A simple guide to business travel budgets and templates: A tool to help your company start saving
Just like a travel policy is a crucial part of business travel, so is a business travel budget. The two tools should work together to keep business travellers safe and travel expenses manageable.
With travel costs rising fast, knowing how to use a travel budget is more important than ever. Global business travel spending is expected to reach record levels in 2024, and expenses like airfares and hotels have increased by 2-4% since last year. Using a business travel budget template has multiple benefits for financial planning and saving money. It gives a clear picture of total spending, helps travel planners prepare, and is essential in measuring business travel ROI.
Why do you need a business travel budget?
A business trip should always involve a travel budget. Having a budget gives you a snapshot of common travel costs like airfare, lodging, meals, and transportation. Pay attention to factors like seasonality and location to build a true estimate of travel expenses before any money has been spent.
A budget helps control spending and avoid hidden costs in two ways. First up, it shows a full list of possible expenses, so nothing is forgotten, like visa applications or conference registration fees. Second, it brings all the expense data into one place, so travellers and planners can see the total impact.
What goes into a travel budget?
Airfare: This travel cost can be one of the most expensive parts of corporate travel. To find affordable flights, look for perks and loyalty programmes or frequent flyer programmes. Timing can also bring savings. Booking more than two months ahead, avoiding weekend flights and being flexible with your dates can help lower airfare prices.
Accommodation: Balance cost and comfort. Booking accommodation near your meeting location might be a higher cost initially, but it can ultimately save time and money, especially over a long trip.
Meals: What about lunch (and breakfast and dinner)? Managing food expenses as a daily per diem or allowance is another essential budget category.
Transportation: Most business trips will need to include costs like rental cars, mass transit, or taxis.
Incidental Costs: This category covers all other expense categories, such as taxes, baggage fees, parking, and additional fees.
How to use a travel budget worksheet or template
It’s simple to fill out a travel budget template! Start with basic information about the business trip, like dates, destination, and the number of people going. Follow the steps below to get started.
- Add in your biggest expenses first. Expenses like flights and hotels can use up a lot of your budget and get more expensive as you get closer to the travel date.
- Research local prices. Look at average local prices for other expenses like meals and car rental. Business expenses like taxis can vary widely, even from city to city. Be sure to include currency exchange fees, taxes, and tips if necessary. If this is a frequent travel destination, look at previous trips to get a good idea of future expenses.
3. Set realistic expectations for each category. Public transportation can be handy in some locations or time-consuming and risky in others. Pre-booked transportation may cost more money, but it keeps travellers on time for shorter trips or important meetings.
So, what should go into a business travel budget template? To get you started, we've created a sample with the most common expense categories.
How to cut costs and save on business travel
We’ve got many tips and tricks to reduce travel expenses. The format and approach of your travel budget can deeply affect cost savings. Static budgeting sets a fixed amount of spending, while dynamic budgeting uses factors like time of travel and market conditions to set a budget. Dynamic budgeting tends to work better for travel budgets, since many aspects of travel, like airfares, are based on dynamic data-driven pricing.
What about negotiating corporate rates with hotels and airlines? If you often book with the same airlines or hotel groups, this can be a good way to reduce expenses. By partnering with a travel management company like Corporate Traveller, we’ll negotiate directly with the suppliers on your behalf to secure those rates!
More ways to maximise your travel budget
Now that you've identified your travel patterns and preferences, you can take advantage of reward programmes. Travel credit cards, frequent flyer programmes, and hotel loyalty programmes all offer perks to frequent travellers. Most of these systems operate on a tiered reward plan, so the sooner you sign up for them, the more points and benefits you earn.
Another good tip is to check for promotions or partnerships that the company or employees might already be involved in.
Many professional membership organisations and events, such as conferences or trade shows, have preferred travel vendors with promotional rates.
Get your free business travel budget template.
What are some budgeting best practices?
Set your goals and go from there. Travel budgets are part of the larger company budget, and general budgeting best practices apply here, too. Begin by thinking about company goals and business objectives. Is this year's goal to gain new customers, enter a new market, or entice existing clients to purchase more? Business strategies and budgeting will follow from answering this bigger-picture question.
Then, focus on what is currently practical. What level of spending is possible this year and this quarter? Decide what you can spend on business travel for the highest priority trips.
The next step is finding ways to reduce costs, and reviewing these efforts regularly. Corporate travel is an ever-changing environment, and there may be new ways to gain cost savings, or old methods that no longer work.
Talk to your team. Any travel policy should include an overview of travel budgeting and provide open communication with employees on what is expected. This practice goes a long way in avoiding unexpected or out-of-policy costs.
What are the common travel budget pitfalls?
Don’t make the mistake of failing to plan for peak seasons, or errors with accommodation or meal costs.
For example, meal budgets might be based on average local meal prices, but employees spending all day at a conference or seminar usually have only limited, high-priced lunch options. They might only have a plain sandwich or a couple of slices of pizza and a drink, but it could cost the price of a nice dinner out.
Each country handles taxes and fees differently, and this can easily be missed in cost estimates. These types of expenses can include:
- Tourist taxes on hotel rooms, either one-time or per-night
- Excess baggage fees, which are becoming more common as baggage allowances shrink
- An international phone plan to avoid high roaming charges
- Surcharges for online booking sites
- Extra car rental fees for alternate drop-off sites or additional drivers
If you partner with a TMC like Corporate Traveller, our experts can advise you on all these hidden costs to include in your budget.
Travel budgets look different for each company
Find the right travel budget and template for you. Careful budgeting using up-to-date travel data and budgeting best practices can help companies reduce travel costs and plan for the future while still working towards business goals.
A travel budget can be simple, but there are a few essential elements: the main expense categories, a simple budgeting system, employee participation and regular reviews of the budget for improvements.
Each company will adjust its system and processes for budgeting, but these are the basic building blocks of an effective travel budget.