By Joe Brancatelli
November 10, 2010 -- If you believe the management consultants and other supposed business experts, travel and entertainment spending is a surprising third on the list of corporate expenses after salaries and benefits and information-technology.
I don't know if I believe that--or estimates that T&E spending consumes tens of billions of corporate dollars annually--but I can tell you this: I've been on the road for more than 30 years, and not a week has passed without someone talking about the urgent need to get travel and entertainment costs under control.
Here are some fresh ways to tame the T&E monster without making business travel even more of a grind than it already is.
Is the Trip Necessary?
If you only manage T&E expenses after trip planning begins, you're dealing with tip-of-the-iceberg stuff. Survey after survey in recent years has pointed out the painfully obvious: As many as one in three business trips simply aren't necessary and could easily have been replaced by teleconferences, a phone call, or a timely email or overnight package. Another money-waster, especially for small businesses: sending too many people to a conference or trade show. If you're planning to send four employees to an event, consider sending three. That's a 25 percent T&E savings before you even start looking at flights and hotels.
Resist the Next-Flight-Out Syndrome
As mentioned in Seat 2B's airline-ticket buying guide, letting a client bully you into traveling on short notice is a brutal cash drain. Last-minute, unplanned, full-price itineraries are the worst bargains in travel and the biggest strain on T&E budgets. Are there times you really do need to be on the next flight? Sure. But weigh the costs against the potential benefits and you'll find that very few trips demand the hop-on-the-next-flight treatment. And don't be shy: Share your analysis with clients or customers. Since they are likely to be paying for your T&E expenditures in the long run, explain the realities. Most will gladly rescind the "be here now" command when they realize the cost.
Step Down a Notch
A tighter T&E budget needn't mean a mindless ban on travel, however. Looking for better ways to do flights and hotels can save scads of dollars. No one wants to fly coach, of course, but the gap between the front and the back of the bus is so huge—an unrestricted business-class seat on an international flight can cost 15 times more than an advance-purchase coach ticket—that reality can't be ignored. One potential solution: the two-seat scenario. Instead of a business-class seat, buy two adjacent coach seats. That'll give you adequate personal space at a fraction of the cost. (By the way, make sure you alert the airline to your plans in advance. Many will cleverly make the empty-seat reservation under the name Mr. E. Seat.) As explained in Seat 2B's hotel rates shopping guide, big, splashy, expensive five-star hotels aren't your only option anymore. Solid three-star chains (Hilton Garden Inn, Courtyard by Marriott, Holiday Inn Express, Hyatt Place) offer terrific value propositions for business travelers.
Search for Alternatives
The basic tip here hasn't changed in decades: Southwest Airlines is often cheaper and always more flexible (no roundtrips required for the lowest fare) than most other carriers. And now its much more reasonable travel policy (two free checked bags and no change or standby fees) make it the end-to-end value leader. The problem: Southwest flights aren't available via all ticket-distribution channels. At least domestically, make sure you check Southwest.com before booking an itinerary. JetBlue Airways (more legroom at each seat, free TVs, a free checked bag) and AirTran Airways (a cheap upgrade to business class and fleetwide WiFi) are contenders too. Internationally, carriers are rapidly installing "premium economy" cabins, which offer more spacious seats for a small premium over coach. And don't forget that even the traditional carriers now sell deeply discounted business-class fares if you book far enough ahead. I just arranged business-class seats to Europe in early January for $1,800 roundtrip each, about 70 percent off the price of the walk-up fare.
Trade Miles and Points for Dollars
Especially when you must travel on short notice, it may be more cost effective to use airline miles and hotel points for rewards than to pay last-minute prices. Small businesses can reap surprising savings if they ask employees to use their own frequent-flyer and frequent-guest rewards for a business trip. It's not difficult, either. Calculate the price of a paid flight, then ask your employee if they'd use one of their awards in exchange for a cash payment equal to a reasonable percentage of what it would cost to buy the seat. It's win-win: The company saves some money and the employee reaps some hard cash. And it's not against any airline or hotel rules because the person who earned the award is using the award for their own travel. But never buy an award from an employee to use for someone else in your firm. That is against the program rules and airlines are notoriously punitive if they find out.
Banish the Black Car
Black-car service to and from airports is a notorious black hole in T&E budgets. In some large cities, public transportation is a perfectly reasonable alternative to car transportation. Elsewhere, use taxis, airport buses, or shared shuttle vans. (Go Airport Shuttle and the ubiquitous blue SuperShuttle vans operate nationwide.) Another alternative: Drive your own car to the airport and use off-airport parking lots. They'll save you money and shuttle you directly to your terminal. Some throw in an oil change or car wash while you're gone. (There are now several consortia of off-airport lots online. About Airport Parking is an example.)
Plug the Budget Leaks
Far too many T&E budgets are wrecked by small but consistent cash drains:
• Hotel minibars are a long-standing complaint. Prices for basics like bottled water and snacks are appalling. Make your purchases at a nearby convenience shop and keep a small stock on hand in your hotel room.
• On-the-road access to the Internet can also be a budget buster, especially at hotels and airports. Boingo.com offers hundreds of thousands of WiFi hot spots, including airports and hotels, and charges as little as $9.95 a month for unlimited domestic access. That's cheaper than many full-service hotels charge for a single night of service.
• Beware the scourge of travel taxes. One example: On November 1, the United Kingdom raised its "air passenger duty" to as much as 120 pounds (about $190) for a premium-class ticket. You can't beat the tax if you need to fly to Britain, but you can certainly change planes elsewhere if you have been using London as a transfer point.
• If you travel internationally, make sure you carry a credit card that doesn't charge foreign-transaction fees. All Capital One cards are fee free, and Chase's cards for Priority Club Rewards, Hyatt, and British Airways don't have forex charges.
Companies have been cutting back on lavish meals and entertainment for years as the price of four-star restaurant dining has skyrocketed. But why are you playing that game anyway? The most interesting meals in many destinations now is ethnic cuisine that you can't get (or can't get done well) at home. Haunt the Chowhound and other foodie boards for tips about the best new places. Your palate will appreciate it. So will your wallet. Extra bonus: You'll look like an in-the-know bon vivant when you suggest a meal at the latest ethnic hot spot in your client's home town.
The Fine Print…
The recent Yemeni parcel-bomb scare has now impacted passenger air travel. Secretary of Homeland Security Janet Napolitano announced on Monday that toner and ink cartridges weighing more than 16 ounces are banned from both carry-on and checked bags.
ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.
THE FINE PRINT This column is Copyright © 2010 American City Business Journals. All rights reserved. Reprinted with permission. JoeSentMe.com is Copyright © 2010 by Joe Brancatelli. All rights reserved.