As we head into the remaining months of 2020, businesses will be busy either budgeting or reforecasting for 2021 – and possibly feeling more confused than ever.
2020 has had a huge impact on so many areas, and finance has not been immune to it. Businesses of all sizes have had immense pressure to continually reforecast budgets with each major announcement made as a result of COVID-19, and for many SME businesses the pressure can feel more intense due to potentially reduced resources.
It's ok to be unsure of even where to start. If it feels confusing to even attempt to work on a budget for business travel, you are certainly not alone in feeling that way.
In our recent State of the Market survey respondents advised the following in relation to their forecast travel spend in 2021 compared to pre-COVID-19 travel volumes:
- 39% were UNSURE of volumes
- 31% of respondents said their spend will DECREASE by an average of -40%
- 24% of respondents said their spend remain the SAME
- 6% of respondents will see an INCREASE in travel by an average of +17%
So while travel is viewed as the number one cost item that businesses can quickly dial back when the economic climate starts to soften, the negative impact is when business travel is a core source of revenue growth and retention. As a business you will need to be careful to temper the duration for reduced or stopped business travel without having a negative impact.
So how do you find the middle ground when it comes to budgeting for travel in 2021?
It’s no doubt a big decision to make when it comes time to press ‘go’ for travel. The main reason is that there is no precedent to something like this pandemic. But one thing remains the same – getting people together face-to-face is ultimately the best way to achieve success in business, and those businesses that get a jump start on returning to this, will have a huge advantage on their competitors.
Where to start with your travel budget for 2021:
1. Run a report on your previous year of travel spend
While next year isn’t guaranteed to be a ‘normal year’ when it comes to your employees travelling, it’s still good practice to review where you have been spending money on travel in the past.
For example how much of last year’s spend was for sales? How much was for conference and events, or managing a crisis?
A reputable Travel Management Company (TMC) will have a reporting functionality in place for this. For example Corporate Traveler gives customers the big picture view of how your dollars are being spent, and helps you make more informed decisions through tracking compliance and analysing travel patterns. With Corporate Traveller, you will also be able to talk to our Travel Managers who can help you customize and organize your reporting dashboard.
2. Get your travel policy sorted
All roads lead back to your travel policy. If you don’t have one yet, you need to make this your priority. If you have an existing policy, spend the time reviewing every section of it.
The idea isn’t to lock employees into a rigid set of rules. Instead, travel policies should help you prepare for the unpredictable while also providing consistency for your traveling employees. A clear set of travel policies can provide important behavioural guidelines that prevent confusion and overspending.
Corporate Traveler’s guide to travel policies is a great place to start and provides helpful advice on the key considerations to make when it comes to your travel policy.
3. Know what travel your organixation is expecting to do in 2021
Are there any conferences, trade shows, trainings, or other major events that you send people to every year? Be sure to ask each of your departments on the likelihood of those events going ahead in 2021. You can budget for these, and if they do get cancelled, you can factor the cancellation in to your reforecasting process.
4. Control business travel costs
Having a budget is great, but it’s not so great if you blow it out of the water in the first half of the year.
Work with your TMC to check if you are getting the best deal possible with airlines, hotel providers and ground transportation. Corporate Traveler is a preferred partner to the biggest airlines, hotel brands and ground transport companies in the world. Corporate Traveler customers have access to the most competitive rates and fares from our travel partners, the complete Expedia Affiliate Network (EAN) and exclusive deals you can’t find anywhere else.
The final tip – don’t stress!