How to Save Money on Business Travel

Saving money on business travel is a top priority for nearly every company, but the way most organizations approach it is fundamentally flawed. They often resort to blunt instruments like travel freezes or overly restrictive policies that frustrate employees and can actually hinder business growth. The secret to effective cost savings isn't about stopping travel; it's about traveling smarter. A strategic, technology-driven approach can significantly reduce your travel and expense (T&E) spend by 15-25% or more, all while improving efficiency and the traveler experience.

This guide provides a comprehensive look at the most effective, proven strategies for saving money on business travel. These aren't theoretical ideas; they are practical, actionable steps that you can implement to make a real impact on your bottom line.

Strategy 1: Mandate and Automate an Advance Booking Policy

This is the most important and impactful cost-saving strategy, bar none. The price of airfare and hotels operates on a "yield management" model, meaning prices increase dramatically as the travel date approaches.

The Tactic: Implement a firm travel policy that requires all flights to be booked at least 14 days in advance and hotels at least 7 days in advance.
Why It Works: A flight booked within a week of departure can be 50-75% more expensive than the same flight booked just two weeks earlier. The savings are massive and immediate.
How to Make It Work: A written rule isn't enough. You must use a travel management software to automate this policy. The system should automatically flag last-minute bookings and require a higher level of management approval. This creates a powerful incentive for employees to plan their travel proactively.

Strategy 2: Centralize All Bookings for 100% Visibility

You cannot control what you cannot see. If your employees are booking travel on various consumer websites ("rogue booking"), you have no control over their spending and no data to analyze.

The Tactic: Your travel policy must mandate that 100% of business travel is booked through your company's single, official online booking tool.
Why It Works: Centralization is the foundation of control. It ensures that every single booking is subject to your company's travel policy, goes through the proper approval workflow, and is captured for data analysis. This is also a critical component of your Duty of Care, as it's the only way to reliably know where your travelers are in an emergency.
How to Make It Work: Choose a booking platform with a great user experience. If the official tool is easy to use and provides a wide range of travel options, employees will be much more likely to use it.

Strategy 3: Automate the Recovery of Unused Ticket Credits

When a non-refundable flight is canceled, the value of that ticket typically becomes a credit for future travel. For most companies, this is lost money. Manually tracking these credits is a logistical nightmare.

The Tactic: Use a travel management platform with an integrated, automated "credit bank."
Why It Works: This is a direct recovery of cash that would otherwise be forfeited. The system automatically captures the value of any unused ticket, tracks its expiration date, and proactively prompts the traveler to apply the credit on their next booking with that airline.
How to Make It Work: This is a purely technological solution. The platform, like Routespring, does all the work in the background. This feature alone can often save a company 5-10% of its total annual airfare spend.

Strategy 4: Eliminate Expense Reports for Major Costs with Centralized Payments

The administrative time spent processing expense reports is a huge "soft cost." A more efficient model eliminates the need for most reports in the first place.

The Tactic: Implement a centralized payment system within your travel platform. The company pays for all major pre-bookable expenses like flights and hotels directly.
Why It Works: This eliminates the need for employees to use their personal credit cards and wait for reimbursement, which is a major boost to employee morale. More importantly for the finance team, it means that the expense data for these large transactions is captured and reconciled automatically, with no manual expense report required.
How to Make It Work: This requires a travel platform that has integrated payment capabilities, allowing you to use a central corporate card or virtual cards for bookings.

Strategy 5: Use Your Data to Negotiate with Hotels

While negotiating with airlines is difficult for most companies, negotiating with hotels is a very achievable way to save money.

The Tactic: Use your travel platform's analytics to identify the cities you travel to most and the specific hotels your employees are already using.
Why It Works: Armed with hard data showing your volume of room nights, you have significant leverage to negotiate a corporate rate that is 10-20% lower than the public rate.
How to Make It Work: Consolidating your bookings onto one platform gives you the clean, centralized data you need for these negotiations. A guide to hotel negotiation can walk you through the specific steps.

Strategy 6: Be Smart About Ancillary Fees

The price of a flight is no longer just the fare. Ancillary fees for bags, seats, and other extras can add up.

The Tactic: Your travel policy should be explicit about which ancillary fees are reimbursable.
Why It Works: The policy might state that the company will pay for the first checked bag, but not for premium seat selection or priority boarding. This prevents uncontrolled spending on non-essential extras.

By focusing on these proven, high-impact strategies, you can build a travel program that is both cost-effective and highly efficient. It is about using policy and technology to create a system that naturally guides employees toward smarter spending decisions, delivering sustainable savings for your business.

Frequently Asked Questions (FAQ)

1. What is the single easiest 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 use a travel management software or to let employees book on their own? It is almost always significantly cheaper in the long run to use a travel management software. While there may be a fee for the software, the savings it delivers through policy enforcement, unused credit recovery, and administrative efficiency far outweigh the cost. Letting employees book on their own is a false economy because it leads to a complete lack of control over spending.

3. Should we prohibit employees from flying on specific expensive airlines? A better approach is to use a "lowest logical fare" policy. This allows an employee to book on any airline, as long as the flight they choose is the most cost-effective option that doesn't add an unreasonable amount of travel time. A modern booking tool can enforce this automatically, guiding users to the smartest choice regardless of the carrier.

4. How do we save money on international travel, which is always expensive? All of the same principles apply, but they are even more critical for international travel. Advance booking is essential, as last-minute international fares are extremely high. Also, a clear policy on cabin class (e.g., allowing business class only for flights over 8 hours) is a major cost control lever.

5. How much can our company realistically save? For a company moving from a completely unmanaged travel process to a strategically managed one using these tips, it is very realistic to expect a reduction in total T&E spend of 15-25% in the first year alone. The savings are substantial and come from a combination of lower fares, recovered credits, and a massive reduction in administrative overhead.