Why Long Stays Need a Different Company Travel Policy

Most corporate travel policies were written with a two-night hotel stay in mind. A flight out Monday morning, a flight back Wednesday evening, expenses submitted by Friday. That model works well for short trips. But it starts to fall apart the moment someone needs to be on-site for three weeks.

As project-based work becomes more common, particularly in sectors like consulting, construction and IT deployment, companies are increasingly sending staff away for extended periods.

But the policies governing those trips haven’t always kept pace. The result is overspending, unnecessary friction, and employees making accommodation choices the policy was never designed to accommodate.

Where Standard Policies Leave Gaps

The Hotel Default Problem

Most travel policies name a hotel rate cap and leave it there. For a two-night stay, that’s probably fine. For a three-week engagement in central London, booking a hotel at around £200 per night quickly becomes a serious budget problem, and that’s before you factor in meals, laundry and the general cost of living out of a suitcase.

Hotels are designed for transient stays. They don’t scale well for extended assignments. Staff who spend several weeks in a standard hotel room tend to eat every meal out, run up minibar bills, and find it harder to maintain any kind of routine. The costs compound in ways that a nightly rate cap doesn’t capture.

VAT and the 28-Day Rule

There’s a specific financial lever that many travel policies completely ignore: the VAT reduction on serviced accommodation. When a stay in serviced accommodation or a hotel exceeds 28 consecutive nights, the VAT treatment changes under HMRC’s reduced value rule. From the 29th night, VAT is charged only on the non-accommodation element of the bill, which must be at least 20% of the total charge.

The effective result is a VAT cost of around 4% of the total price, down from the standard 20%. In practice, serviced apartment providers are far more likely to reflect this saving in their pricing and pass it directly to corporate bookers. Hotels often absorb the benefit internally or do not adjust rates for long-stay guests, meaning the saving is more readily captured through serviced apartment bookings. For a month-long assignment in a major city, that difference alone can be substantial.

Companies that default to hotels on extended bookings are often missing out on this saving. That’s why it’s worth building the 28-day threshold directly into policy language so that bookers are prompted to consider alternative accommodation types when a trip crosses that line.

What a Long-Stay Policy Should Include

A travel policy built for extended assignments needs to address a few things that standard policies typically don’t:

• Accommodation type by duration: Define which accommodation types are approved for stays of different lengths. Hotels may be the default for one to three nights, serviced apartments or aparthotels should be the default from seven nights onwards.
• Self-catering provisions: Employees staying in serviced accommodation with kitchen facilities will incur lower meal costs. Policy should reflect this with adjusted meal allowances instead of applying default hotel-era per diem rates to self-catering situations.
• Workspace requirements: Longer stays often involve remote working from the accommodation itself. Policy should specify minimum workspace standards, including desk space and reliable broadband, as standard requirements rather than optional extras.
• Booking lead time: Extended stays in major cities like London require more planning than a last-minute hotel booking. Policy should set a minimum lead time for long-stay assignments to avoid premium pricing.

How Serviced Apartments Change the Cost Calculation

For companies managing extended assignments in major UK cities like the capital, business accommodation in London through a serviced apartment model can cut per-night costs significantly compared to hotels on equivalent booking lengths. Some providers offer properties across central London with full kitchen facilities, separate living areas and access to amenities like gyms and concierge services; but at rates that reflect the longer commitment.

The savings come from several directions at once. Cooking in reduces meal costs. The VAT benefit kicks in after 28 days. And the space itself means employees are more comfortable, more rested and better able to maintain productivity over a long assignment.

How to Start Updating Your Policy

You don’t need to overhaul your entire travel policy to fix this. The changes that make the biggest difference are relatively targeted.

Start by adding duration thresholds that trigger different accommodation guidance. If a trip is seven nights or more, the policy should require a comparison between hotel and serviced apartment options before booking is confirmed. Build the 28-day VAT point in as a flag. Adjust meal allowances to reflect the self-catering context.

It’s also worth reviewing how your policy handles booking platforms and approved suppliers. Many travel management tools still default to hotel inventory even when serviced apartments would be cheaper and more appropriate. Making sure your approved supplier list includes extended-stay options is a practical step that removes the friction from making the right call.

Closing Thoughts

Travel policies exist to control costs and set expectations, but they only do that effectively if they reflect how business travel actually works. For most companies right now, that means acknowledging that extended assignments are no longer the exception.

A policy that treats every trip the same way will keep producing the same results: overspending on hotels, frustrated employees, and budget conversations that nobody enjoys. A few targeted updates, focused on duration thresholds, accommodation type and the VAT rules around longer stays, can make a meaningful difference without requiring a wholesale rewrite.