Will leakage from travel policies be impacted by COVID-19?

By |2020-10-08T22:36:00+00:00June 19th, 2020|Business Travel, Research and Statistics|

Originally published by the FCM Travel Solutions.

Travel program leakage is the bane of any travel program manager the world over. Before COVID-19 hit, businesses were seeing dollars and productivity hours march out the door as employees chose to book outside of the travel policy and expense claim back at a later date. The pandemic has also highlighted the potential duty of care gaps that out of policy bookings can cause. Having a clear picture of where your employees are, what potential risks they may face, and being able to easily coordinate their safe return proved challenging in cases where travel bookings were not centralized.

Now that COVID-19 has all together paused business travel, we find ourselves in a unique position where we are able to hit the reset button on booking behavior.

What is travel management leakage?

Despite a travel management company’s (TMCs) daily efforts to create the best possible travel program for your business some bookings still go astray; sometimes travelers won’t book through your preferred channel or they’ll book their own choice of hotel direct with the supplier or online. When this happens, gaps start to appear in your data and your reporting abilities.

While many corporates with managed travel programs have mandated policies in place, leakage through your preferred booking channels or suppliers can cost your company significantly long term.

Why do people book outside the travel program?

At face value, airline or hotel websites can be appealing to a traveler with simple travel needs. There are the perceived benefits of convenience and simplicity, and of course, the perception of ‘lowest rates’. Travelers may think they are doing the right thing for their company by booking themselves something direct if they spot a cheap deal. But by booking outside of policy, the overall cost consequence for a travel program can be significant if leakage is widespread among employees:

  • Visibility over bookings decreases;
  • Supplier negotiations are affected;
  • Expense reconciliation takes longer; and
  • Traveler safety and security is compromised.

The good news is that there’s consensus in the business travel world that leakage will decrease post-COVID. Let’s step through some of the likely scenarios that will play out over the coming months as businesses return to booking travel:

More eyes on the travel booking process

Businesses in this new economic climate will be more cost conscious, so they are likely to place more emphasis on stamping out leakage. There will be more emphasis on what the value of travel is to a business, so in turn there will be a higher level of scrutiny on travel pre-approvals. This will provide more visibility to the company before travel is even booked.

Technology will become king (again)

Business travel tools and information help you manage, book and travel with ease. It will also become more crucial for decision makers to help provide the visibility to track and report on spend. When it comes to traveler safety, companies will have more emphasis on data integrity. They will want to know who is traveling and where, in a live and up-to-date platform which TMCs will be able to provide if people are booking within travel policy.

Companies will also be investigating other tools to keep an eye on compliance. FCM’s partnership with Shep helps companies manage and measure travel behavior both inside corporate booking environments, like Concur, as well as on consumer travel sites, like Expedia and Airbnb.

Shep uses browser extension technology to overlay messaging and user interaction elements on top of corporate and consumer travel sites. Shep also collects cross-site booking and behavioral data so that travel managers and travel management companies can understand what, where, and why employees are choosing to book their business travel.

Pennies will be counted

In times like COVID-19, cost consolidation is very important. If leakage is minimal then there is better visibility on cost control which will be paramount in this economic climate. Flexibility will be key as the world continues to grapple with the pandemic and companies may be hesitant to risk the financial impact of canceled reservations and variable refund procedures through 3rd party consumer sites.

Less leakage to alternative accommodation providers

Pre-COVID, there was always the argument that booking direct with alternative accommodation providers such as Airbnb saved money. However, increased hygiene protocols will become paramount to traveler safety, so travelers will be more cautious when booking with providers who cannot guarantee increased hygiene practices.

Customer service will reign supreme

With an industry under pressure, businesses can expect varying degrees of response from suppliers who may be impacted by increased call volumes and reduced staff numbers. This means it can be difficult to establish the status of refunds, cancelations or credits, and companies end up spending too many hours working on a solution that could be quite simple when managed by an experienced travel consultant.

Duty of Care will become number one

Businesses’ duty of care responsibility will become a top priority right across the globe. To help ensure companies can provide this level of care; employees will need to have a clear understanding of their businesses travel policy. Companies will need to know at any given time where their employees are as we’ve all seen how quickly borders can close, leaving travelers stranded with no way home.

Four ways to reduce program leakage

1. Review and revise your travel policy – Often the best way to let your travelers know what they can and cannot do is to simplify it for them. Think about creating a one-page version that clearly outlines the main directives. FCM have created a tool that will take the key points of your travel policy and create a one-page infographic. It may also be time to develop an interim travel policy that is better suited to the current environment and makes mandating more achievable.

2. Streamline the approval process – Travelers are more likely to follow an approval process if it is not too arduous or lengthy. While justifying travel at this point may require additional layers of approval, try to keep the process as simple as possible to encourage travelers to follow the right steps.

3. Recognize and reward policy adherence – Think about developing a program that encourages policy adherence by means of incentives or recognition. This could be based on key policy elements such as advance purchase or booking through the correct channels. FCM can support this through an existing program that sends KPIs to travelers every month, so they gain a better understanding of how their booking behavior makes an impact to your travel program (both positive and negative).

4. Engage and educate travelers – This period of travel downtime may provide the ideal opportunity to provide refresher training and educate travelers on approved booking channels as well as the technology tools that they should be utilizing. Speak to your TMC about setting up training webinars or assisting with virtual travel fairs that can engage and educate.

The travel landscape post-COVID is going to look very different. But that doesn’t mean it has to be harder for travel program managers. By working closely with your TMC you can start to take important steps now to ensure your travelers understand the risk by not complying with your travel policy when the world opens up again for travel.

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