Open Travel Policies Spark Debate Among TMCs

This is the third in a series on Travel 2.0.

The idea that loosening travel mandates will produce happier, more productive, and less expensive business travelers has solid support. But travel management companies are wary of what is being called Travel 2.0.

A study conducted for the Global Business Travel Association earlier this year found that travelers who are completely unmanaged spend longer on the road and spend less than travelers restricted by travel policy mandates.

A question of balance
But Goran Gligorovic, executive vice president of Omega World Travel, is among those who are not convinced. “Open travel, letting your people travel where they want, when they want, how they want, makes better articles than travel policy,” he told Travel Market Report.

“Corporations must manage costs and data. You cannot do that effectively if you allow employees to travel on their own. You need to balance the company’s needs for cost control and data with travelers’ needs and preferences.”

Ease up on restrictions
Consultants Scott Gillespie and Evan Konwiser used the GBTA survey results to urge travel managers to ease policy restrictions and reduce travel costs. Forget travel savings, they advised, and focus on travel spend. (See related story, “Travel 2.0: Biz Travelers, Not Mandates, Lead the Way,”  Aug. 13, 2012.)

The pair said it was time to move away from Travel 1.0, travel focused on policy and mandates, and toward Travel 2.0, travel focused on travelers’ needs for productivity, efficiency, and satisfaction.

Travelers are already making the move, they noted. The more frequently a traveler is on the road, the more like he or she is to be actively searching, booking, and buying using the same online and mobile tools that have transformed consumer travel.

Traveler-centric not the norm
Travelers may be in the driver’s seat at some companies, but not many, said David Mitchell, BCD Travel senior vice president of supplier relations for the Americas. Traveler-centric policy is as rare as free child care, gourmet meals, and same-day dry cleaning at the office. Nice perks if you can get them, but hardly the norm.

“Things continue to evolve, but there is not a lot of evidence that turning cost management over to your travelers results in cost savings,” Mitchell said. “There is plenty of evidence that a well-managed travel program can save money.”

That’s not to say that all companies should, or even could, manage with the same travel policies. Some BCD client companies manage to travel benchmarks and savings goals. Other companies manage to travel budget. Both can be effective, depending on corporate culture, workforce, type of travel, and other factors that can vary from organization to organization.

Less restrictive works best
For Gillespie and Konwiser, companies don’t have much choice about moving to less restrictive travel policies. It’s not that travelers are out to sabotage policy, they just fail to see the need for policy that boosts the cost of travel by restricting booking channels and vendor choices.

The GBTA study, Global Business Travel 2012, found that unmanaged travelers spend a half-day longer on the typical business trip than their managed colleagues. At the same time, those unmanaged travelers spend $1,200 less per trip compared to their managed colleagues.

“Unmanaged travelers are finding cheaper flights and hotels on their own than companies’ own negotiated rates,” said Gina Woodall, senior vice president for Rockbridge Associates, which conducted the study for GBTA.

Closer look at negotiation
Even if companies hesitate to allow open booking, they should be taking a close look at their own vendor negotiation strategies, according to Joel Wartgow, senior director, Carlson Wagonlit Solutions Group, Americas.

While companies may not like it when travelers go outside policy, travel managers can use rogue travelers as sources of important market intelligence, he said.

“Negotiations should result in a vendor having the lowest cost and business flowing naturally to them. If travelers are finding less expensive deals on their own, it is an opportunity to improve the relationship with the vendor. That has to be communicated to the vendor.”

There is a new willingness by travel managers to embrace the information travelers can share, Wartgow added.

Information resource
A year ago, most companies were somewhere between uninterested and hostile to the idea that travelers were looking outside the official booking channels. Today, travelers using third party apps and other unofficial travel tools are seen less as a control issue and more as an information resource.

“Policy is disconnected from travelers,” Wartgow said. “Policy is too often a one-size fits all that was not designed with the traveler in mind. If you can introduce flexibility into policy, you may enhance your impact on cost, productivity and traveler safety.”

Evolution of policy
The idea of unmanaged travel may not sit comfortably in the TMC community, but some managers noted that flexibility is growing more acceptable. Travel policy, like everything else in business, continues to evolve.

Part of that evolution is the emergence of travel data as a key asset, Gligorovic said. Omega and its client companies recognize that individual travelers can often beat negotiated prices for air and hotel. And while they are happy with the financial savings, they can’t afford to lose track of travelers.

“Corporations are responsible for employees on the road,” Gligorovic said. “If you book outside channels, the company doesn’t know where you are but they are still responsible for you. It’s not that they don’t care that you saved them money by booking out of policy. They just recognize that there are costs more important than price.”

Emerging tech solutions
There are technology solutions on the way, he said. Concur, for example, has a deal with Marriott that any Marriott booking is automatically moved into the traveler’s profile. The company never has to worry about losing track of the traveler – as long as the company uses Concur and the traveler books Marriott.

“These kinds of tools are emerging, but they are not very mature,” Gligorovic said. “It shows you where the industry is going. These tools that support more flexible booking are not much used today, but they are growing. It all goes back to the idea that data matters.”