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

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. When this happens, gaps start to appear in your data and your reporting abilities. 

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 programme? 

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’. 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 what is 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.  

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 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 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 behaviour both inside corporate booking environments, like Serko or SAVI, 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 behavioural 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.  

Less leakage to alternative accommodation providers  

Pre-COVID-19, there was always the argument that booking direct with alternative accommodation providers such as Air B&B saved money.  

However, increased hygiene protocols will become paramount to traveller safety, so travellers will be more cautious when booking with providers who cannot guarantee increased hygiene practises.  

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. 

One example where customer service is critical is New Zealand’s Ministry of Business, Innovation and Employment. They needed to arrange travel back to New Zealand for their staff based overseas due to the escalation of COVID-19 worldwide and the New Zealand Government urging Kiwis to come home. All within a very short timeframe, our FCM team managed travel for 25 different families, from 7 different countries to come home before the borders were closed.