. How to Avoid Travel Cost Increases | Meetings & Conventions

How to Avoid Travel Cost Increases

Why prices are rising -- and what you can do about it

Cool Apps
Following are some helpful apps for road warriors.

Taxi Magic makes getting a cab or limo faster and cheaper.

FlightTrack tells you when the plane actually leaves and arrives.

SeatGuru compiles information on airline seating to show the best seats other than premium.

Priority Pass shows you what lounges you can access and where they are in your terminal.

TripIt is a helpful and multi-layered trip-management application.

As we climb out of a long recession, travel prices are increasing across the board, including base costs, ancillary expenses, taxes and fees. What are you going to do about it? Let's take a closer look at these costs and how smart management can keep travel -- the average firm's second-largest controllable expense -- under control.

Base Costs The base costs of a plane ticket will rise because, with load factors averaging 90 percent or more, demand is very high for a scant number of available seats. Fewer seats have come as a result of mergers (like Southwest and AirTran), possible mergers (American has some suitors) and service reductions to some cities. Airfares are projected to rise an average of 4 percent domestically and 7 percent internationally this year.

Meanwhile, hotel development has slowed and now demand is rising steadily, with rates climbing accordingly. Car rental companies also are managing demand very well, with rates inching upward.

Ancillary Expenses Travel expenses in the air and on the ground also will rise, as travelers have a growing number of opportunities to purchase perks like inflight Wi-Fi. And, we might soon see baggage charges for carry-ons or gate-checked bags, as airlines grapple with overloaded luggage bins. (Even Southwest might consider charging for bags.)

Onboard food and retail options will expand, too. The difference between the haves and have-nots aboard a plane will widen, so consider these costs and your duty of care to your road warriors. Will you deny such charges? Which ones are permissible and under what circumstances? Will you try to negotiate for reduced fees?

From the hotel side, expect more resort fees, gym fees, etc., and fewer amenities for free. Again, what can be reimbursed?

On the car rental side, watch for no-show fees and a myriad of additional charges that now represent 60 percent of the daily rental cost. Your credit card and company insurance policy might cover some of the items your travelers are paying extra for; it's a good time to check.

Taxes, Fuel Surcharges Airport authorities and governments are starved for funds, so watch these taxes and surcharges rise. Also be careful of fuel surcharges. Not only are they rising, but they have gone unmonitored. They rise and never seem to fall, even as fuel prices dip at various times of the year.

What You Can Do How can you counter these effects and keep travel costs in check? Some suggestions:

• Leverage spend. Group and meeting travel combined with all of your corporate travel spend should be properly leveraged through one consolidated source for the most effective supplier agreement negotiations. Only with consolidated data and control will you secure the best values.

• Revisit your travel policy. The policy should define how to avoid some of these charges, what can be reimbursed, what suppliers should be used and why. A well-crafted and clearly communicated policy, implemented with a strong travel partner, can save your organization 20 percent or more. Assign someone the task -- and be sure to report your savings.