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 dollars and productivity hour’s 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 centralised.

But now with COVID-19 changing the business travel landscape, we find ourselves in a unique position where we are able 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. 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 in the 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:

  1. You end up paying more in the end;
  2. Visibility over bookings decreases;
  3. Supplier negotiations are affected;
  4. Expense reconciliation takes longer; and
  5. 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 practices.

Four ways to reduce program leakage

1. Review and revise your travel policy – Often the best way to let your travellers 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. 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 – Travellers 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 travellers 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. 

4. Engage and educate travellers – This period of travel downtime may provide the ideal opportunity to provide refresher training and educate travellers 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 roadshows that can engage and educate.

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.

“Our FCM Travel Managers did an amazing job supporting me to get all of my international flights booked and rebooked,” said Adri Johnstone, Offshore Coordinator for Immigration NZ.

“FCM can be very proud of these two staff members – their worth is much more than gold!”

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 travellers stranded with no way home.

 

The travel landscape post-COVID-19 is going to look very different. 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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