It’s easy to write-off travel expenses with a shrug, chalking them up to ‘the cost of doing business’, but if ‘spend less on travel’ is one of your company’s resolutions for 2018, booking trips with more advance notice is the single most effective way of decreasing your company’s travel spend.
Easier said than done, right?
“What if things change with our clients and we don't need to visit them as often? What if positional changes occur and the employee usually making these trips is no longer with us? What if we just need to make changes to the time we fly out?” What if, what if, what if…
If your list of ‘what ifs’ is more possible than probable, forget them. Take the gamble and side with probability.
Airlines know the uncertainty of business travel well – it’s their bread and butter. While flexible leisure travellers wait for sale fares and can plan their trips around the best priced ticket they can find, those travelling on business generally don’t have this luxury. They are usually subject to an airline’s most expensive fares in exchange for the perfect flight times on last minute bookings. Unless, of course, you plan right, essentially beating airlines at their own game.
Is the person responsible for booking travel on behalf of your company looking at the entire year ahead? Or working month to month, as circumstances arise?
Most companies do business with the same out-of-town companies, year after year, visiting each other at roughly the same time each year, whether it’s monthly, quarterly or annually. Sure, sometimes things come up and travel is postponed by a week or two, but more often than not, the trip is still eventually made. Planning and booking a year’s or even a quarter's worth of ‘probable’ travel can save a company thousands of dollars yearly, even if half of those prematurely booked trips end up being changed.
When planning your company’s trips for the year, there are a few things all businesses should consider if trying to save money.
Airline ticket prices, whether domestic or international, Economy or Business, are in part determined by how much in advance they are purchased. Generally speaking, the more in advance they are booked, the lower the cost. Fares are usually (not always) broken down to 45, 30, 21, 14 and 7-days prior to departure for international flights, with the most expensive pricing reserved for bookings within a week of flying. When flying within North America the advance purchase windows tend to be closer in, at 14, 10, 7 and 3 days prior to departure.
If there’s a decent chance a trip may need to be taken two months from now – book it today, even if within North America, because the number of tickets available in each of the more economical options is always limited and can often sell out before their advance purchase deadline even comes close. Depending on the destination and class of service, this alone can save you hundreds, if not thousands of dollars. If plans change and you need to alter your travel dates, you should still come out ahead on average.
If business allows, save the bulk of your travel for the spring and fall. Winter isn’t a bad time too if you avoid the holidays. Speaking of holidays (and long weekends), no matter the holiday, fares will be higher as leisure demand soars and space dwindles. When school is out, all fares tend to rise while availability declines. Likewise, for international travel in particular, if the destination experiences different demand patterns than our own, that could put them in to 'high season' sort of pricing, even if those pressures are not in place here at home (think southern hemisphere summer, local religious or cultural events, or even major trade shows).
By now, everyone understands there are various fare levels within Economy, but this is equally true of Premium Economy and Business Class. If your business travel is with Air Canada, then without question, anyone travelling in Economy Class should be booking at least a 'Flex' fare. This 'branded fare' offers much more generous change fees than the cheaper 'Tango' fares and also gives travellers 100% status miles and other attributes, which are so critical to easing that road warrior's travel experience. WestJet also tier their fares and likewise their 'Flex' fare represents best value for those who are likely to need to change dates or times. For those flying Business Class, it's always worth comparing the fully flexible, refundable fares to the discounted but restricted options which could prove limited in scope when it comes to changes.
Even though the flexible options are more expensive, the freedom they offer in terms of changes and refunds, especially for business travellers, heavily outweigh any savings if plans change and the ticket must be changed.
BAGGAGE, LOUNGES & FREQUENT FLYER POINTS
There are other key attributes to booking a higher fare too. Although most business travellers have baggage down to a science, those needing to travel with anything more than a carry-on will benefit from at least one complimentary checked bag if booking the higher fare categories – both in Economy as well as in Business Class. Priority check-in, baggage handling and boarding are also included, as are meal services on certain higher fare types and routes.
If you’re one that enjoys the spoils of Air Canada’s Maple Leaf Lounges before or after your flight, a mere $25 will give you access with an Economy Class fully flexible 'Latitude' fare or for $50 when purchasing a 'Flex' fare. All Business Class guests are invited, free of charge.
Everyone loves their Aeroplan points, right? By booking the higher Air Canada fares, customers accrue 100% points in 'Flex', 125% with 'Latitude' and 150% in Business Class (flexible or not). Purchasing a 'Tango' fare will only accrue 25% mileage for domestic travel and up to 50% across their rest of their network.
HOTELS & CAR RENTALS
Hotels have a similar seasonality system to airlines but are more supply/demand instead of advance purchase based. If you are attending a large annual conference or trade show and know things will be busy, book early. And the same is true even if you are not attending a large event but need to be in town when one is on. Think TIFF in Toronto (every September), or New York Fashion Week (every February) etc. Hotels that are corporate focused see business travel driving revenue primarily Sunday nights to Thursday nights, so planning weekend extensions (bleisure anyone?) or team getaways over the weekend can prove far more cost effective on a per night basis, and can often tie in to a cheaper airfare if you are not flying on peak business demand flights.
Car rental rates tend to stay the same year-round and they either have a car available or they don’t. There is no benefit in waiting to book your car last minute. They are generally refundable with even a day’s notice so it’s best to book them as soon as possible. And like every other travel component where supply is essentially fixed, demand pushes the price up, so get that booking in before the pack.
If you are interested in finding out more about ideas to save your business time and money, feel free to contact us now.