A sobering trend in business travel is
forcing companies to re-evaluate their processes and systems for controlling
costs.
A recent study by the Global Business
Travel Association (GBTA), reveals that across the board employees are choosing
to ‘do it themselves’ and go out-of-policy when it comes to reserving hotels,
flights and land travel (train/car), as opposed to using their in company
management service.
The study surveyed over 2,000 business
travellers, from six countries around the globe including: The U.S., U.K.,
Canada, France, Germany, and Australia. Its findings clearly point to the fact
that 'out-of-policy decision making is common among business travellers'
with percentages varying depending on the country:
- France: 65%
- United States: 59%
- U.K: 52%
- Canada: 52%
- Germany: 49%
- Australia: 47%
So why are people choosing to ‘go it alone’?
“I booked out of policy because it was
so much easier,” says Mallika Chaudhuri, former design manager at Hey Trends, a
Turkish based fashion company. “It used to take ages and hundreds of emails to
use the in-house system and I also felt that things got lost in translation. So
I booked flights and hotels for me and the team on my own.”
In the on-demand age of globalisation,
consumer online tools are winning out over preferred travel vendors, because
for many, like Chaudhuri, it’s simply more efficient.
The backlash is that companies are
losing out.
As more young, less experienced, tech
savvy travellers working for smaller companies veer further away from the
‘dinosaur age’ of using in-house systems, companies are increasingly losing
money and failing to ensure compliance.
The study shows that those who book out
of policy often end up taking longer trips, staying at more expensive hotels
and booking higher class air and train tickets. Out-of-policy travel choices
are costing companies thousands.
France, for example, has an increased
annual travel cost per out- of-policy traveler, of over 15,000 Euros with the U.K,
spending an added 1,400 pounds (1,900 Euros) per person per year and Australia,
at the bottom of the ladder, still spending 2,600 AUS (1,700 Euros).
Not only does going out-of-policy
affect a company’s financial bottom line, it also plays a role in employees’
productivity. Those who ‘did it themselves’ using OTAs (online travel
agencies), spent more time – usually company time – comparing costs and booking
flights than those who went through the in-house system.
“I've gone out of
policy on occasions where desired flight times weren't available or I could
source a better rate myself,” says a senior manager at a leading software
company based in the U.S. “I would also use it when I wanted to stay at a hotel
that wasn’t part of the available inventory.”
According to the
study, hotel accommodation tops the list for out-of-policy travel, followed by
air/train tickets. When staying at a hotel, there are various ways business
travellers go out-of-policy including:
- Ordering room
service 24%
- Staying at a non-preferred hotel
13%
- Getting in-room entertainment 11%
- Staying an unnecessary extra night
10%
- Staying at a more
expensive/higher-class hotel 8%
- 39% of these travellers state the
choice is for personal reasons
Yet at the
core of people’s motivations to go out-of-policy is the lack of fresh and agile
solutions coming from their employers. When companies fail to keep-up-with
advancing technology, problems arise. In this day and age, online travel
technologies have not only driven greater transparency, but also more
competitive shopping and pricing. OTAs and similar platforms are providing
employees with the know-how to book, travel and spend the way they feel most
comfortable, regardless of their employers' policies. Companies need
to adapt to this world and offer new solutions that empower employees to make
the right decisions independently that work for both the company and the
traveling employee.
This post was written by Javier
Suarez, CPO and Founder of TravelPerk. TravelPerk is an all-in-one travel
management platform where companies can budget, book and manage all of their
business trips in one place while saving 30 % travel costs and 80 % of your
time.
They are looking forward to
exhibit at the Business Travel Show, to meet old and new customers, partners
and other innovators in the industry. Connect them via www.travelperk.com or
Linkedin (www.linkedin.com/in/julianamendez and Javier Suarez)and
meet at the Business Travel Show - register now at
www.businesstravelshow.com
