Estimating and Billing Clients for Travel and Travel related costs

[SeatBackForward]

This question might be more relevant to those who are in roles where you are engaged by outside parties, or perhaps run your own businesses (my case) - How do you estimate the cost for for travel and travel related costs when the client will be footing the bill?

For example, if I'm asked to prepare a proposal for running training in the US when the dates are not yet fixed but lets say they want this to be in April 2023. How would you estimate this cost, in addition to standard rates and fees.

My steps would be - jump onto Google Flights, select a period in the middle of the month, flying an airline and route of my choice, and then round this up to the nearest thousands of dollars. Depending on the client I may quote business class, or I might use economy then add in additional "travel time" cost. then add n+1 nights accommodation, where n=the days of work expected, plus add in an amount for transfers, meals as well.

I find that travel costs can end up being quite a significant portion of any total proposal, and am wondering if I'm doing something wrong.

 

[Happy Dude]

You could provide a quote exclusive of travel related costs and let them know that it'll be charged at cost (or + markup) in the final bill.

In my consulting role, I generally quote fully flex fares and take a stab at hotels, cars based on a quick web search for the time I'll be travelling. Airfares are way more dynamic. Pretty much what you do now.

I tend to travel to regional areas in AUS and I could only get away with J or even full whY if there was no other option.

It's common for prospective clients to arc up at paying travel costs, especially time, even though there's no-one local.

 

[SeatBackForward]

You could provide a quote exclusive of travel related costs and let them know that it'll be charged at cost (or + markup) in the final bill.

That's what I do when clients are happy to pay, so I usually add a 5% admin fee. Sometimes client are happy to organise all the travel themselves. It gets trickier when they ask for a single lump sum estimate. In my example of training above, if i get push back I usually say, work it out per trainee and it usually is not too unreasonable.

In my consulting role, I generally quote fully flex fares and take a stab at hotels, cars based on a quick web search for the time I'll be travelling. Airfares are way more dynamic. Pretty much what you do now.

Yup usually cheap economy outbound and flexible on return is my preference for domestic hops. Pricing has changed so much though, I would've estimate about $200/night for hotels, but recently this has been much closer to $350 a night at the usual places I prefer. Maybe time to adjust preferences !

I tend to travel to regional areas in AUS and I could only get away with J or even full whY if there was no other option.

It's common for prospective clients to arc up at paying travel costs, especially time, even though there's no-one local.

Yeah this is the part that confuses me sometimes, you want me to complete this work, but don't want travel to be part of the cost...even when you break down the costs into service and travel costs, I've had some clients ask if I can reduce the travel costs instead of any service costs..bizarre.

 

[RooFlyer]

When I was consulting, it was mainly long haul international travel, and I simply costed my daily rate for either one or 1.5 standard days to get the destination, depending on how long it actually took. For fares, I got my Travel Agent to provide a quote for Business Class fares ( that was a condition in my standard Letter of Engagement ). Accommodation options similarly quoted by the TA.

My standard letter also stated that if I could get a similar standard of travel and accommodation on the actual trip at lower cost, I would take that and charge the lesser amount.

I paid for the travel and accommodation myself and got a reimbursement from the client, but I never claimed an admin fee etc to make the standard of travel more palatable to the client.

 

[SYD]

Yeah this is the part that confuses me sometimes, you want me to complete this work, but don't want travel to be part of the cost...even when you break down the costs into service and travel costs, I've had some clients ask if I can reduce the travel costs instead of any service costs..bizarre.

You could ammortise some of those overheads (eg travel time) into your rate if they don't want to pay for you enjoying your pretzels sitting in an upright position. Alternatively, get them to pay Biz and absorb the travel time!

 

[SeatBackForward]

You could ammortise some of those overheads (eg travel time) into your rate if they don't want to pay for you enjoying your pretzels sitting in an upright position. Alternatively, get them to pay Biz and absorb the travel time!

That's my thinking too, J seat = time to get some work done, or sleep and not need recovery. Y seat = Entertetainingment only.

 

[SeatBackForward]

When I was consulting, it was mainly long haul international travel, and I simply costed my daily rate for either one or 1.5 standard days to get the destination, depending on how long it actually took. For fares, I got my Travel Agent to provide a quote for Business Class fares ( that was a condition in my standard Letter of Engagement ). Accommodation options similarly quoted by the TA.

My standard letter also stated that if I could get a similar standard of travel and accommodation on the actual trip at lower cost, I would take that and charge the lesser amount.

I paid for the travel and accommodation myself and got a reimbursement from the client, but I never claimed an admin fee etc to make the standard of travel more palatable to the client.

I'm happy not to charge travel time if I get to fly in business, as I can usually get some work done with the luxury of space and power. I like that bit about the actual lower cost. I'll pinch that!

Yeh the admin fee can be negotiable

 

[BAM1748]

From my previous life consulting, there is a modest cost for travel time, then time at what ever hourly rate and expenses plus 15%.

So you can give an estimate quote as you know how much time is invested and let the customer know plus the expenses and handling mark up.

 

[SeatBackForward]

From my previous life consulting, there is a modest cost for travel time, then time at what ever hourly rate and expenses plus 15%.

So you can give an estimate quote as you know how much time is invested and let the customer know plus the expenses and handling mark up.

is that 15% just like a premium for being away?

 

[Pele]

As someone sitting on the other side of the desk I will add my two bobs worth in: I am fine paying travel costs and I appreciate post corona they are sometimes silly, but if you add an admin fee or markup on top of them then thats not gunna fly, and neither are you!

 

[SeatBackForward]

As someone sitting on the other side of the desk I will add my two bobs worth in: I am fine paying travel costs and I appreciate post corona they are sometimes silly, but if you add an admin fee or markup on top of them then thats not gunna fly, and neither are you!

But if you want a "value" price that compares sources, dates, locations etc that requires time. I'm happy to spend the minimum time and pick something, but it probably will be not the best "value" available. OR alternatively, can you book it for me?

 

[BAM1748]

All our billing’s to customers incur a 15% fee on expenses only. Labour is the hourly rate as agreed or fixed price. To cover your labour and overheads such as insurance, taxes, laptop etc you need to charge 3 to 5 times what you pay yourself in cash. So if you pay yourself $50 per hour you need to charge between $150 to $300.

So a $100 dinner is charged to the customer as $115. You incur the cost which may take 30 to 60 days to recover plus you need to manage the $100 dollar invoice which may have been incurred 2 months before that through from expense to charging the customer. Handling fee.

I don’t know a business in the consulting/professional game that doesn’t do it. If it’s a large expense like I might have such as $100k for crane hire as a example we might knock that back to 5% if they are good and pay their bills on time.

You could ask the customer to pay your airfare, give them the details of exactly what you want, and tell them it will save a handling fee.

If they want you to travel half way around the world they would have deep enough pockets and likely won’t question it if you set it out up front in your terms and conditions.

 

[SeatBackForward]

If they want you to travel half way around the world they would have deep enough pockets and likely won’t question it if you set it out up front in your terms and conditions.

Thats my thinking too! And I'm open about it when discussions first start - that someone local might work out much cheaper.

 

[Sprucegoose]

If they want you to travel half way around the world they would have deep enough pockets and likely won’t question it if you set it out up front in your terms and conditions.

Focus on the value you provide, your costs are your costs, and importantly don't undersell yourself Manage expectations up front, costs, value and deliverables.

 

[SeatBackForward]

So here's an early method I used to use, I've updated it a little to reflect current pricing (or at least what I think is current). The table on the right are potential destinations and the airfare prices in Y, Y+ and J. I would just use somewhere similar for estimating. Then what I've termed as "Loading" that is, the additional days/time I would add for travel in that class to cover travel, disruption, recovery time etc. plus for the further away destinations any additional nights of accommodation.

The section on the left is where the numbers are calculated and it's all pretty much driven by the destination, the travel class and the destination duration. So in the example below, a trip to India, in Business class for 4days of consulting. I've put in a nominal service and Travel rate. 4 days of consulting rate + 2 days at a lower travel rate. As the table shows, I assume transfer costs, the nights of accommodation and meals, a 10% admin and then the additional.

Am I missing something? or over estimating? The fare tables are probably well out too post-pandemic.

Post automatically merged: Dec 15, 2022

Focus on the value you provide, your costs are your costs, and importantly don't undersell yourself Manage expectations up front, costs, value and deliverables.

Most of my consulting gigs these days are from clients who say "we don't have the capabilities or time to learn how to do it ourselves, and we know you'll hit the ground running"..which seems to suggest that they shouldn't really be bargaining if I'm being reasonable with my pricing.

 

[Seat0B]

I NEVER want the client to book my travel. My clients are mainly govt and their bookings don’t include FF points and often don’t let me choose the airline I want to use. Also if something changes while I’m away, it’s harder to make changes. And sometimes they totally stuff up - like the time they booked me on a 1245 (1245 pm) flight home from Darwin but told me in writing it was the 0045 (1245 am) I had requested meaning that I was at the airport in the middle of the night, no flight, had already checked out of hotel, nowhere to wait as QP was closed and they wouldn’t check me in that early and plus I had a personal reason for taking the red eye (which I also virtually never do) as I had a commitment at a young Seat kid’s school!
So nope don’t let the client book it

 

[RooFlyer]

I NEVER want the client to book my travel.

Following on from my account above - where I got a quote of J travel from my TA to give to the client .... the client then booked the travel. Business class was no worry - 8 or so return trips a year to Canada from HBA, and many trips up to QLD and WA; some years I was 3 weeks on in Canada, one week at home, rinse, repeat for 6 months and also travel within Nth America. There was a lot of flying - not as much as some or many here, but quite a bit.

Soon the client just told me to contact their TA direct and tell then what flights I wanted to take - cost wasn't a big factor, as they all flew Qantas, usually the most expensive choice, and I could do the same. Flights were subject to approval by the client of course, but they always approved, as I always kept it reasonable.

Then I joined AFF and my eyes were opened to many other choices . So I started requesting those, such as Circle Pacific, with a stopover in HKG on the way home, which was cheaper than direct to Calgary and back via LAX. The Aussie-based MD found out, and he liked it and started doing it himself!!

I wanted to diversify my FF programs once I reached Plat (then, the highest tier), so I started flying Air Canada and reached their top tier, too; told the MD and he liked that too!! He could use his eUpgrades to take the family around Canada in business on their skiing holidays.

Their TA also became my TA (and still is).

Moral of the story - share AFF lurks with the client and they will hopefully look kindly on your travel requests.

 

[Sprucegoose]

Soon the client just told me to contact their TA direct and tell then what flights I wanted to take - cost wasn't a big factor, as they all flew Qantas, usually the most expensive choice,

RF clearly, you were a trusty!

When I was doing African mining, our corp TA found cheaper one-way QF F flights than equivalent J - I became their client!

 

[Sprucegoose]

If you are dealing with a large company, they may have their own staff travel rules - for example flights <3hrs in Y, 3-6 hrs in PE, and anything >6 hrs in J. If your desires are out of whack with their policies, you start with an uphill battle

There are some tricks. If you are restricted on travel class etc., check EF and request flights that only have J/W/Y fares.

I know someone that was once booked (vindictively) on an LC carrier. A mere coincidence they missed that flight and had to take the next QF flight?

 

[SYD]

I do some contracting for one of the big accounting firms and albeit for domestic flights I have direct access to their booking tools and so flights are booked at very competitive rates and paid by the firm directly. I just invoice hotels, meals etc at cost as per my contract. No one bats an eyelid for including a couple of hours travel time but I can imagine it could be (but really shouldn’t be) an issue for long haul.