Friday, July 12, 2024
CEOWORLD magazine - Latest - CEO Briefing - The Impact of Inflation on International Business Travel Plans

CEO Briefing

The Impact of Inflation on International Business Travel Plans

Robert Hoffman

Inflation has had a direct impact on business travel due to rising prices and changing currency values. This article will discuss strategies to help business owners ensure their employees can continue to travel while being financially responsible.

Although the days of undisrupted business travel are coming back, inflation has been a major player in the pace of that timeline. According to Reuters, business travel spending to pre-pandemic levels is likely to be delayed by 18 months to 2026 due to inflation.

Despite the delay, business travel trends show that travel is still on the way up, with spending rebounding 5.5% in 2021 — a notable improvement.

What is the effect of inflation on international business travel?

Experts are already warning companies they’re going to spend more than they expect this season. The “average ticket price” — and every other metric used to measure the price of travel — no longer exists. In fact, prices are so high that according to the U.S. Bureau of Labor Statistics (as reported by FRED), airline prices in major U.S. cities have shot up more than 30% since 2020.

Hotels are also charging higher rates to accommodate the growing demand, and with the cost of food rising and post-pandemic supply-chain disruptions, companies might be less forgiving on daily budgets for dining. Plus, hospitality businesses are finding themselves chronically understaffed, with labor shortages prompting wage hikes and larger bills for customers.

These are not just one-time cost increases, either; many experts believe that we will continue to see inflation impact business travel for the foreseeable future.

Strategies to combat inflation during international business travel

So, how can you manage your business travel spending in a time of high inflation? Here are some tips to help keep your costs down while still enjoying the benefits of international business travel:

  1. Be flexible in scheduling.
    We all know how much ticket prices vary depending on your selected arrival and departure dates. Allowing for flexibility here can streamline the booking process and allow your manager to find the best deal and take advantage of post-booking price drops.
  2. Reallocate money from other areas of your budget.
    If business travel is important to your employees and the growth of your business but you’re worried about cost, reassess your budget and choose another area to cut back on.
  3. Improve your trip approval and booking processes.
    A thorough pre-trip booking process that maps out hotels, arrival times, departures, and meals can curb unregulated spending so that more trip money is available to your employees.
  4. Leverage technology
    Apps like Kayak, TripIt, and HotelTonight can help you find the best deals on flights, hotels, and more — all from the convenience of your phone or laptop. Plus, many businesses now offer reimbursement for travel-related expenses via e-bills through services like Concur and Expensify, making it even easier to track expenses as you go.
  5. Comparison shop.
    Conduct research on sites such as Expedia, Travelocity, and Kayak, as well as airfare websites, to compare airfare prices and find the cheapest flights available.
  6. Explore airline partnerships.
    Many firms control their travel expenses by partnering with their favorite airline carriers. Your employees can get corporate discounts and fly at a negotiated rate. In addition, you may also enjoy perks like extended deadlines for ticket modifications and waived ticket-cancellation fees.
  7. Pack light.
    Remind your travelingemployees to avoid packing excess baggage that they might end up havingto pay for.
  8. “Upgrade” to coach.
    Flying coach typically means fewer delays, shorter security lines, and a more streamlined travel experience overall. Additionally, flying coach is often less expensive than business class alternatives, which allows businesses to save money and keep their travel costs under control.
  9. Consider options for accommodation.
    Your company can look into alternative accommodations like boutique hotels or Airbnbs instead of pricier chain hotels. However, the room rates vary widely even within the same hotel chain, so there is a good chance you could find a sweet deal. If you travel frequently with your team, book them in preferred hotels in order to get bulk discounts.
  10. Adjust meal spending.
    Giving your employees control over their food spending can actually lower overspending. For example, you can set a meal expense allowance each day for your employees to spend on breakfast, lunch, and dinner. Then, employees can choose individually how much to spend on each meal.
  11. Be smart about ground transportation.
    When it comes to transportation expenses, you should tell your employees to choose the most cost-effective method of getting from one place to another. You can also ask your employees to carpool with each other to the airport to save on gas money before the business trip starts. Remember, if you plan ahead and reserve parking for your employees at the airport, you can avoid paying high parking fees. You can use sites like Premier Parking or On Air Parking to get the best rate at major airports.
  12. Hire an expert.
    You may not think you need a corporate travel specialist, but the price may be worth it to rein in your overall spending. Travel specialists work with organizations all over the globe to implement customized programs and services to save you money, time, and stress.
  13. Explore rewards programs.
    Creating savings by reducing travel costs also means that your company can take full advantage of corporate reward programs, which cost nothing to join and help you earn points every time you make a booking. Once you build enough, redeem them for tickets, upgrades, and even business retreats.

The increase in travel and getting your employees back on the road might improve morale, feed creativity, and even improve business development efforts. Despite recent cost increases, many businesses are still committed to supporting their employees through frequent travels for important meetings and conferences. By implementing some of the strategies listed above, you are sure to find creative ways to balance costs with the needs of your employees and your business. Happy booking!

Written by Robert Hoffman.
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CEOWORLD magazine - Latest - CEO Briefing - The Impact of Inflation on International Business Travel Plans
Robert Hoffman
Robert Hoffman is the CEO of Xchange of America, a company established in 2008 dedicated to changing the currency exchange landscape with a more forward-thinking philosophy.

Robert Hoffman is an opinion columnist for the CEOWORLD magazine. Connect with him through LinkedIn.