The Most Expensive Cities for Business Travel

We’ve all heard that to get ahead in life, it’s not what you know, but who you know that matters. To save on business travel, nothing counts so much as where you go. That’s the take-away from Business Travel News’ 2015 Corporate Travel Index, an annual study showing the daily cost of corporate travel in 200 cities around the world.

Travel costs varied dramatically across the 100 U.S. cities included in the index. In San Francisco, the most expensive city on the list, average daily travel expenses came to $509, compared to only $241 in Shreveport, the least expensive city.

Business Travel Costs in the U.S.

There were few surprises in the list of most expensive US cities. This was the second year in a row that San Francisco topped the list, with New York and Boston once again coming in second and third.

Per Diem Travel Costs, Most Expensive US Cities

At the other end of the list, Shreveport can credibly lay claim to the title of America’s Affordable Business Travel Capital, having had the lowest per diem costs for three years running.

Per Diem Travel Costs, Least Expensive U.S. Cities

International Business Travel Costs

Based on this study, Caracas takes home the dubious honor of being the most expensive city in the world for corporate travel: per diem costs in the Venezualan capital ran to $1,325, in large part due to currency instability. London and Hong Kong, the second and third most expensive cities on the international list, were a compartive bargain with per diem costs of $576 and $529, respectively.

All costs were calculated in local currencies, then converted based on dollar exchange rates.

Per Diem Travel Costs, Most Expensive International Cities

At only $193, per diem costs in Johannesburg were the lowest in the Index, followed by Bangalore ($193) and Mumbai ($213).

Per Diem Travel Costs, Least Expensive International Cities

Hotel Costs

Difference in hotel rates accounts for the vast majority of variation in per diem travel cost between cities. Daily corporate hotel expenses increased 3.5 percent year over year across the 100 U.S. markets represented in the Index, with some high-demand markets showing double-digit increases. The cause? Demand has risen with a recovery in economic activity, but the supply of new hotels has remained relaively flat, especially among full-service hotels.

In a January 2015 report, PricewaterhouseCoopers noted that occupancy in 2015 should reach levels not seen since 1984, while supply is expected to increase only 1.5 percent year over year, below the long-term average of 1.9 percent.

Calculating Corporate Travel Costs

No overview of travel costs is perfect, and the findings in BTN’s 2015 Index have to be understood in context. Airfare was not included in the study, and hotel and rental car costs came from prices paid by clients of one corporate travel management company. The food component of per diem expenses reflect the cost of three meals, based on prices gathered by student researchers at New York University.

The index provides an interesting look at the relative cost of traveling for business to cities around the world, not a definitive guide to how much a given company should expect to spend.

In fact, the wide range of per diem costs suggest that travel policies should adapt to each specific trip. When expenses vary so dramtically from one destination to the next, a single across-the-board spending limit is bound to mark.

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