BUSINESS

What is the ‘total cost of trip’, and why should you care?

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With many corporate travel budgets now tightening, it’s crucial to gain an accurate understanding of your company’s travel spend. This means looking beyond just airfares and accommodation costs; it should involve factoring in all other elements of a trip – to come to an understanding of the total cost of trip.

What is total cost of trip?

It’s basically what it says on the tin – the total amount of money that will be spent on an employee’s entire business trip. That includes everything work related, from taxis to train fares to meals out to bicycle rental. Only once you understand how much is being spent on the entirety of each trip will you be able to budget, plan accordingly, and evaluate the ROI of your company’s travel.

How to calculate the cost of a business trip

The average business trip taken by UK workers is typically between one and three nights, and according to Travelperk, the average spend on a business trip away is $325 per day. Many companies work out this figure by just adding airfares and hotel costs together – so that average figure could actually be wildly inaccurate. If an employee is traveling to and from an office by taxi each day they’re away, is spending $50 per day on meals and hires a limo for corporate entertaining while they’re there, that daily figure could be a lot higher. To gain an accurate picture of the total cost of trip, you should include all anticipated ground travel needs and include anything else that employees might need to spend money on while away.

There’s also another consideration – a huge amount of business trips are regional day trips. These are rarely even factored into a company’s travel budget, as they typically don’t include airfares or hotel rooms. However, these day trips are still likely to involve some form of travel – whether that’s a train journey, a taxi ride or a car hire. 

Thinking about ground travel

Buses, hire cars, taxis, trains, trams, the tube – even scooters and bicycles. There are many ways people travel besides flights, however, companies often don’t include ground travel in their travel policies or booking platforms. This means that ground travel is typically left up to employees to arrange through their own sources – leading to potentially increased costs and inaccurate travel budgets. 

Expenses such as ground travel should be worked into your corporate travel policy and, where possible, you should offer guidance or technology that can enable employees to easily book approved ground travel. That will make it easier to take a holistic approach to analyzing travel spend, and making sure you budget enough for the whole trip.

Technology can help you work out the total cost. By integrating elements such as ground travel with other more commonly accounted-for trip segments, technology can help to build a picture of how much money is currently being spent on each trip, how much money to budget, and how to control and reduce costs.

How do you integrate ground travel?

This is a fair question. Ground travel is arguably one of the most fragmented elements of travel, so the quest of managing it can seem like climbing a mountain. It’s therefore no wonder that so many companies overlook this important and costly trip element. 

However, there is help available. A ground transportation management platform can seamlessly aggregate thousands of ground travel providers into one place, enabling your employees to easily shop and book taxis, executive cars and more – the same way they book their plane tickets and hotels.

How a ground travel management platform can control travel spend

With the right platform in place, organizations can quickly gain an accurate picture of their current ground travel spend. A platform like Gett’s can integrate with company accounting systems to automatically capture the cost of their ground transport. Companies will then be able to more accurately forecast travel spend and can take the steps necessary to reduce spend. With the right finance system integration, a ground travel management platform can also negate the need for manual expense claims, which are prone to inaccuracies and can waste hours of employee time.

If you’d like to gain an accurate picture of your company’s ground travel spend, get in touch with one of our team to arrange a demo today.

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