2014: The Business Forecast:Travel Forecast, higher airfrares, costsJanuary 12, 2014
Travel trends for 2014
The economy is going strong and your business is doing well. The last thing on your mind is controlling travel costs in 2014. However, get ready for some unexpected increases in travel expenses as air fares go up due to airline consolidation and hotel rates increase due to high occupancy levels. Industry experts are predicting a modest 5 percent increase in both but we think this is overly conservative. Air fares to New York from Dallas-Fort Worth are consistently more than $1,300 and hotel rates in major cities are climbing quickly. This increase is happening when you’ll want to travel the most to support your new business. In anticipation of higher costs, there are several things you should be doing now to avoid an ugly surprise tomorrow. Following is a short list of best practices that we recommend you consider.
First, get a handle on your travel expenses and figure out how much you’re spending and where. Reports can be created from a variety of sources. The most common are expense reports and charge cards. If you’re using a travel agency, it’s a good source but tends to only include those expenses booked through the agency. For many companies, this can be less than 50 percent of the total spending. Figure out your most common destinations, the airlines you’re flying, the hotels you’re using, the car rental agencies, etc. Try to get an accurate picture of your volume and spending for each. Once you know how much you’re spending, you’ll have a good benchmark to track going forward and to negotiate potential discounts.
Second, if you’re a small company, sign up with your favorite airline’s business program. It’s a great way to get a small discount on airfares as well as obtain extra miles for future trips. American Airlines and Southwest Airlines both have them. If you have a large amount of air expenses, contact your local airline sales rep and see if the airline will give you a business discount. Many companies can get a 3 percent to 5 percent discount without too much effort.
Third, focus on reducing hotel rates. If you have a significant volume of travel to one city (or better yet, one hotel), call up the property and see whether they’ll give you a negotiated rate. The discount needs to be significant (15 percent or more) to make sense. Another option is to use free hotel shopping services like the one I founded, tripBAM.com. TripBAM will shop daily across a set of hotels selected by the traveler. As rates drop, your travelers are notified by email and can easily cancel and rebook. Average savings are around 30 percent on a majority of hotel stays.
Another easy way to save a quick 10 percent is to sign up your frequent travelers for the AAA card. AAA has some of the best hotel rates around. Cost is about $75 per year but well worth it. And make sure employees avoid wireless fees when they travel by signing up for the hotel’s frequent guest program. It costs nothing to join and can save you as much as $20 per night.
Fourth, consider using a travel agency or an online travel service. Traditional travel agency costs have come way down over the years and most have access to discounts that you can’t get on your own. They can provide advice on reducing travel costs, an online booking tool to enforce travel policy, sophisticated reporting solutions, VIP services and more. Two commonly used agencies for small businesses are Egencia (part of Expedia) and Orbitz for Business. Both give you a user-tested online booking solution combined with partial benefits of a travel agency. Don’t expect white glove service but you’ll like the price. If you want to avoid travel agency fees completely, check out a new service called TripScanner. For a small fee per month, TripScanner will capture your emailed confirmations, send alerts when a traveler is outside of policy and capture data for reporting.
Finally, consider paying for all your business travel expenses on a single card to maximize points and discounts. A small company can easily rack up 50,000 miles, which is the average cost for two tickets. Even better, consider using promotional cards that give you thousands of points just for signing up. We recently signed up for the British Airways travel card and received 100,000 points that we used on several airfares, hotel stays and car rentals.
In summary, find out what you’re spending and where, sign up for American Airlines’ and Southwest’s business programs, use the latest technology to book hotels, and buy everything on a single card to maximize points. You’ll end up saving a bunch of money.
Steve Reynolds is a founder of Dallas-Fort Worth's tripBAM.com, a website launched in April, that searches daily, and automatically, for a low hotel room rate. TripBAM customers include travel agencies, corporations, hotels and travelers.
Steve Reynolds is a founder of TripBAM.com, a website that seeks out travel prices for travel agents, corporations, hotels and travelers.