Will leakage from travel policies be impacted by COVID19?

Travel Leakage Blog

Travel programme leakage is the bane of any travel programme manager the world over. Before COVID-19 hit, businesses were seeing time and money march out the door as employees chose to book outside of policy and expense back at a later date. But with COVID-19 changing the business travel landscape, we find ourselves in a unique position to hit the reset button on booking behaviour and tackle travel leakage once and for all. 

What is travel management leakage? 

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

While many corporates with managed travel programmes 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 policy? 

At face value, airline or hotel websites can be appealing to a traveller with simple travel needs. There are the perceived benefits of convenience and simplicity, and of course, the perception of ‘lowest rates’.

Office working

Travellers 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 programme can be significant if leakage is widespread among employees: 

  • You end up paying more in the end; 
  • Visibility over bookings decreases;  
  • Supplier negotiations are affected; 
  • Expense reconciliation takes longer; and 
  • Traveller safety and security is compromised.

The good news is that there’s consensus in the business travel world that leakage will decrease post-COVID-19.  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 identifying the value of travel 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 and help reduce leakage.  

Duty of Care will become number one 

COVID-19 has redefined companies' duty of care and travel risk management to a whole new level. The pandemic has highlighted how critical it is for businesses to have visibility of all their travellers’ bookings, so they can quickly track their whereabouts, see if they are impacted and effectively support them.

To help ensure this visibility, employees will need to have a clear understanding of their businesses travel policy. Educating travellers on the importance of booking within policy to ensure their own safety and wellbeing will be more essential than ever and a key driver for compliance. 

SoM report

Pennies will be counted 

When employees deviate from booking processes, consolidating data and identifying ways to enhance your travel programme verges on the impossible. If leakage is minimal then there is better visibility on cost control, which will be paramount in the current economic climate.  What's more, bookings made through alternative channels create additional costs to businesses in lost time – time is money and it all adds up.

With cost consolidation increasingly important, businesses will look to ensure their booking systems are effective, with integrated travel policies, and that travellers are educated on the company policy and booking tools in order to maximise efficiencies. 

Less leakage to alternative accommodation providers  

Pre-COVID-19, there was always the argument that booking direct with alternative accommodation providers such as Airbnb saved money. However, increased hygiene protocols have become paramount to traveller safety, so travellers will be more cautious when booking with providers who cannot guarantee increased hygiene practises.  

Technology will become king (again) 

When it comes to traveller safety, companies will have more emphasis on data integrity. They will want to know who is travelling and where, in a live and up-to-date platform - something that is only possible if employees book within policy. 

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

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Customer service will reign supreme 

There’s increasing stories of businesses whose employees have booked directly with suppliers and haven't had a response back. It has proven difficult to establish what is happening with refunds, cancellations or credits, and they are spending too many hours working on a solution that should be quite simple when managed by an experienced travel consultant. This could mean their employees will be less likely to book directly again in the future. 

 

The travel landscape post-COVID-19 is going to look very different for the foreseeable future. But that doesn’t mean it has to be harder for travel programme managers. By working closely with your TMC you can start to take important steps now to ensure your travellers understand the risk by not complying with your travel policy when the world open up again for travel.  

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