HR Management, HR Policies & Procedures

Is It Time for a Business Travel Program Checkup?

It’s a fact: Your employees who travel on business can stray. They might book outside of your company’s traditional channels, like with online booking tools and travel management companies. They don’t always book with your firm’s preferred suppliers. And they may not be using the cost-efficient travel perks you hoped they would.

These types of travel behaviors are often referred to as “leakage,” and they pose a challenge to any corporate travel-management program. In fact, say planners at travel and expense management provider Concur, such leaks can lead to a real bottom-line impact by causing the following:

  • Poor tracking of planned spend to actual spend.
  • More difficulty effectively managing travel budgets.
  • Missed supplier discounts.
  • Decreased negotiating leverage for future agreements.
  • A lack of visibility into traveler location – which is critical to meet your company’s duty-of-care obligations.

The conundrum: Your employees think they’re doing the right thing, not the rogue thing.

For instance, 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, according to a recent survey of the Alexandria, Va.-based Global Business Travel Association (GBTA).

Unlocking the Outliers

There are ways to help get a tighter grip on your corporate travel policies, experts say.

Because booking behavior is a significant contributor to total travel expenditure, for example, it’s an easy opportunity for cost reduction. Shoring up policy shortfalls surrounding purchasing behavior – such as ticket changes, fare-class utilization and advanced booking times – can all make a difference in sticking to your company’s existing policies and realizing cost savings.

And while you’re measuring, uncovering and identifying cost targets across things like average airline sector price benchmarks, average hotel and car rates by destination and adherence to lodging contracts can lead organizations in the right direction, as well.

Have you looked into booking data to see what you paid at your top negotiated-rate hotel properties vs. corporate averages for that market? If a hotel has been hiking rates every year, your rates may be more expensive than market averages.

And consider this finding, from a recently completed study by the GBTA and online hotel service portal HRS: One in every six hotel contracts is incorrect due to discrepancies in rate, room type, amenity or cancellation policy. Those errors contribute to companies overpaying by 14 percent in their negotiated hotel programs, the analysis found.

Traveler Satisfaction Plays a Role

Even so, the best-managed corporate travel program won’t achieve true efficiency and success if it doesn’t meet your employees’ wants and needs.

Some lucky companies have both high traveler satisfaction and high program compliance, according to another study this summer by the GBTA Foundation, the research and education arm of GBTA. It found that 74 percent of North American-based travel managers believe that traveler well-being has a lot of weight on their final decisions on travel policies. The study, Balancing Traveler Satisfaction and Well-Being with Program Compliance, also sought an answer to the question of how traveler satisfaction can impact policy compliance. Hint: The answer is that one improves the other.

“Business traveler well-being efforts can take on a variety of forms focusing on efficiency, comfort, choice and service,” says Monica Sanchez, GBTA Foundation’s director of research. “Collecting traveler feedback can inform travel programs what areas to pay the most attention to – and this study indicates that traveler well-being and policy compliance do not have to come at the expense of the other.”

In tomorrow’s Advisor, we’ll examine some ways to balance your travelers’ satisfaction with boosting travel-management program compliance at the same time.