Shoeboxed.com Menu
Blog Menu

Posted by on Jan 21, 2014 in Productivity 101 | 0 comments

3 Money Saving Business Travel Questions & Answers

3 Money Saving Business Travel Questions & Answers

Question 1: When should you book for the best fare?

Book travel arrangements well in advance whenever possible. For business travel, that usually means at least 10 days before the scheduled trip, but no more than a month ahead of time. Ideally, you want to book travel in the two to three weeks before the trip is scheduled to take place.

It may stand to reason that the earlier you book, the better your rates will be, but that’s actually not the case. Aside from the fact that many corporate travel policies prevent trips from being booked more than 45 days in advance, trip planning platforms also seem to penalize travelers for booking too early. Typically, you can expect to pay 19% more in fares for trips booked three to six months ahead of time.

On the other hand, you can take advantage of early bird specials available for flight + hotel packages that are booked 21 to 35 days ahead of time and save anywhere from 5% – 20% off the travel costs.

For planning business trips that are but a few days away, price comparison platforms like Bing and Kayak offer airfare price prediction tools to help you gauge variances in price for specific departure and arrival dates. Users can view price forecasts for the next seven days with relatively good accuracy and make determinations on which dates would provide the best deals for immediate travel. In general, you can expect to pay more for trips booked a few days ahead of the scheduled departure date than you would for those booked at least two weeks in advance.

Question 2: Choosing Between Direct and Indirect Flights: Is the Conventional Wisdom Wrong?

There was a time when indirect flights offered a considerable price advantage over direct flights. At the close of the century, jet fuel cost less than $1 a gallon. Airlines planned routes to include layovers for picking up more passengers in well-trafficked travel hubs like Chicago and Philadelphia. This was a good plan at the time as the cost to transport passengers on an indirect flight was actually $18 less per person than on a direct flight.

In the last ten years, however, the rise in jet fuel prices has turned the tables a bit so that it is often just as affordable, if not more affordable, for passengers and airlines to fly direct than indirect. Now, the price of jet fuel is hovering right at $3 a gallon. Since about 40% of a plane’s fuel is burned up during takeoff and landing, the old practice of making multiple layover stops makes far less economic sense than it did just fifteen years ago.

Another thing to consider is the cost of productivity loss when employees traveling on business have layovers. Most major airports are now equipped with Wi-Fi hotspots, charging stations and lounges for busy travelers to check their emails and do some work. But these areas were hardly designed to offer the kind of environment where productivity can flourish. The interruptions and noise alone will reduce an employee’s productivity. Add that to the fact that a significant amount of his or her time will be spent boarding and deboarding planes and getting settled in between layovers. For a middle management professional earning $65,000 a year, that’s a loss of $31.25 for every hour of layover with an average of $69 to $470 in lost productivity.

(Bonus Article: Which travel expenses can you deduct from your taxes?)

Question 3: Can you save money by booking flights and hotel together?

Travel packages offer buyers the time-saving convenience of not having to search hotel rates and airfares separately. In truth, there isn’t always a significant enough price difference to warrant opting in for a package deal compared to the price you would pay booking employee travel and lodging arrangements separately.

The ads which run on trip planning sites like Expedia and Orbitz can be a little misleading. They may advertise users can save up to $500 by booking the flight and the hotel together. But in truth, the disclaimers, like this one published by Orbitz.com, reveal a very different story:

Savings based on all vacation package bookings with Flight + Hotel on Orbitz.com in 2012, as compared to price of the same components booked separately. Savings will vary based on origin/destination, length of trip, stay dates and selected travel supplier(s). Savings not available on all packages.

Two key things ring true here: savings are not available on all packages and the savings vary based on the details of the trip itself. A “package deal” is not always the best deal. By conducting a bit of research and pricing out a few dummy trips, I discovered companies would do well to check the prices of the travel packages versus booking the hotel and flight separately.

In a test run of five hypothetical business trips going to and from 10 popular business destination spots and remaining in a hotel for four days before returning, only two of the five trips were less expensive when the hotel and flight were booked as a package. That’s 40%. My best guess is that 60% of the time, you can find a comparable deal, and in some cases, a better deal, by booking the flight and the hotel separately.

When it comes to saving money on employee travel costs, companies fare best when they are able to plan ahead and shop around.

About The Author: This article is provided by Fit Small Business. David Waring serves as the editor-in-chief of Fit Small Business.