The Impact of Open Booking on Travel Risk Management

Part 1 of this three-part blog series, The Impact of Open Booking Challenges on Corporate Compliance, focused on financial compliance, travel and expense, and Sarbanes-Oxley (SOX).Open booking challenges, however, extend far beyond corporate accounting practices.Volatile markets and the rapid escalation of political conflict require corporate travel departments to take measured approaches to managing travel risk.A successful risk management approach, however, demands maintaining full 360° visibility into employee travel.When visibility is lost or open booking travel goes unrecorded, corporate travel risk management programs lose effectiveness and risk increases.

 

The Duty of Care

 

As an example, the globalization of commerce has made international travel a requirement for a growing number of professionals.Increased travel requirements naturally expose employees to a greater level of risk as they spend more time aboard common carriers, experience unfamiliar environments, and encounter foreign legal, health, and safety standards.This also elevates liability for corporations who may have legal Duty of Care, moral, or fiduciary responsibilities for their employees.

Corporations, more than ever before, employ travel risk management programs to reduce those risks.The most complete programs track worldwide unrest and catalog country-specific problem areas to either prepare travelers for unique challenges or halt travel altogether in the event of particular uncertainty.Problems arise when corporate travelers book outside of accepted channels thereby denying travel managers the opportunity to fully vet travel plans.As discussed in the first blog, travelers are increasingly exercising autonomous travel options to suit their scheduling needs.The rise and availability of open booking options mixed with an increase in travel demands could lead employees to unwittingly bypass corporate safeguards which increases the chances of corporate harm.Even when employees believe that they understand impending travel risks, they may not fully grasp the potential financial and legal impacts.

 

Supplier Contracts

 

In the same way that open booking tools can expose corporations to Duty of Care harms by bypassing corporate travel risk management programs, they can also create contract risk.Corporations typically employ travel management companies (TMC) to manage relationships between the corporation and common carriers or hotels.As with any supplier contract, the obligations of the organization and TMC are detailed in a document which has been carefully scrutinized by attorneys ensuring that the terms are equitable.When employees use open booking platforms they bypass TMC agreements.This may cause employees to forgo pre-negotiated rates or bind the employee or organization to untenable contract terms.One example is the acceptance of broad liability waivers that often appear on direct supplier or aggregate travel supplier websites.These waivers may work to absolve a hotel or supplier website of any liability or recourse for injured travelers.The U.S. courts have upheld these contract clauses as legal and enforceable.

Organizations seeking to round out travel risk management programs and reduce risk should ensure that employees understand the potential consequences of open booking and seek to entice employees to take advantage of company provided travel management programs and tools.

The final part of this three part series will explore the interrelationship between "sharing economies" and open booking challenges.

Loading next article