting options

Verification Code

This question is for testing whether you are a human visitor and to prevent automated spam submissions.

What is the fifth word in the phrase "onanuc iwa ifonu jareve umejug"?: *

Accounting and Regulations

CFO innovation Asia Accounting and Regulation the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Accounting Regulation, IFRS, US GAAP, Tax, investor relations, corporate governance, Corporate Law, Financial Regulators, Internal Audit, Audit, Corporate Law.

Auditing, Investor Relations, Law and Compliance, Tax

Finance and Banking

CFO innovation Asia, Finance and Banking the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Corporate Finance, trade finance, treasury and risk management, capital expenditure, Banking, mergers and acquisitions

Cash and Liquidity Management, Corporate Finance, Insurance, Treasury Management

Management

CFO innovation Asia the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Finance Management, Corporate Governance, Human Resource Management, Compensation and Benefits, Mergers and Acquisitions, Professional Development, Corporate Real Estate, Risk Management, Budgeting and Forecasting, Business Process Management, Business Process Reengineering, Outsourcing.

Budgeting and Planning, Business Expense Management, Human Capital Management, Outsourcing and Shared Services, Risk Management

Metrics

Corporates, Financial Services

Technology

CFO innovation Asia Technology the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Finance Systems, Business Intelligence, EPR, Accounting software, CRM, Cloud Computing, Telecommunications, Business Process Outsourcing, Business Process Management Software.

Business Intelligence, Enterprise Software and Systems, Financial Systems, Security

CFO innovation ASIA