How much is business travel really costing your manufacturing business?
It is Monday morning and one of your engineers needs to be in Germany on Wednesday.
A customer has a problem with a production line. They need somebody on site. The engineer finds a flight, books a hotel and sorts out a hire car. The fare is higher than it might have been with more notice, but there isn't more notice. The customer needs help now. £684. That's the cost of the trip. Or is it?
The month gets busier
A few days later, two members of the sales team travel to an exhibition.
One books directly with the airline because that's what she normally does. Her colleague finds a slightly cheaper fare through an online booking site. They book their hotels separately. Meanwhile, a project manager needs to visit a supplier in Italy. His PA arranges that trip.
The following week, another engineer travels to Scotland for an installation, a director goes to the Netherlands to meet an important customer and three employees travel by rail to a meeting in Birmingham. Nothing unusual is happening. People need to travel because the business needs them to be somewhere. Flights are booked. Hotels are reserved. Trains are caught. Customers are visited and work gets done.
At the end of the month, finance can see what has been spent. So everything is under control. Probably.
Then the little things start to happen
The engineer's meeting in Germany finishes a day earlier than expected. He wants to come home. Because he booked the original flight himself, he spends half an hour working out whether it can be changed. Then he calls the airline. He waits. Eventually, he changes the ticket and pays the difference.
The project manager's flight to Italy is cancelled. His PA spends much of the afternoon trying to find an alternative while also doing the job she was supposed to be doing that afternoon.
One of the exhibition travellers becomes ill and cannot go. Her flight is non-refundable. The hotel can be cancelled, but nobody remembers until two days later. By then, the cancellation deadline has passed. £186. Not disastrous. Just wasted.
Nobody sees a problem
And, individually, there probably isn't one. A £186 unused hotel room will not transform the company's annual results. Neither will half an hour of an engineer's time. Nor will the hour a PA spends sorting out a cancelled flight. Nor the rail ticket bought twice because the original booking confirmation could not be found. Nor the £75 credit sitting with an airline that nobody remembers exists. Each is small enough to ignore. That is precisely why they are so easy to miss.
But now imagine the same pattern repeated across a year, involving dozens of employees, hundreds of journeys and several different ways of booking them. The question changes. It is no longer: How much did we spend on flights, hotels and trains? It becomes: How much is the way we manage business travel actually costing us?
The finance director asks for a number
Six months later, business travel expenditure has risen. There may be a perfectly good reason. The company is growing, engineers are busier and the sales team is developing overseas markets. But the finance director wants to understand what is happening.
“How much are we spending on travel?” That question is relatively easy.
The harder questions follow.
How much was planned travel and how much was booked at short notice?
How much did cancellations and changes cost?
How many tickets were booked but never used?
Did we receive all the refunds we were entitled to?
Are there airline credits still available?
How much are individual employees spending on the same routes?
Which customers and projects are generating the expenditure?
How much time are our people spending arranging all of this?
The room becomes a little quieter. Because the information exists. Some of it is in the finance system. Some is in expense claims. Some sits with airlines, hotel websites and online booking platforms. Some is in people's email inboxes. And some of it has never been recorded at all. Nobody records “47 minutes spent sorting out a cancelled flight” as a travel expense. But somebody paid for those 47 minutes.
This is where the real cost starts to appear
The visible cost of business travel is easy to recognise.
It is the £684 flight and hotel. The £126 train ticket. The £1,100 spent sending two engineers to an installation. Those numbers appear on invoices and credit card statements. The less visible costs are different. They include the time employees spend searching for travel, comparing options, making bookings, changing reservations and dealing with problems.
There are unused tickets and missed refunds. There are bookings made later than they needed to be because there is no consistent process. There is time spent by finance reconciling expenditure from different sources. There are managers trying to establish which costs belong to which project. And then there is disruption. A cancelled flight might cost £300 to replace. But if the person on that flight is an engineer who is supposed to commission a machine at a customer's factory the following morning, the £300 may be the least interesting number. The bigger cost could be the delay.
Cheap travel can be expensive
This is where focusing purely on the price of a booking can become misleading.
The cheapest flight might involve a connection. The direct flight costs £90 more. On a spreadsheet, the saving is obvious. But what if the connection adds three hours to an engineer's working day? What if it creates another opportunity for disruption? What if a missed connection means the engineer reaches the customer a day late? Suddenly, the £90 saving needs a little more context.
That does not mean businesses should routinely buy more expensive travel. Cost control matters. It means the cost of the journey and the value of the employee's time are both real. Well-managed travel needs to recognise both.
So what does business travel really cost?
Back at our fictional manufacturer, the answer turns out to be more complicated than anyone expected. The company knows exactly what it paid for flights, hotels, rail and ground transport. What it does not know is how much employee time went into arranging those journeys. It cannot easily identify all the unused tickets and credits. It cannot see immediately whether people travelling to the same places are paying similar fares. It struggles to allocate some travel expenditure to individual projects and customers. And when journeys go wrong, highly skilled employees and their colleagues often end up becoming temporary travel agents.
None of this means the company has been badly managed. It means its approach to business travel has evolved gradually. One employee started booking directly because it was convenient. A PA took responsibility for another team. Somebody found a useful website. Finance developed a process for reconciling the resulting expenditure. Each decision made sense at the time. Together, they created something nobody deliberately designed.
The answer is visibility
The solution is not necessarily to tell people to travel less. Nor is it to introduce layers of approvals that make an engineer wait for permission when a customer needs help urgently.
It is to understand what is happening. How much are you spending? Where is that money going? Why are people travelling? How far in advance are they booking? What happens to unused tickets and refunds? How much administration does the process create? What happens when somebody's plans change at 10pm? And can the business get reliable answers without somebody spending two days assembling a spreadsheet?
Once those questions can be answered, something useful happens. Business travel stops being a collection of flights, hotel rooms and train tickets. It becomes manageable information.
Go back to that £684 trip
The engineer got to Germany. The customer's production problem was resolved and the relationship was protected. In that context, £684 may have been excellent value. And that is an important part of the story. The objective of managing business travel should not simply be to make every journey cheaper. It should be to understand the cost, remove unnecessary expenditure and administration, support the traveller and make sure the journey delivers what the business needs it to deliver.
Because the number on the airline receipt is only one part of the cost.
How much is business travel really costing your manufacturing business?
If you can answer that question confidently – including the costs that do not appear neatly on a travel invoice – you probably have good visibility of your travel programme. If you cannot, it may be worth finding out.
Want to put a figure on some of those less visible costs? Our Business Travel Savings Estimator lets you enter your staff's hourly rate and the number of trips your organisation books each month to estimate what managing business travel in-house could be costing you – and how much you could potentially save.