In spite of the Herculean efforts of travel managers to develop the best travel program possible for their company, employees can stray away. They sometimes book outside of their company’s traditional channels like online booking tools and travel management companies (OBTs and TMCs). Travelers also don’t always book with preferred suppliers. These activities cause breakdowns and gaps in the complete data that travel managers need for their CFOs. Those outside bookings are referred to as “leakage,” and they represent an ever-increasing challenge for today’s managed travel programs.
How can leakage impact a business?
Leakage can have a big impact not just on the success of a corporate travel program but on the bottom line of a company’s financials:
- Poor tracking of planned spend to actual spend
- More difficulty effectively managing travel budgets
- Missed supplier discounts
- An inability to optimize supplier agreements
- Decreased negotiating leverage for future agreements
- A lack of visibility into traveler location – a critical requirement to meet Duty of Care obligations
Does the size of a business protect against leakage?
First, let’s acknowledge that many very-small, small, and medium-sized businesses don’t always have a formal managed travel program: employees book their travel in the way that’s most convenient and efficient for them. To them, not using an OBT or TMC isn’t “leakage,” it’s just “booking travel.” In that context, we might say 100% of their travel spend is exposed to the challenges listed above.
What about in the large-market and enterprise space, where most companies have implemented a managed travel program? Well, according to two recent studies, around half of all business travel bookings happen outside of the traditional channels:
- 40% of managed travelers don’t always comply with their company’s booking channel policy, according to the PhoCusWright’s U.S. Business Traveler: Managed, Unmanaged, and Rogue 2012 report
- Over 50% of travelers book outside of their companies’ recommended hotel booking channels, despite a carefully managed travel program, according to internal research conducted by Carlson Wagonlit Travel
“Rogue” Behavior or “Doing the Right Thing”?
Having been in the travel industry a long time, I’ve seen travel managers shake their fists in the air and curse “rogue” travelers. “Those ‘cowboys’ will do whatever they have to do to get their frequent traveler awards,” is a refrain often heard in these lamentations.
But there might be another way of looking at this behavior: employees are trying to do the right thing by their company. Sure, there might be a small percentage of travelers who are looking for the most personal rewards they can get. But a just-published study from the Global Business Travel Association (GBTA) suggests that the vast majority want to do right by their company. “Nearly all business travelers (98 percent) believe they are getting a better deal for their company at least some of the time when booking outside of their corporate booking channel.”
How to help employees do the right thing
Instead of lumping all these “good-guys” in with the handful of “cowboys” – and coming up with new punitive threats – travel managers would be better served leveraging new technologies to capture complete data.
Travel managers far and wide need to make sure they’re capturing the most complete data possible. It’s no easy task, we understand. But by having the best tools, policies and technologies in place, the benefits of managed travel and integrated travel and expense are realized, no matter where the booking takes place.
Learn more about how Open Booking can help your employees do the right thing as well as provide your company with the complete data it needs.
Photo credit: Josef Grunig