Why trust what we say?
We have booked 75,000+ trips for our customers from 1,000+ companies. We specialize in flight routing, airline/hotel pricing, credit cards, loyalty benefits and providing localized 24/7 support across the globe. We have a track record of delivering genuine savings to customers from 188 countries.
Intro
Part 1. Managing Travel
Part 2. Booking Travel
Part 3. Hacking Travel
Summary
Intro
a. Why companies still travel?
Companies still travel for many reasons such as conferences, implementation projects, candidate interviews and sales meetings. Speaking with someone face-to-face is more intimate and can lead to stronger connections and increased business.
Whether the increased business covers the cost of travel (compared to video conferencing) depends on many variables, but most companies still swear by in-person meetings.
b. Why managing team travel isn’t easy
Booking travel for yourself online at retail prices is relatively easy; the difficult part is managing travel for a team, especially a team that needs to be productive.
Here are some examples of issues:
- Credit Card Authorizations - If your company books travel on a company credit card, someone needs to handle the credit card authorization forms for all hotels and even some airlines. These need to be faxed (yes, faxed). Without these forms, airlines can deny boarding and hotels may require re-payment. Managing these forms and making sure they’re all received is a nightmare.
- Cost vs. Convenience - The most convenient itineraries typically cost 2-5 times the cheapest itineraries. If your company has no controls in place, travelers will book the most costly options. When you try to implement controls, you will need to designate someone as “bad cop” to reject exception requests. As you grow, this will become a job no one wants.
- Emergencies - People miss flights all the time. Have you ever tried to re-book a non-refundable international flight at the airport? It can cost thousands and take hours to resolve. What about a group of 20 who miss a flight and have all of their subsequent flights cancelled with no refund. It takes a ton of work to avoid spending $1000s to fix these issues.
Managing travel for a team isn’t technically complex, it just involves many moving parts and large sums of money. One error can cost thousands of dollars and days of unexpected work to fix.
Part 1. Managing Travel
a. Insourcing vs. Outsourcing
Not everyone should outsource their travel bookings and management. If you’re a small team that doesn’t travel much, you can handle it internally.
There are two ways to manage travel internally:
- Distributed (everyone books themselves), or
- Centralized (a single person books for everyone else)
The main benefit of the centralized style is a single person can hone their skills and save the company a small fortune.
However, you should only centralize travel management if you have someone dedicated to operations. If you choose an engineer, you’ll hinder their core work. Even one trip a week is enough to lose one day a week when things go wrong.
Tip: Only centralize travel management to operations staff.
When insourcing your travel becomes too much, rather than hire a travel manager internally, it makes more sense to outsource. An outsourced team has more resources and experience. Most also have a global presence and provide 24/7 support.
A few cautionary points about outsourcing your travel:
- It costs money, even if advertised as free
- It may not work as well in the beginning
- It could lead to spending even more
Free or cheap travel management services rely on commissions to survive and grow. Their commission goals are orthogonal to your savings goals. That’s because much of their effort goes towards maximizing their commissions, not improving your travel. Look at job ads for these companies: first line, “must have experience maximizing commission revenue”.
Tip: Use travel managers who don’t rely on commissions.
Even if you select a travel manager that doesn’t rely on commissions and charges you transparently upfront, it won’t go perfectly in the beginning. The travel manager needs to learn the way you work. This involves everything from your window vs. aisle preferences to whether your finance department uses cash vs. accrual accounting.
Assuming you choose a great travel manager and you invest the time to help them understand your needs, you could still end up spending more.
Have you ever searched Kayak and found better prices than your corporate travel manager? It’s because they’re limited to archaic booking systems. Most self-booking tools only use these systems too. Make sure you choose a manager who will always book the lowest price, whether on their legacy system or a cheap website like Kayak, and save you as much as possible every time.
Tip: Use travel managers who can also book on consumer sites like Kayak.
On the topic of savings, keep in mind the magic number in travel management outsourcing is 30%. That is, every travel manager promises to save you 30%. Of course none really do. They calculate this 30% from budget vs. cost using a budget they conveniently set at 30% above retail prices.
Don’t get caught up in these advertised savings or promises of proprietary deals. The landscape has changed, online is cheaper for flights and hotels do their best deals per customer. Focus on whether your manager can book from all online sources and how they dedicate themselves to improving your travel, not hunting for commissions.
Tip: Run a savings test with your travel manager against Kayak.
b. Expense Management
Booking the best travel at the lowest prices is already tough enough, then you’re confronted with expense management.
Expense management only partly relates to travel; there are many non-travel company-related expenses that also need claiming and accounting. This makes it tough to adopt the expense management system your travel manager suggests. They may know travel, but they probably don’t know your business.
At Flightfox, we work with more than 1,000 businesses, some bootstrapped and others with millions in funding, and have witnessed every expense management system available. We have two suggestions:
Suggestion #1 - For small (1-5 people) underfunded companies:
- Give each founder a credit card for company expenses only
- Each founder takes photos of receipts and sends to a bookkeeper
- The bookkeeper reconciles everything and plays “bad cop”
Here’s the key, you must hire a good low-cost bookkeeper and delegate them as “bad cop”. They will chase receipts, hunt down personal expenses and make sure everything is in order. This system may fall apart as soon as you hire traveling employees or if your team is particularly profligate, but it’s a good starting point.
Suggestion #2 - For large (5-250 people) well-funded companies:
- Book travel and major expenses on a single company credit card
- Team members pay for minor expenses themselves and file claims
- Team members provide data/receipts in a uniform format
This will be anathema for companies who’ve already struggled with this system, but we think with some work it is still the simplest way to deal with expense management.
Firstly, it puts major expenses on a single card, so reconciliation, refunds and chargebacks are easier. Secondly, minor spending is simplified; the onus of record keeping is on the spender. Lastly, with a uniform format, your bookkeeper can import the data directly to the general ledger to save time.
Many of our customers have tried issuing company cards to all traveling employees, but most end up rescinding these cards. It can work, especially if you keep the onus of record keeping on the spender, but decentralizing involves more risk and effort.
One last point, the best expense management will place spending on the right credit cards to maximize loyalty benefits. This may seem like too much, but it’s actually quite easy and the returns are immense. We will discuss the details of doing this in Credit Cards.
Part 2. Booking Travel
a. Flights
Avoid showing credit cards at check-in
Many airlines require you to show the credit card used for booking when checking in. This becomes an issue if you book travel with a single company card that travelers don’t carry.
If you are denied boarding for this reason and you have enough time to spare, you can have your office send a credit card authorization form. Most of the time, you won’t have the spare time and you will lose that flight.
You can often, not always, get around this by booking indirectly with an online travel agent (OTA). As you book, look out for any notices requiring you to show the booking card at check-in. If you see one, try another OTA or airline.
Tip: Book with OTAs to avoid showing credit cards at check-in.
Book discount fares over flexible fares
Flexible fares are those you can change for lower fees (rarely no fees) at a later date. You can typically only change dates and times, not airports and passenger names.
The problem is that a flexible fare can cost 2-3 times as much a discount fare. A flexible economy-class ticket can even cost more than a discount business-class ticket.
Too many businesses enforce policies to only book flexible fares. This costs a fortune and almost never makes sense. See this example below, first class is less than the flexible economy ticket!
If you are flying domestically and aren’t sure of your return date, just book a one-way ticket. Sure the return will be more expensive as you buy it nearer to the departure date, but often a lot cheaper than if you bought a flexible round-trip.
Some levels of elite status will even provide cheap or free same-day fare changes for domestic flights. We discuss this later in Loyalty Programs.
Tip: To maximize savings, only book discount fares.
Use websites that ticket instantly
You may use www.supercheapultrabudgetflights.biz for your personal travel, but it’s too risky for team travel.
Many less popular websites ticket by hand. This means when you pay, you aren’t guaranteed that flight. Later that day when the company tries to secure that flight for you, you may or may not actually get it.
Most of the time they’ll let you know it didn’t ticket, but some require you to call to get a refund. This is a nightmare and can take hours on the phone. It’s just not worth it to save $50 on a flight, especially when you know the lower price is probably cached from days before and likely no longer available.
Popular websites minimize price caching and re-check all prices before you book and pay. We suggest using the following:
- Direct with Airline/Hotel
- Google Flights
- Expedia
- Orbitz
- Priceline (a little less reliable)
Tip: Use popular travel websites for greater reliability.
Make sure you always get ticketed
Every provider, even airlines themselves, forget to ticket on occasion. Across all of our customers, we see this weekly. What happens is you book online, the company sends you an email confirmation, you think it’s all good, then you arrive at the airport with no flight.
A confirmation email and confirmation number are not enough.
Instead, you need to receive an eTicket number. This typically includes the airline's 3-digit ticketing code, a 4-digit form number, a 6-digit serial number, and sometimes a check digit. Without this, you don’t have a ticket, period.
When this happens and you arrive at the airport, you will need to buy a new last-minute ticket, which can cost thousands. On popular routes, the flight may be sold-out too, so you’ll have to buy business class or wait another day.
Tip: Make sure you receive an eTicket number for every booking.
Use long layovers when splitting trips
Let’s say you need to fly from Singapore to Peru. Your initial searches show very high prices, but when you split the trip, let’s say in the US, the combined price is much lower.
The risk with splitting a trip like this is missing the connection and having your second flight voided.
Most travel insurance policies will NOT cover missing connections on split tickets, and airlines certainly won’t re-book you, so missing the connection can cost a small fortune.
If you check a bag and need to re-check the bag on the connection, you really need to be careful and allow 5+ hours. If you travel carry-on only, then at least 3 hours is good.
Remember, flights can be late, immigration lines can be long, terminal transfers can take forever. Airline status and swift legs won’t help in these situations.
Tip: For split tickets, book layovers of at least 3-5 hours.
b. Hotels
Book refundable rates in most cases
Unlike flights, refundable and changeable hotel rates are relatively cheap. They could be anywhere from 5% to 25% more than the lowest rate. This makes them much more useful than flexible airline tickets, especially for teams who amend their travel plans often.
However, the landscape is changing.
There’s now a trend of refundable rates only being valid up to 24-48 hours before check-in. The booking then changes to non-refundable closer to departure. Watch out for these, especially if you tend to change your plans at the last minute.
If you almost never change your hotel bookings, then go ahead and book the discount rate. Make sure you prepay it too to avoid needing a credit card authorization form.
Tip: Book refundable rates on hotels more often than not.
Avoid issues with credit card authorizations
As mentioned, the problem with refundable rates is they aren’t prepaid, and rates that aren’t prepaid require you to present the credit card used for booking at check-in. The only way around this is to fax (boo!) an authorization form to the hotel.
This is made worse by hotels often misplacing these forms.
Like with flights, you can get around this by booking through non-airline websites, but unlike flights, you will miss out on elite benefits and cannot use a corporate discount code. If saving money with refundable rates is important to the way your team travels, then make sure to stay on top of faxing authorization forms.
Also tell travelers not to pay on their own cards if a hotel misplaces a form (or you forgot to send it). Reimbursing and reconciling takes a lot longer than quickly sending off another fax to the hotel.
Tip: Use an online fax service to send authorization forms.
Apply for corporate discount rates
Unlike airlines, hotels will regularly offer discounted rates for companies who spend enough. If your spend isn’t quite enough with the large hotel chains, check with boutique hotels.
The first step is to simply ask.
This works best when you use the same hotel often. For example, a hotel near your headquarters for job candidates, guests and employees from other offices.
We proactively secure these rates for many of our customers and have success in most cases. They then save anywhere from 10% to 50% with those rates.
Tip: If you use a hotel often, simply ask for a discount rate.
Look for free shuttle services
When booking hotels to accompany flights, also account for the cost to transfer to and from the airport. You may book a lower quality hotel for a $20 saving, but then spend $50 each way for an Uber from the airport.
Luckily, some hotels offer a free shuttle service.
The savings are especially significant for single night stays. A cheaper hotel may be $120, whereas a hotel with a free shuttle service could be $150. The cost including these transfers would then be $220 and $150 respectively.
Some hotels also offer a paid shuttle service. This can still save money and time depending on the price of hotels without competing services.
Tip: Book hotels with shuttles when transfers are expensive.
Consider vacation rentals too
A few years ago, vacation rentals (Airbnb, VRBO, etc.) were too much work for business travel. You’d have to meet the host at a predetermined time, hope they actually arrived, then deal with those who forgot to restock towels and coffee.
Today, they’re becoming better for business travel.
Here are a few cases when you should check vacation rentals:
- Hotels are sold-out
- Hotels are expensive
- Trip is for team building
- Stay is for a week or more
Vacation rentals are still more work, especially when a host cancels at the last minute, but they really are becoming better for business travel.
Tip: Check Airbnb/VRBO/etc for savings and availability.
c. Cars
Quite simply, you shouldn’t rent cars.
With Uber, Lyft and similar services, the hassle of renting cars is just not worth it. In many cases, using a car service will be cheaper than renting a car. When it’s not, it still may be cheaper when you consider the time it takes to collect the car, park the car, pay for parking ($20-50/day at the hotel), refuel the car, and drop off the car.
From the many thousands of trips we have booked, less than 1% involve a rental car.
If you’re still unsure, just think back to that time when you spent more than an hour waiting to collect a car. At the time, it probably seemed like the most maddening thing in the universe. All of that is avoided using a car service.
If you must rent a car, for example in remote destinations, you can save by booking a car “off-lot”, meaning you need a shuttle from the airport to collect/return the car. However, the savings are rarely worth it and it can drive your travelers crazy when they have to wait another 20 minutes for the car rental shuttle.
Tip: Use instant car services over rentals to save time and money.
Part 3. Hacking Travel
a. Savings
Include a Saturday in international round-trip flights
Airlines know most business travelers travel during the week. By including a Saturday in a booking, you can save more than 50%.
Here’s an example:
- Non-stop San Francisco to London - Monday to Friday = $2896
- Non-stop San Francisco to London - Monday to Sunday = $888
This example saves almost 70%. You can use the additional $2,000 to pay for the extra hotel nights and still have a lot left.
Tip: Include a Saturday in flight bookings to save.
Check for two one-way flights
Using the same example as above, let’s assume you absolutely must return on the Friday and still want non-stop flights.
You’ll remember,
- Non-stop San Francisco to London - Monday to Friday = $2896
Now, let’s split these trips into two one-ways
- Non-stop San Francisco to London - Monday to Friday = $1,783
This isn’t as cheap as including Saturday, but still a lot cheaper than booking the round-trip. One-ways will allow for a lot more freedom when the traveler’s schedule is undecided.
Tip: When round-trips are expensive, check two one-ways.
Check multiple websites
The most effective way to check flight and hotel prices is to check a handful of websites known for having the best deals. At Flightfox, we check hundreds of providers, brokers and consolidators for every trip, but you only need a few to do a reasonably good job.
If I had to choose three:
- Kayak
- Orbitz
- Skyscanner
Most people have a favorite, let’s say Google Flights. If you only use Google Flights, you will pay a lot more for your flights on average. We run thousands of searches every day and we often see prices at $100s or even $1000s higher on Google Flights; the same goes for all websites.
If you have access to a coder, get them to spend 10 minutes to whip up a simple interface that takes your flight/hotel input and opens up a few search engines with that input. This alone will save many hours of searching.
Tip: Search 3-5 of the best websites for every trip.
Buy and use points/miles when it makes sense
This applies to both flights and hotels. It will save you more on flights, but work more often on hotels.
Let’s look at a flight example.
Imagine you want to fly one-way in business class to Tokyo. You’d like to secure more meetings in Asia before returning to the US, but you don’t have anything yet, so you want the flexibility of a one-way. You would also like to fly non-stop because it will save 5 or so hours.
This flight on ANA looks perfect, but it’s $4,295.
Let’s check award space, just in case.
The exact same flight is bookable for 65,000 United miles, plus $5.60 in taxes. United currently has a promo selling their miles that results in a cost of $1137.50 + $5.60 in taxes, which equals $1,143. That’s a saving of more than 70%.
We do this a lot for customers and save them a fortune. It’s even easier with hotels since more hotels sell their own points. They release more award space too.
Tip: Buying and using miles for travel can save a fortune.
Add another destination
Airlines maximize revenue by segmenting customers. If you can pay more, they want you to pay more. If you can't pay as much as other customers, they don't want to lose your business, they'll find a way for your to pay less.
This segmentation is done in many ways, for example, by destination. This means you can add a cheaper destination to an expensive detaination to drop the overall price. What's more, you can get a free vacation out of it too.
This last-minute non-stop round-trip SFO-IAH is $1,359.
Let's keep these same flights, but add a trip to Cabo. Woohoo!
You get the same SFO-IAH flights, but for only $601 (56% saving) AND a free trip.
Tip: Adding a destination can save a fortune and provide a free vacation.
b. Credit Cards
If you want to learn more about credit cards for businesses, check out our previous post here. In this post, we focus on the basics of maximizing value.
(This mostly applies if you’re based in the US. Outside of the US, signup bonuses, points earning rates, transfer partners and loyalty benefits are much less valuable. We know this because we have customers from 188 different countries.)
Only a few reward programs offer exceptional value
Almost every bank and credit card provider offers a reward program that earns a reward for your spending. You typically earn one reward point per dollar spent and can redeem those points for cash, products, services or travel.
To maximize the value of reward points, consider the following:
- The rate at which you can earn points
- The value for which you can redeem points
There are many variables, so let’s cut to the chase…
The most important requirement when choosing a credit card is that its reward points can be transferred directly to multiple airline and hotel partners.
Transferring points directly to airlines and hotel partners is how you maximize value. Other programs will instead convert your points to cash (at a low rate) to book travel at retail prices.
The difference in value is significant.
The best programs that let you transfer reward points directly to airline and hotel partners are as follows:
- American Express Membership Rewards
- Chase Ultimate Rewards
- Citi ThankYou Rewards
There are some others, especially when using airline-branded cards (more info), but the above programs have the best ea
