Despite setbacks with new variants of COVID-19 and the surges in cases that followed, the travel industry has continued to prove its resilience throughout the challenges faced over the last two years.
In fact, 45 percent of corporate travel decision makers said their organization’s changes to travel policy due to the pandemic are only temporary, according to a recent Skift survey. In the same survey, 22 percent of respondents said their organization hadn’t changed its policy at all.
These numbers suggest that as cases decrease and the entire travel industry continues to bounce back, business travel may also return to its prepandemic levels. To prepare for the return of business travel, it’s important to plan a 2022 travel budget that best supports your teams and employees.
Here are a few steps we suggest:
1. Look back at prepandemic expenses
When you start to build a corporate travel budget, review and compare your travel expenses from previous years with normal travel rates, like 2018 and 2019.
Consider these factors: How many trips did employees take? What was the average length of their stay? Where did they travel to most and least frequently? What was the average cost of airfare, lodging, ground transportation and food during each trip?
Asking and answering these questions will give your team a comprehensive view of your company’s travel history, which can help you create a more accurate outline of your budget and guide the reallocation of funds.
2. Use the present to plan for the future
Your organization’s 2020 and 2021 travel spending can also give you important information to consider for your budget.
Though corporate travel has been significantly lower than previous years, your recent spending likely includes purchasing materials and technology that helped protect your travelers. These could include personal protective equipment, contactless payment software and extra communication materials about health and safety guidelines. Account for these types of expenses as you create your 2022 budget so that you can continue to help keep your traveling employees safe.
It’s also crucial to look ahead and plan for future expenses when creating your budget. This can be done by asking employees their expectations for business travel in the new year, planning your organization’s business trip calendar as far in advance as possible, and reviewing trends and reports from key travel industry members. Experts predict that hotel rates will rise 13 percent globally in 2022 and another 10 percent in 2023, and you’ll need to allocate funds for this increase or look for ways to control these rising costs.
As lodging expenses rise, there are steps you can take to help ensure your travelers stay within your budget. The pandemic has affected every market differently. When it comes to booking hotels, avoid looking at the national average cost. Instead, research specific markets and consider your past and current expenses to anticipate your 2022 travel spend.
Planning for the new year is key, but keep in mind, you can’t always prepare for unexpected change. Business travel managers surely didn’t plan for a global pandemic. Keep your budgets flexible and, if able, add a safety net for unplanned occurrences.
3. Consider indirect costs
The primary sources of business travel spending are airfare and accommodation; however, your budget should also factor in indirect costs. The No. 1 indirect spending culprit is time: The hours upon hours business travel managers spend researching flights and accommodations while planning trips. Plus, there’s the time administrators spend after each business trip collecting and organizing traveler’s receipts and tackling expense reports.
The sheer amount of time spent manually organizing key details for each trip can be costly. Therefore, it may be wise to budget for a digital tool to handle these tasks for your team instead.
4. Create a travel policy
A corporate travel policy is also essential for managing the expenses associated with business travel. These policies provide procedures and protocols for employee travel, and are essential to ensuring that travelers make hotel and transportation reservations that are within their company’s budget.
When creating a travel policy for your employees, there are a few factors to consider: your budget, your team members’ needs and safety, and the aspects of travel expenses that your company may pay for like food, fuel, and other trip-related expenses. Your policy should include as many aspects of travel as possible so that employees have little doubt about booking rules and other regulations. Most importantly, the policy should be clearly communicated and available for all employees.
5. Save on business travel
Looking at past years’ travel costs, considering pandemic-related expenses and factoring in indirect costs can guide your business travel budget for 2022. There’s also a simple way to save time and money on business travel: hire an expert.
According to travel and hospitality experts from Deloitte, corporate travel decision makers are taking a close look at business travel expenses in an attempt to keep costs down. In addition, these decision makers are also rethinking travel spending by promoting the use of corporate booking platforms and agents. Finding a partner that helps enable you and your teams succeed budget is a great way to support an already effective 2022 travel budget.
Greg Williams is SVP of operations at CLC Lodging.