Budget Allocation is important for all types of business, irrespective of the industry it belongs to. Without budgeting, the chances of spending more and facing a cash crunch, later on, are high. Travel managers in the last two years seem to have understood the need to plan for all unexpected situations. The Covid pandemic witnessed stringent lockdowns and the closure of travel businesses for two years. However, travel in recent times is reported to be much higher than last year. However, until 2024, pre-pandemic levels are not likely to be achieved.
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The truth is that the corporate travel future is filled with uncertainty. However, it is something that does not come as a surprise if some factors are taken into account. New virus variants are emerging across the world. Video communication platforms have taken center stage for conducting business meetings and Event Management. Few companies even have reduced travel budgets. About 45% of companies claimed the Covid political changes introduced are temporary. 22% claimed their policies are not altered in any manner. Corporate travel is moving in a positive direction with many countries slowly easing global travel bans.
Planning Business Travel Budget
With corporate travel increasing, it is high time to plan 2023 budgets so as to meet your employees’ needs. Another thing to consider is traveling cost is likely to rise. Get to know some industry expectations and suggestions to ensure deriving proper budgeting.
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Corporate travel predictions
Global corporate travel spending is projected to surge in 2023. However, it is only in 2024 that $1.4 trillion in pre-pandemic spending is expected. This year, pent-up demand is likely to boost corporate travel spending to cross $1 trillion. Also, 13% rise is expected in global hotel rates. It also includes higher room rates in upscale hotels. The latter is expected to witness higher occupancy levels with corporate travel returning. But airfare is anticipated to not surge more than 3.3%. Payroll Management software should be used to ensure being on the right track.
Smart corporate travel budget tips for 2023
1. Prepare for unexpected events:
Speculation remains as to how corporate travel can return to its normalcy. There are several events held that show that businesses are still interested to conduct Event Management in person. With corporate travel rebounding, higher rates are expected than what was being charged before Covid-19. Travel managers may use appropriate travel management platforms for increasing work efficiency.
2. Optimize budgets by relying upon technology:
There is available Payroll Management software that allows efficient and effective budgeting. It previously focused to reduce process expense costs. With time it expanded into integrating corporate policies and employee spending habits associated with corporate travel expenses. Such digital tools are designed to manage time-intensive tasks. It includes locating traveling employees during emergencies, reconciling & auditing travel expenses, and identifying hotels having pre-negotiated rates.
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3. Plan-wise travel spending:
Budget Allocation for corporate travel is of utmost importance. Consider the business trip numbers to take, the average duration of stay, entertainment, lodging, food, ground transportation, and airfare cost. Then consider those areas where money was spent during pandemic times. Were PPE kits (Personal Protective Equipment) provided to employees? Employees should be kept comfortable and safe while traveling. Hence identify what essential things to include in the budget. Surveys were conducted on people requiring travel a lot for their jobs. Among them 62% were required to use their personal vehicles, 25% rent a car and 46% caught flights. It suggests that organizations should increase their budget for ground transportation like gasoline.
Thus, a Business Travel budget should be developed taking into consideration the above aspects. This way, businesses can reach their set objectives and ensure not exceeding their quota.
Source: Cosmo Politian