Following on our previous post on managing without travel, this post looks at the real cost of business travel.
I should say first that I think some face to face contact is essential, particularly when meeting with customers and building relationships, those kind of things are hard to do remotely – though sometimes we have to when budgets are cut.
I do think however that there is tremendous waste in internal meetings and I have talked about this in my Life in a Matrix podcasts. If you listened to the podcast “Too much cooperation going on”, you will remember, according to our research, 40% of management time is spent in meetings and people tell us that half of this is completely unnecessary.
We tend to deal with remote and virtual teams that are located in different places, different countries even continents, and I attended a two day meeting in London recently with 11 attendees from the UK, USA, Singapore, Italy and Australia, I calculated the cost of that two day meeting as
- 33 days of time, and that was including 11 days of completely unproductive travel,
- the expenses cost of hotel and travel was $60,000
- it produced 19 tonnes of carbon emissions.
With these kind of costs, we better make sure we have a great meeting! … and often we don’t.
If you work in a large company, go and ask your finance people what the cost of travel is, when you add together the flights, the mileage allowances, the taxis, the hotels, etc… it is a staggering cost in most large organizations.
A study of 89 corporate travel managers for American Express by Accenture in 2004 found an average air travel spend of just under $30M each. This represents an average of 65,000 business trips per year for each of these companies. It takes no account of taxis, hotels, time and other travel expenses
I know of one German organization who told us that each year from their head office they had a quarter of a million business class air trips from that head office location, so that gives you an idea of the scale.
Now if up to half of this is unnecessary or could be replaced by use of technology or delegation (look out for future posts on alternatives to travel) this is a significant potential saving, useful in the current business environment.
What is the most expensive, unnecessary business trip you ever had to make?