Business travel costs are an essential consideration for companies of all sizes. They impact budgets and influence decisions on when and how employees are sent on trips. Global business travel spending is expected to reach a record $1.48 trillion in 2024, according to the Global Business Travel Association (GBTA), showing how well the industry has recovered from the Coronavirus (COVID-19) pandemic.
As prices continue to rise, managing business travel expenses effectively becomes more important than ever. Transportation, accommodation, meals, and other costs can quickly add up, particularly as rising inflation and increased demand drive up prices. For example, according to Skift’s Daily Lodging Report, hotel rates in the US are growing faster than inflation, with a fifth of hotels in primary markets charging average rates exceeding $200 a day.
To shed light on this, Booking.com for Business surveyed hundreds of US business travelers - employees who have traveled for business in the last twelve months - and decision-makers responsible for corporate travel bookings to ask about travel costs.
Key findings of the study:
- The average business trip cost for US-based companies is $1,771 for business travelers and $1,986 for decision-makers.
- Decision-makers spend 12% more on trips than other business travelers.
- International business travel costs can exceed $2,000 per trip, compared to domestic trips, which average around $500.
How much does the average business trip cost?
Business travel costs can vary widely depending on the purpose of the trip and the traveler’s role within the company. For example, seniority often plays a role in travel expenses. Decision-makers, such as senior management, executives, or those responsible for strategy, tend to have higher costs.
On average, non-senior business travelers spend around $1,771 per trip. This figure includes accommodation, transportation, meals, and other non-leisure expenses during the trip. However, decision-makers have an average cost of $1,986 per trip. This is often driven by the fact that more senior business travelers often have tight schedules and are required to land and attend important meetings immediately.
Decision-makers also show a better understanding of their companies’ travel policies. For example, our previous survey shows over two-fifths (45%) of decision-makers know that their policies cover medical care and travel insurance, compared to just under a third (32%) of business travelers. This greater understanding of policies could contribute to their higher travel spending, as they’re more informed about allowable expenses and what their policy covers.
In a similar survey conducted last year, we found that the average out-of-pocket spend per business trip for corporate travelers is $700, with around two-thirds (63%) of this usually going toward dining. Other common categories for out-of-pocket spending include entertainment (57%) and tips (55%).
How does the average business trip cost differ by company size?
Business trip costs generally increase with company size, with large companies spending significantly more on average ($2,095) compared to smaller ($1,783) and medium-sized ($1,549) businesses. This could be due to the scale of operations, destination choices, and travel policies differing by company size.
How are organizations managing business costs?
Managing business travel expenses is a significant challenge for organizations, as balancing the need to control budgets with keeping employees happy often proves difficult. Recording and reporting expenses is one of the most critical pain points for decision-makers and business travelers, so expense management within tools is essential. 43% of decision-makers said that expense management is a ‘must-have’ feature of travel management tools, but just 35% of business travelers shared this feeling.
Here’s a look at how businesses currently handle these expenses and their challenges:
- Expense management systems: Over a third (35%) of decision-makers report that their companies use dedicated systems to streamline their expense reporting. These tools can help automate processes and ensure compliance.
- Transactions on company credit cards: Over one in five (22%) decision-makers rely on credit cards to track booking transactions, automatically reflecting the costs in expense reports.
- Travel platforms: Over one in six (16%) decision-makers use platforms that integrate bookings and expense reporting, offering a seamless experience.
- Spreadsheets: A further 16% still rely on spreadsheets like Google Sheets or Excel, a method that, while familiar, could lead to inefficiencies and errors.
- Self-reported expenses: Over one in ten (11%) decision-makers depend on employees manually reporting expenses, often leading to delays and inaccuracies.
How bookings are paid for
Our survey also revealed the preferred payment methods for flight and accommodation bookings by business travelers:
- Company-issued cards: Over half (55%) of business travelers rely on company credit or debit cards, streamlining the payment process.
- Reimbursement: 31% pay out of pocket and seek reimbursement later, which may put a strain on employee finances.
- Company-invoiced platforms: 12% use platforms that directly invoice the company, meaning there’s no need for employees to make payments.
- Virtual cards: A much smaller segment (2%) uses virtual payment solutions like Airplus, which gives added flexibility and security.
Key challenges in expense management
Both business travelers and decision-makers face challenges when managing travel expenses:
Business travelers:
- Receipt tracking: This is the most common issue, with travelers frequently losing receipts or struggling to categorize them.
- Reimbursement Delays: Waiting for approval or processing often leads to frustration.
- Complexity of Reporting: Many describe current platforms as outdated, complicated, or unclear, making reporting expenses even harder.
Decision-makers:
- Compliance issues: Ensuring employees follow policies is a significant challenge, with almost 29% noting that expenses often violate company guidelines.
- Receipt management: Lost or incomplete receipts make reconciliation and auditing more complicated.
- Employee integrity concerns: Occasionally, personal purchases on company cards happen, showing how important it is for companies to have oversight.
Expense management systems are largely seen as a “must-have” for decision-makers, likely because they are used for reporting and oversight, while business travelers often see them as a "nice-to-have", showing their different priorities and needs. Integrated platforms that connect travel booking and expense reporting can help with many of these challenges, offering real-time tracking, automated processes, and policy compliance checks.
How to keep business travel costs down
Here are some strategies to keep business travel costs down:
- Plan ahead: Book transport and accommodation early for better rates.
- Use discounts: Make the most of loyalty programs and corporate deals.
- Stay smart: Opt for budget-friendly accommodation close to your meetings to cut transport costs.
- Go digital: Use travel management tools for expense tracking and consider virtual meetings to reduce trips.
- Use economical transport: Use public transport, shared rides, or carpooling.
- Set limits: Establish clear expense policies and encourage money-saving habits.
- Avoid peak travel times: Travel off-peak to save on fares.
- Review regularly: Audit your expenses and get employee feedback to keep improving.
Business travel is essential for growth and collaboration, but as the survey shows, it comes with significant costs, and managing these costs is a key priority. Adopting tools like Booking.com for Business, setting clear policies, and encouraging cost-saving can reduce costs while keeping employees happy.
By planning ahead and using corporate discounts and business travel tools, companies can better balance the benefits and the costs, ensuring that business travel supports employees and business goals. You can read more about how to improve cost-saving in business travel in our blog post here.
Methodology
Booking.com for Business surveyed 504 business travelers and 103 decision-makers in the US between 9 - 19 August 2024, with the following screening criteria:
- 18 + years old
- Employed (full-time/part-time)
- Travel for business: Have traveled in the past 12 months and expect to travel in the next 12 months
- OR decision-makers: for management of booking corporate travel within their company (at least senior level)
- Representative mix / natural fallout of: Genders, company sizes, Departments, industries, and job roles within their organization.
