5 Proven Strategies to Manage Travel Expenses and Cut Costs

For any company, managing travel and expense (T&E) spend is a critical financial discipline. It's often one of the largest controllable expenses, and without a strategic approach, it can quickly spiral out of control, leading to budget overruns and a lack of visibility. The traditional methods of cost control, like manual expense report audits and pleas for employees to "be frugal," are reactive and largely ineffective. The key to successfully managing travel expenses and achieving real, sustainable cost savings is a proactive, technology-driven approach.

This guide provides five proven, high-impact strategies that will allow your company to gain firm control over its T&E spend. These aren't just theoretical tips; they are practical, actionable steps that, when implemented through a modern travel management platform, deliver measurable results.

Strategy 1. Automate and Enforce an Advance Booking Policy

This is, without question, the single most effective strategy for cutting your company's travel costs. The pricing model for airlines and hotels is designed to charge a premium for last-minute bookings. By simply shifting your company's booking behavior, you can achieve massive savings.

The Problem: In an unmanaged travel program, employees often wait until the last minute to book their trips. This procrastination is incredibly expensive. Our own analysis of thousands of business trips found that flights booked less than 14 days in advance are, on average, 45% more expensive.
The Strategy: Implement a firm company travel policy that mandates all flights must be booked at least 14 days in advance.
How to Make it Work: A written policy is not enough. You must use a travel management software to automate the enforcement of this rule. The system should be configured to automatically flag any booking made inside the 14-day window and require a higher level of management approval. This "positive friction" creates a powerful incentive for employees to plan their travel proactively.
The Impact: A successful advance booking program can reduce your company's annual airfare spend by 15-25%. No other single strategy comes close to this level of impact.

Strategy 2. Centralize All Bookings for 100% Visibility and Control

You cannot control what you cannot see. If your employees are booking travel on a dozen different consumer websites, you have no real-time visibility into your travel spend and no way to enforce your policies.

The Strategy: Your travel policy must mandate that 100% of all business travel is booked through your company's single, official online booking tool.
Why it's a Cost-Saving Strategy:
- Policy Enforcement: It is the only way to effectively enforce your cost-saving policies, like advance booking and lowest logical fare.
- Data Consolidation: It captures all your travel spending data in one place. This data is essential for budgeting, forecasting, and, crucially, for negotiating discounts with suppliers.
- Duty of Care: It also provides a live, real-time record of your employees' locations, which is critical for traveler safety and risk management.
The Key to Success: High employee adoption is critical. To achieve this, you must provide a booking platform, like Routespring, that has a great user experience. If the official tool is as easy to use as a consumer site, your employees will willingly use it.

Strategy 3. Eliminate Out-of-Pocket Expenses with Centralized Payments

The traditional reimbursement model is a major source of inefficiency and is deeply unpopular with employees. A modern and more cost-effective approach is to have the company pay for major travel expenses directly.

The Strategy: Use a travel platform that has integrated, centralized payment capabilities. For all major, pre-bookable travel like flights and hotels, the platform uses a central company payment method (like a central corporate card or a virtual card) to pay the supplier directly at the time of booking.
The Financial Impact:
- Eliminates "Expense Report Float": You no longer have a large, unknown liability of un-submitted employee expense reports, which makes your cash flow forecasting much more accurate.
- Reduces Administrative Costs: This strategy eliminates the need for employees to file expense reports for their major travel costs. It also eliminates the time your finance team spends processing these reimbursements and reconciling the payments. The "soft cost" savings from this increase in productivity are substantial.
- Improves Morale: Employees love this. It removes the financial stress of having to put thousands of dollars of company expenses on their personal credit cards. A happier, less-stressed employee is a more productive employee.

Strategy 4. Automate the Recovery of Unused Airline Ticket Credits

This is a strategy that delivers pure, direct savings from money that is almost certainly being wasted in your current process. When a non-refundable flight is canceled, its value is converted into a credit for future travel. Manually tracking these credits is nearly impossible.

The Strategy: Use a travel platform like Routespring that has an automated "credit bank" feature.
How it Works: The system automatically identifies and tracks the value, expiration date, and associated traveler for every unused ticket. When that same employee goes to book a new flight on the same airline, the system proactively prompts them to apply the available credit.
The Impact: This is a direct, dollar-for-dollar recovery of cash that would otherwise be lost. It's common for this feature alone to save a company 5-10% of its total annual air spend.

Strategy 5. Use Your Data to Negotiate with Hotels

While negotiating with airlines can be difficult for all but the largest companies, negotiating with hotels is a very achievable and effective cost-saving strategy for almost any business with regular travel.

The Strategy: Use the consolidated spending data from your centralized travel platform to identify the hotel chains you use most frequently in your top travel destinations.
How to Execute: Approach the sales managers of those hotels with your data. Say, "Our company spent $50,000 on 200 room nights at your properties in Chicago last year. We would like to formalize this relationship and negotiate a corporate rate to consolidate that business with you."
The Impact: A negotiated corporate rate can often deliver a 10-20% discount off the public rate. It can also include valuable "soft dollar" perks like free Wi-Fi, complimentary breakfast, or more flexible cancellation policies, which further reduce your total trip cost. This is a strategy that provides sustainable, long-term savings. Our guide to hotel negotiation provides more detail on this process.

Conclusion

Managing travel expenses and cutting costs is not about being cheap; it's about being smart. It's about replacing chaotic, manual processes with streamlined, automated workflows. By implementing these five proven strategies and leveraging the power of a modern travel management platform, you can gain firm control over your T&E spend, achieve significant and sustainable cost savings, and create a more efficient and positive travel experience for your entire team.

Frequently Asked Questions (FAQ)

1. What is the single most effective way to start saving money on business travel? The easiest and most impactful first step is to implement a travel policy that mandates booking flights at least 14 days in advance and then using a travel management platform to automate the enforcement of that rule. The savings are immediate and significant.

2. Is it cheaper to let employees book on their own on consumer websites? This is a common misconception and a classic "false economy." While an employee might occasionally find a single flight that looks cheaper, an unmanaged program is always more expensive overall. This is because you have no way to enforce advance bookings, control hotel costs, recover unused credits, or capture the data needed to negotiate with suppliers. A managed program delivers far greater savings system-wide.

3. How do we get our employees to follow these cost-saving rules? You need to combine a clear policy with a great user experience. A modern booking tool that is easy to use and makes the compliant path the easiest path is key. Also, communicate the "why" behind the policies. When employees understand that their cost-conscious behavior helps the company's financial health, they are more likely to be partners in the effort.

4. We are a small business. Are these strategies realistic for us? Yes. In fact, they are even more critical for a small business where every dollar counts. Modern travel management platforms like Routespring offer affordable and scalable pricing, including free starter plans, that make these powerful cost-saving tools accessible to businesses of any size.

5. How much can we realistically save by implementing these strategies? For a company that is moving from a completely unmanaged travel process to a strategically managed one using these technology-driven strategies, a reduction in total T&E spend of 15-25% is a very realistic and achievable goal. The ROI is usually very clear and very fast.