Travel Management Companies (TMCs) came into existence to help large corporations, streamline, operationalize and seamlessly manage corporate travel process. A TMC can negotiate the best rates for a corporation, handle procurement, the right itinerary, freeing up employee’s time to focus on their core responsibilities i.e. to focus only on their work and realizing the objective of their travel.

Centralized travel booking also means higher visibility to the corporate, helping with the responsibility of duty of care, also helping create key efficiencies and savings.

TMCs are also tasked with the important assignment for risk assessments and providing support in real-time. This is a critical part of ‘duty of care’, the moral and/or legal obligation of corporates to ensure the safety or well-being of their employees.

Rogue Travel: Trends, Causes and Implications

While the idea of letting the experts take care of travel management is ideal, the reality is far from perfect. Rogue Corporate Travel, where employees make bookings outside their company’s chosen travel management system, is common:

  • 37% hotel bookings and 15% air bookings on average were made outside of a TMC or online booking tool, according to research released in 2018 by the Global Travel Business Association
  • Another 2018 report by the Expedia Affiliate Network mentioned that “68% of business traveler respondents booked more than half their corporate trips using non-approved consumer channels.”

Why does this happen? Flexibility, convenience and price are the dominant factors. Some employees want better accommodation, some prefer the easier process, some are lured by loyalty points. According to Phocuswright, “many travelers who book outside of their policy believe they are saving their company money by shopping for better deals.” (The Business Traveler, 2016)”

With millennials accounting for a majority of corporate travelers, the violation numbers are increasing. The reason millennials bypass TMCs range from a yearning for experience-based travel to having the flexibility of adding a few days of fun to top off a business trip a trend termed as “bleisure” i.e. blurring the line between business and leisure.

A 2017 survey by Business Travel News cited “the lack of quality shopping and booking tools for business travel, the desire for more convenient travel choices, an easier expense process and a nagging desire for better work-life balance” as the reasons corporate travelers go rogue.

The impact of these violations on TMCs is severe. According to Travel Weekly, “Unaccounted-for travel bookings mean the (TMC) won’t be able to take advantage of its full buying power when negotiating with suppliers, which could affect the company’s performance regarding contractual share or volume commitments.” If the number of rogue corporate travelers keeps rising, a TMC’s business travel operational model and position in the corporate ecosystem may be misunderstood, resulting in a lack of transparency in the system.

Price of Non-compliance

Lower rates and greater convenience of the non-corporate booking platforms hide a huge hidden cost, that of the company not fulfilling its duty of care, the implications of which many employees may not even realize. It is up to the corporates to focus on ‘duty of care’ in their risk management plan and travel policy.

When liability begins and ends harks back to the definition of duty of care. To fulfill their duty of care, corporates are expected to provide consolidated information on travel itineraries, particularly for high-risk destinations, issue alerts regarding events and disruptions, ensure traveler profiles — including emergency numbers and health records — are current, track employees based on ticketed itineraries and provide support, including itinerary change, advice and emergency response.

Out of policy bookings reduce the visibility of companies, making it difficult, if not impossible, for them to discharge ‘duty of care’. Depending on the law of the land, this can result in costly measures against the company. Its brand and perception might also be dented for good.

Companies without a realistic duty of care policy, and effective travel risk management program are sitting on a ticking time-bomb. It’s not a matter of if they will need it, but when.

Duty of care has a positive rub-off too. Employees work better if the TMC appointed by employer simplifies travel processes and keeps them from dealing with nuisances of travel management on their own.

Improving Compliance and Discharging Duty of Care

Compliance increases if travel policy is designed around what employees want. Often companies are more concerned with optimizing expenditure than traveler satisfaction. Enhancing employee experience starting right from the moment of booking till their return is crucial to improving compliance, which in turn improves the discharge of ‘duty of care’.

Communication is just as important to meet business traveler expectations. Complete the feedback loop — listen to the experiences of the traveler, understand the reasons they go rogue and implement remedial measures to make the journey from enforcer to enabler.

You can also expand your range of onboard partners to ensure that the most suitable airlines and hotels are covered, and your TMC or online booking channels offer the prices that corporate travelers get elsewhere. Offering a variety of appropriate options will give your employees a choice to crave and encourage them to remain within policy. Automated travel approval technology can make it easier for travelers to make the right decisions.

But all these steps are redundant if the rates are not correct either in the online booking system and or not available at the time of booking. Corporates should regularly audit their TMCs to ensure accurate negotiated rates and completeness of data on the travel portal, which will inevitably lead to higher compliance. This is where RateGain comes in.

RateGain is playing a critical role by helping world-leaders in TMCs to be on top of negotiated rates, ensuring that they meet their goals, deliver on their brand promise and duty of care, leading to higher corporate customer travel satisfaction.

About the Author

Melissa Jones
Associate Vice President

Melissa Jones, the business development pricipal leading RateGain in the Travel Management Company segment is an experienced SAAS Sales Executive with 15+ years of expertise of working in the industry. A strategist and an inspirational leader, she is higly skilled in understanding current & future travel initiatives and travel technology