Companies Strategizing to Reduce Travel Expenses with Employee Incentives

by: Nichole Gunn November 11, 2010

Travel is a big ticket and companies are looking for ways to keep the expenses down by offering employee incentives to those workers who ‘play ball’ by adhering to the company’s travel policies.

Travel experts discuss the pros and cons of varying travel incentive programs with the New York Times.

According to travel consulting expert Will Tate, some companies are utilizing a points-based program. “If you book according to the air travel policy, you get 10 points. If you book a hotel within the policy, you get 10 points. A rental car – you get 10 points. If you do all three, you get a bonus of 20 points.” Rewards, from products to expensive vacations, are based on the number of points accumulated.

There are a number of other travel incentive variations to draw on. Senior manager of global procurement for Stream Global Services noted that his company took into account the tax consequences of incentive rewards. The company donates “half of the difference” in airfare “to a charity of their choice. The traveler gets the tax credit for the donation,” but incurs no income tax. Stream also does not face taxes on the incentive payments.”

As the cost of air travels soars, the challenge of reducing travel expenses is front and center for big businesses. According to the Charlotte Observer, industry analyst Michael Boyd predicted that the cost of airfares would rise between 4 and 8 percent in the U.S. during the summer.