Rogue Biz Travelers Are Driving Up Costs

Business travelers who book and travel outside travel policy are costing their employers money. The typical out-of-policy traveler spends an average of $2,881 more per year on travel than the average traveler who stays within policy.

“Not only are out-of-policy travelers costing you more money on the road, they are costing you time. They are spending twice as much time shopping and booking than in-policy travelers,” said Joe Bates, vice president of research for the GBTA Foundation.

Yet travelers who go rogue are “just as satisfied with their travel experience as travelers who stay within policy,” Bates said.

Bates presented the results of a survey of U.S. business travelers and travel managers about the incidence of out-of-policy travel and the motivations behind it at the recent GBTA Convention in San Diego. The survey was sponsored by Concur.

More than half are rogues
The bad news: 59% of business travelers said they went out of policy on at least one major travel expense on their latest trip. Nearly all, 90%, made a conscious choice that went against specific policy, such as buying business class air instead of economy or staying an extra hotel night.

“Booking channel isn’t an issue here,” Bates said. “Two-thirds of those travelers who went out of policy did it using your preferred booking channel. Only a third booked through a non-preferred channel.”

Hotel costs affected most
Just over half (55%) of out-of-policy travel involved a hotel stay and cost the company an extra $232 per trip, adding 20% to the category spend.

Almost a third (29%) of out-of-policy travel involved air, but the net impact was a savings of $2 per trip with no effect on category spend.

Another 12% of out-of-policy travel involved rental cars and cost an additional $28 per trip, adding 4% to the category spend.

The net effect was an increased spend of $2,881 per out-of-policy traveler and a 14% increase in travel spend.

Shopping for a better deal
That extra travel cost does not include the value of time spent shopping for travel. Most out-of-policy travelers (79%) reported shopping for a better deal on half or more of their trips. That compares with 56% of in-policy travelers who said they shopped for a better deal on half or more of their trips.

The shopping difference is reflected in the amount of time spent shopping. In-policy travelers report spending 0.82 hours making travel reservations. That compares to 1.53 hours for out-of-policy travelers.

The survey also found a disconnect between what out-of-policy shoppers thought they were doing versus what they actually did. Most out-of-policy travelers, 79%, thought they found a better deal by shopping around. The reality is that out-of-policy travel adds 14% to travel costs.

Mandates not the issue
Why do travelers go out of policy? It isn’t a revolt against mandates. The numbers didn’t change much when segmented by type of policy – travel mandates versus travel policy guidelines.

Among out-of-policy travelers, 26% traveled under strict mandates and 74% under guidelines. Among in-policy travelers, 29%  had mandates and 71% had guidelines.

“It doesn’t really matter what kind of managed travel program you have, you will have about a quarter of your travelers out of policy,” Bates said.

“Satisfaction with travel doesn’t have anything to do with it, either. About three-quarters of travelers are satisfied with their travel experience – whether they are traveling out of policy (74%) or in policy (78%).”

Next time: Tips for improving travel policy compliance