Turning your business expenses into reward travel - with Steve Hui

Steve Hui
Travel News 29 Aug 2017

Australians spend more than $21 billion annually on business travel, with more than one in ten taking at least one flight annually for domestic business travel alone. It's clear that travel today is becoming a competitive advantage as growing Australian companies are seeking to expand across the global marketplace.

While technology allows instant communications globally, I’ve found there’s still nothing more important than to feel the warmth of a real handshake when it comes to building trust, and this is still so important in deciding who to work with. Cathay Pacific coined it perfectly; a ‘Life Well Travelled’ encourages new ideas, growth, and opportunities that add to the bottom line.

For most companies, the annual travel budget is a significant expense where many CFOs have a difficult balancing act of employee needs vs budgeted costs.

The POINT of flying

Flying business or first class comes at a high price tag, just a few trips per year can easily cost tens-of-thousands of dollars per person. Fortunately, there is a way to reduce this cost by leveraging the value of reward points to ‘pay’ for travel.

At a personal level, we know we collect frequent flyer points when flying, and most have a credit card that also generates points when spending. Typically, once we have accumulated enough points, most of us would use them to request an upgrade, or find and book an award seat, satisfied that we have finally been able to utilise our points to save some money.

Now, if we applied this technique to a company with larger expenses, we now have the potential to collect millions of points each year, and use the points to cut the cost of business travel: The key is to have a strategy behind earning and redeeming your points.

Think about how you can use points to book flights, upgrade seats, or treat your team to business class for greater productivity and engagement.

The whole reward points landscape is complex, and made up of different airline alliances and partnerships, where one airline’s points can be used to fly on some airlines but not others, and where credit card reward programs can only transfer points to some airlines and not others. This is the problem I saw and why I created iFLYflat, which helps businesses get the right strategy to earn more points, so they can partner with their travel agents to enhance their ability to fly more than they could previously afford to.

As a business owner myself, flying business class is what allows me to enjoy travel. The privacy and space gives freedom to move about, get work done and feel rested on arrival. You save significant time and frustration with priority check in, through security, and are able to relax thanks to lounge access. All are elements that help to keep the mind focused on the key tasks that are important to my business. Flying business class is both rewarding and addictive, once you realise that you can fly more often at low costs.


Identifying your expense opportunities

At iFLYflat, we are regularly asked how businesses can earn more points. The secret is that you can turn almost all of your outgoings into points and reward travel. A business can earn between 1.5 and 2 points per dollar spent on everyday purchases or when paying your suppliers; even taxes and superannuation (except direct wages) can earn rewards.

Even after working out the card fees when paying suppliers on card, the maths is attractive. For example, a business class flight from Sydney to Los Angeles return may cost between $5,000 to $7,000 depending on the season. But when flying with points, there is a fixed points price set by the airline which doesn't change regularly – the key part is finding an available seat. That same flight using points would cost 192,000 Qantas or 191,000 Virgin Velocity points.

Let’s compare this with the cost of the card fees to collect 191,000 points to fly Virgin Australia. Using a typical example of every $1 on cards earns 1 point, and an average surcharge of 1.5 per cent, then every $191,000 paid on cards will earn 191,000 points at a card fee of $2,865 (191,000 x 1.5%). Compare this with the ticket price of $5,000 to $7,000 and you can see the value of using points to enhance your travel budget. 

The key is recognising opportunities to collect the most points for the lowest cost, and to collect the right points to match your company’s travel needs. If you don’t earn the right kind of points, you limit your travel options later. Using points is becoming increasingly more valuable as the costs of travel fluctuate. Having an accumulation of points in your wallet can be a strategic move, allowing you to still book expensive flights even when cash flow is challenged.

If you haven't thought about the value of points before, perhaps now is the right time to start the conversation and consider the opportunity.

Use your points smarter.


Steve Hui is the Founder and CEO of iFLYflat - The Points Whisperer. Learn more about him at iFLYflat.com.au.