Executive Group Travel Blog

How to set flight budgets for your next incentive trip

[fa icon="clock-o"] Jan 26, 2018 11:02:00 AM [fa icon="user"] Marci McCormack [fa icon="folder-open'] Incentive Travel

There are a few different approaches when trying to set your flight budget for next years trip or even a trip 24 months away.  There will always be some risk when it comes to flight cost but there are options to help mitigate the risk.  Flight costs are constantly changing and in the last few years they have trended downwards due to competition but airlines are now fighting back by introducing basic economy fares at essentially no lower fares.  This will increase ancillary revenue to the airlines in the short term.  Plus some experts in the industry are predicting airline prices are expected to rise in the near future.  Here is a great article from Meetings & Conventions on the 2018-2019 forecast: Meetings Industry Forecast 2018.



There are three options when it comes to managing your flight budget.

First you can hedge the costs with pre-booked flight blocks either directly through the airline or through a flight consolidation company.  Flight blocks can usually be created when you have 10 or more guests flying on the same itinerary. There is usually a slight premium to do this because you are quickly filling up the airlines inventory.   Here is a past blog post on Flight Blocks: The Group Flight Block & What It Means.   A few of the airlines are more flexible than others and make sure you let them know it is corporate incentive and a not leisure group.  We have found the most financial benefits from working with Tap Portugal and JetBlue (see blog post on JetBlue Groups Team).  The process has not been easy but they have been the most flexible in the end when changes are needed. 

Your second option is to let the cost float until you know how many people qualified, who they are, and where they are from.  If you are a global companies with sales reps across the world or even multiple offices, this might be your best approach.  Especially if you don't have an exact number of qualifiers from each office.  It allows the flexibility for an unlimited amount of guests to change their itinerary but with that flexibility comes the risk that the cost can change drastically from the initial budget until time your attendees book.  With this option the attendee essentially could book their flight at whichever cost it is at the time and book their preferred flight.  

Your third option puts some pressure on the attendees but does guarantee a flight budget.  With this option you set budget banding limits for each office.  When it comes time for the attendee to book their flight they have the option to take the flight within the banding budget even if it is not the best option (which could be 1 stop) or they can take the preferred flight (usually non-stop) and potentially pay the slight premium over the banding limit out of pocket.  In some cases the preferred flight will still fall within the original set banding limits and everyone wins.  When setting your banding limit we recommend using Google Flights for similar dates (for trips 1+ years out) or exact dates (for trips under a year). Keep in mind we always recommend that you give yourself some room for price increases in that budget.

If you have a quick turnaround from qualification to trip the trip (under 2 months) or if there is only one direct flight from your headquarters to the trip location we recommend booking a partial flight block to ensure seat availability.  Otherwise in the current flight market we recommend letting the cost float but just take this risk into account in your initial budget.  

Once you have decided on your flight budgeting approach there are three booking options.  The process you choose will affect the overall flight budget.

1.  Attendees book directly through airline using either a corporate card or personal credit card then expense the flight cost.

+ This approach cuts down on questions and emails from attendees, they are essentially in charge of their own travel.  We do not recommend this approach without providing some type of budget guidelines.

  • Very hard to manage budget as attendees are usually going to book what works best for them versus another option which is slightly longer but much more affordable.  This is a challenge for all companies with Incentive Trips.  How to track close to budget but also respect these attendees accomplishments and provide them flexibility in travel.
  • You can publish the banding limits if you choose option 3 above and therefore attendees would only be reimbursed for the banding budget.
2.  Attendees book directly through a corporate travel agent such as Travel CTM, Egencia, Concur, etc

+  Most efficient approach to manage what flights are being booked, set limits for flight costs, and easily organize a flight manifest.  The best companies provide dedicated email address, phone numbers, and online booking portals that are pre-set with budget banding limits to ensure everyone follows the trip flight booking policies.  Also if there's an issue with a storm or flight cancellations, these agencies usually have a 24 hour support line to help reaccomodate attendees.

  • Great approach to manage overall flight budget but there is a cost to this of approximately $25-40 per person.

 3.  Internal contact at the company handles flight booking for all winners

+  Most cost effective approach as there is no travel agent booking fee and the internal employee can make sure they book the most fiscal flight option.

  • The negative of this is that if there is an issue with a major storm where many flights are changed then the attendees would be on their own to rebook.  Also this approach is not time efficient once you get over 60 guests attending.

 The most important thing when trying to manage flight budgets is to ensure you have a detailed process and all attendees are aware of the process and budgets set.