Build a corporate travel budget

Published: October 24, 2024

The average domestic plane ticket costs between $273 and $473 at the top 10 busiest US airports, according to the Bureau of Transportation Statistics. Meanwhile, a transatlantic business class ticket averages $1,845, though prices can fluctuate.

Also quite variable—depending on where the traveler is going and what choices they make—are hotel, ground transportation, and meal costs.

So if you simply ask your corporate travelers to make business travel arrangements, with no budget or parameters, you could be looking at individual expenses ranging from hundreds to thousands of dollars.

That kind of spread can mean unpredictable and sometimes exorbitant travel expenses, putting unnecessary strain on your company’s budget. Implementing a corporate travel budget lets you predict and control costs while ensuring that every team member has a consistent and fair travel experience. This article will cover 6 steps to help you create a corporate travel budget and 3 strategies to encourage team members to stay compliant.

How to create a corporate travel budget

Creating a corporate travel budget can be challenging. The main reason? Airfares and hotel rates fluctuate based on location and season. Additionally, without a plan, it’s hard to balance cost control with employee expectations. Then there’s the added element of predicting and accounting for unforeseen expenses, like last-minute changes or emergencies.

While you may find ways to deal with challenges as they arise, the following steps will help you create a corporate travel budget that’s more predictable, cost-effective, and aligned with your company’s travel needs:

1. Assess past travel data and trends

Start by gathering all travel-related expenses from the past year, including airfare, hotels, meals, and ground transportation.

Analyze this data to identify patterns, including frequently traveled routes, preferred hotels, and peak travel times. Look for any outliers or unexpected costs that may need attention.

Then use these insights to understand where most of your travel budget is spent and spot opportunities for cost-saving adjustments.

2. Define travel policy objectives

Take time to identify the primary goals of your travel program, as these will help inform your final corporate travel budget.

Your goals could include:

Minimizing costs
Prioritizing employee well-being
Maintaining compliance with company guidelines
Forming valuable partnerships with airlines and hotels

When you clearly articulate your objectives, it’s easier to create a policy that meets employees’ needs, aligns with your company’s overall strategies, and makes travel management easier.

3. Categorize expected expenses

You can more easily create (and stick to) a budget when you know what to expect before you start shelling out cash. The good news is that you can usually plan for most expenses.

Start by categorizing expenses that you know will arise during a business trip (travel management software can help):

Transportation: Flights, car rentals, rideshare, and public transit
Lodging: Hotels, Airbnb, or extended stays
Meals: Daily per diems, client dinners, and drinks
Miscellaneous: Other expenses such as baggage fees, parking, and internet charges

Within each category, consider creating subcategories to capture finer details, like economy versus business class for flights or different meal allowances by city.

4. Allocate budgets

Once you’ve categorized your expected expenses, the next step is to allocate specific budgets for each category. Start by determining how much of the overall travel budget should go to major categories like flights, ground transportation, lodging, meals, and miscellaneous expenses.

This is the perfect time to review spending data and use any trends to inform your budget allocation.

You’ll also want to adjust based on current needs or anticipated changes. For example, if you expect increased travel to a particular destination, allocate more funds to that area. Use your travel management software to set spending limits for each category, and monitor them regularly to stay on track.

5. Integrate approval processes

Establishing clear approval processes helps you control travel expenses and remain compliant with your company’s travel policy.

Define who needs to approve travel requests and at what stages. Who must approve booking a flight? Making accommodations? Organizing client meals?

Then use your travel management software to set up a streamlined process that lets managers quickly review and approve/deny requests.

6. Monitor and adjust

Use your travel management software to monitor spending in real time and identify areas where costs are higher than expected.

If your software allows, either set up alerts or require additional approvals when an employee exceeds a budget.

When you notice trends or unexpected expenses, adjust your budget allocations or policy accordingly.

Encouraging compliance with your travel budget policy

Remaining compliant with your new travel budget policy will help you keep costs under control, all while providing comfortable travel experiences for your talent. Below are 3 ways to make sure every traveler on your team follows your guidelines.

Communicate your travel policy

Clearly convey the travel budget policy to all employees before they book any trips, and let employees know the dialogue is open if they have questions or concerns.

When you communicate, don’t rely on one channel. Instead, use multiple channels—like chat, emails, team meetings, your travel software, and your company’s intranet—to reinforce the guidelines.

Also make sure the policy is easily accessible, so employees can quickly reference it when planning their travel.

Offer incentives for compliance

Want your employees to follow your policy? Make it fun for them! Offer incentives like gift cards and extra vacation days, or create a company-wide leaderboard where top savers get recognized.

You could also start a points system where employees earn rewards for booking flights early, choosing economical accommodations, or staying within meal allowances. For example, the employee who finds the most cost-effective travel option each month could receive a special bonus or public recognition.

Another idea is to offer a quarterly prize for the department that consistently adheres to the travel budget, turning compliance into a friendly competition.

Use technology

Tech is your ally in keeping travel expenses in check. Travel management software can track spending in real time and flag any out-of-policy expenses, helping everyone stay on the same page.

With travel management software, you can also automate the booking process so employees see only the options that fit within your budget guidelines. This will cut down on booking mistakes and out-of-policy spending.

These helpful tools take the guesswork out of compliance and make it easier for everyone to follow the rules.

Track budgets and ensure compliance with Uber for Business

Using Uber for Business simplifies everything related to managing ground transportation on business trips.

How? For starters, travelers can book rides in advance and view all information about their travel benefits right in Uber’s business hub. This makes it easy for travelers to understand their benefits and stay within budget.

The platform also provides finance teams with real-time visibility and control over spending through its centralized dashboard.

Plus, Uber for Business integrates into platforms like SAP Concur and Coupa. So instead of dealing with receipts, you’ll see Uber rides populate automatically on these popular platforms.

Ready to take control of your corporate travel? Get started with Uber for Business today and simplify your travel management.