Why Bother Managing Travel?

That’s a serious question, after reading this recent GBTA report.

The key findings, covered in more detail here, show that unmanaged travelers achieve better business trips, are more satisfied with their business travel – and here’s the kicker – don’t spend any more than their managed traveler counterparts.

Let’s assume the study is valid, and that managing travel doesn’t produce significant savings.  Deep breaths, everybody – we can debate that last point later. For the sake of argument, if there aren’t significant savings from managing travel, why would we do it?

Three reasons come to mind: Culture, data and safety.

Culture: Managers need fence posts – markers that tell employees what’s expected.  With travel being such a personal purchase, it’s easy to see why companies want to apply travel policies. It’s an efficient way of defining fence posts.

Beyond liking fence posts, managers have a deep-rooted belief that managing most anything is productive.  It’s hard to imagine asking a Senior Vice President in most any company “So, should we manage our travel program centrally, or leave everything up to our travelers and their budget managers?”

The answer is predictable, unless more data emerges to challenge current common wisdom.

Data: Travel accounts for roughly one percent of a company’s revenues.  Not a huge chunk, but enough to warrant collecting as much data as is practical.  Even if management trusts their travelers to do the right thing, they want data at hand to answer the inevitable questions about policy compliance,  spending trends, and achieved and potential savings.

It’s been impossible to collect sufficient data without having a managed travel program.  That could change with the likes of ProcureApp and Concur’s Open Booking tools. Until then, managed travel programs are the only practical conduit of useful travel data.

Safety: This is the trump card. Management understands the need for traveler safety, and that the only practical way to achieve that is with good travel data.  Even if managed programs didn’t deliver savings, they’d be needed to deliver traveler safety.

The Bigger Question: Setting the issue of savings aside, the two most fascinating findings from GBTA’s study are that unmanaged travelers achieve better results from their trips, and that they are much more satisfied with their travel.

OK, so if we need managed travel programs for the reasons above, how do we blend the essentials of managed travel with the freedoms – and benefits – enjoyed by unmanaged travelers?

Evan Konwiser and I will take this up in our session “Managed Travel 2.0″ next month at the GBTA Convention in Boston.  Meanwhile, if you’ve got any ideas, we’re all ears!

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9 Responses to Why Bother Managing Travel?

  1. Pingback: The Curious Case Against Managing Travel | Gillespie's Guide to Travel+Procurement

  2. mike says:

    excellent article as always. More evidence that travellers could and should be trusted by companies. now if only someone would create effective open data aggregation tools! procure ap and tripit both on the right track.

    • Great read and thanks for the mention! Given the high volume of hotel spend that is already “Maverick” at well managed companies – something is desperately needed to augment data,safety and negotiating leverage. It’s great to see this debate move from why to how….

      –Phil Hammer, CEO ProcureApp

  3. Results are in line with what I have been advocating for months … Managing does not mean creating a stringent travel policy in PDF and deploying a corporate online booking tool. Intelligence is key. More than data.
    You also need to personalize the corporate program based on travelers behaviors and company business value chain.
    The main need for a traveler today is “to be in control” since he knows better than a tool what is best for him. The tools should help find the best solution, not mandate the lowest fare.
    Another comment is: for an employee, if the travel is managed, why should he care? He needs to obey to rules and tools, not to think and optimize. It’s not the case for unmanaged travelers.
    Companies need to segment their traveller based on their trip patterns and value creation ratio for the company, then negotiate with airlines and Hotels if needed (travel program is still needed) and then educate, empower and responsabilise their travelers.
    Empower travelers, let them think they contributed to the company savings because “they did their job”, and not because they push the right button.

  4. ROLFE SHELLENBERGER says:

    Scott:
    You and I have been involved in this dialog for some time now. I really think that travel management should morph into geography management, something travel managers do to some extent but not very directly. Geography management assists in executive decisions for where and when to conduct business; whether a local branch is a superior strategy for coverage rather than periodic access by travel; what are benefits related to geographic change; what are liabilities, how to get there, frequency of coverage, etc. I keep thinking of a sales executive in middle Illinois who was trying to convince his boss that moving him to Phoenix would save enormous amounts of money on travel expense. He sent his travel data to me and I analyzed it. His move to Phoenix would make sense because of fare disparity.
    Rolfe

  5. Great discussion and food for thought re: the future of managed travel programs. I can certainly see many advantages of “unmanaged travel”, which is difficult to admit being the Travel Manager for a mid-sized government contractor. I do have a question specific to government contractor travel though, how would you satisfy the requirement for proof of the lowest available airfare to the contractor at time of purchase for transactions outside of the managed travel model?

    • Scott Gillespie says:

      Ginger, thanks for joining the conversation. You raise a great point, one that may be similar to the issue of ensuring compliance to Sarbanes-Oxley requirements for publicly-traded companies.

      It seems you’d need a 3rd party to test the traveler’s fare and report the results. This test would need to be done very near the time of booking. By definition, making your travelers send their fares off to a 3rd party becomes a managed process. But maybe that would be seen as an acceptable trade-off for the freedom of being able to shop and/or book anywhere.

      Or, you might allow travelers to shop anywhere, so long as they book their travel through the corporate booking tool. That’s the idea behind BookIt from Short’s Travel. (see more at http://gillespie411.wordpress.com/2011/12/02/shorts-book-it-a-brilliant-booking-breakthrough/). This approach automatically brings in more competitive fares, including those that are eligible for corporate discounts.

      But then we’re back into a managed program, aren’t we?

      Hopefully other readers will have some ideas on this key issue!

      • Brilliant question here. The big challenge with other solutions is the point at which the traveler has to forward emails to be parsed and then integrated with data providers. Given travelers are busy, unaware of policies, this is a big ask and would need to be done at the point of sale in order to ensure proper rate/fare checking against lowest available price. What happens if the traveler forwards an itinerary by email 3 days after booking or prior to departure? I suppose this could be done, I’m not hearing anyone discussing this critical weak link.

        We think you have two choices: 1) 100% compliance to preferred booking channels – any leakage risks government audit if your company’s case. 2) Automatically capture flight details at the point of sale for mid-office treatment against low fares, negotiated rates & policy – with little traveler involvement (this is key). Communicate back to traveler to re-book if there’s been a policy violation. Simple is always better and # 1 sounds a little easier for all…

        –Phil Hammer

  6. Matt DeWolf says:

    Scott,

    Agreed- travel management isn’t going away, but most believe that it needs to evolve. So blending the essentials of managed travel with the freedoms and benefits enjoyed by unmanaged travelers is indeed the way to frame this discussion.

    I think the answers to this conundrum are tools which not only empower employees, but simultaneously motivate them to travel responsibly. The executives and early adopters that I’ve been speaking with are looking for smarter and more elegant solutions that apply the proper amount of management to the travel experience. To achieve what you described above, the next generation of travel management practices will need to focus on techniques that empower employees with intelligent data, and let them to use their own best judgment as long as they abide by reasonable guidelines. This approach is covered in a new whitepaper on this concept titled, “Empowering Employees to Travel Smart and Save Money With Gamification of Travel Booking”.

    Here’s the link: http://mobility.runzheimer.com/SmartTrip-Gamification-Whitepaper

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