The Curious Case Against Managing Travel

Achieve better trips. Increase traveler satisfaction. Spend less on travel.

That’s the trifecta of travel management, isn’t it? So which horse would you bet on to deliver these wins – the one with, or without, a jockey?  The managed travel program, or the unmanaged travel program?

GBTA’s “Global Business Traveler Study 2012″, a 72-page report, shows the winner is the unmanaged program – and it’s not even a close race.  That’s the conclusion I draw from the study’s facts as they pertain to U.S. travelers.

  • 82% of unmanaged travelers are very satisfied with their business travel over the last 12 months, compared to 70% of managed travelers (page 20)
  • Unmanaged travelers score notably higher on GBTA’s Business Travel Success Index (TM), than managed travelers (page 24) .  This index takes 14 factors into account, such as “Staying within my travel budget”, “Minimizing in-transit travel hassles that inconvenience me”, and “Making sure I feel safe when traveling”.  (page 72)

OK, so you’re thinking “Well, of course…those unmanaged travelers are treating themselves like royalty on the road.  I’d be happy, too, if I didn’t have to comply with a travel policy.”

Here’s the kicker: The average unmanaged business trip costs 33% less than in a mandated program – $2,457 compared to $3,663.  And the unmanaged trip is 15% longer than the average trip in a mandated program – 3.9 nights versus 3.4 nights. (pages 8, 32).

Some of that cost differential is apparently due to more international travel by those in a mandated program. Still, trip costs and their international mix were nearly the same between unmanaged travel and those from “guideline” programs: $2,457 unmanaged versus $2,536 for those under guidelines (pages 32, 35).  

You can’t conclude from this report that managing travel saves money. You can conclude that managing travelers decreases their satisfaction and their ability to achieve their travel-related goals.

So why are we managing travel? Why not just scrap the overhead costs, and trust travelers to do the right thing?

I think it comes down to three factors: Culture, data and safety.  I’ll expand on this in my next post. Update: That next post is here.

GBTA members can download a free copy of the report after logging in to the GBTA Resource Directory.  Non-members can purchase a copy of the report for $499, but you may be better off joining GBTA – membership types and prices are here.

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10 Responses to The Curious Case Against Managing Travel

  1. Evan Konwiser says:

    Scott-

    The real difference is between travelers that work for small companies or themselves, where travel is more often the decision of the traveler, compared to larger companies where the traveler, the budget owner, and the payer are 3 separate parties instead of one.

    Look to that to influence these results far more than the tools used to manage the travel.

    • JJ Konon says:

      I totally agree with Evan. Unmanaged travelers are most likely working for smaller companies with smaller travel budgets. I can’t think of a single mid or large market company that doesn’t manage their travel.

    • Scott Gillespie says:

      Evan, I would agree with your reasoning, but the ~ 360 unmanaged U.S. travelers surveyed for the study claimed an annual company revenue of $9.1 billion, on average. If the data is correct, that means these findings are valid for the bigger companies.

  2. Virginia says:

    As a small business owner I am really curious to see who has the time to complete GBTA survey’s -so the first question must be a analysis of the buyer groups then we can really conclude whether these results apply to small or larger companies. But, maybe real story is this : its all about grass roots savings and maybe just maybe travellers/employees are now assuming some personal respoonsibilty to drive down costs? Could it be this simplistic?

  3. C99 says:

    Some big companies are starting to discover that, with the right culture and data control unmanaged travel is an option. Google is one of them … The travel manager told once that she could not understand why others were not doing the same!

  4. Steve Reynolds says:

    Its been shown many times that employees will make the right decisions whether its buying a laptop, mobile phone, travel, or office supplies. Its a different experience when you volunteer to sit in the middle seat or take a connection to save company money versus being forced to do so.

  5. There are many concerns left unspoken here. First off, is the reason for travel – it’s value! What is the value of the travel? What is the value of the mode of the travel. It is not simply time or expense savings.

    The real reason we travel is to get somewhere so that we can do something – valuable. If the value does not exceed the cost, we are in the hole. Does that mean that the cheapest cost are always in order? Could higher travel cost contribute to higher effectiveness, efficiency and contribute to reduced risk on the trip? These are important factors.

    The argument to manage or not means that the above mentioned concerns can be monitored, and accounted for. Lets not forget the value side of our missions. Are we tracking it? Are the projects that travel is serving, tracking the contribution of travel and the effectiveness, efficiency and risk of the mode used?

  6. Pingback: Why Bother Managing Travel? | Gillespie's Guide to Travel+Procurement

  7. Pingback: Gant Travel News 6/29/2012 | Gant Travel Blog

  8. Godfrey Millstone says:

    I don’t believe the cost of Duty of Care is included in the survey. If an organization has travelers booking their own travel and a major disaster happens (ash cloud, Japan Tsunami) and the organization can’t assist in a timely fashion because the employees are not able to be located, then the financial risk to the company keeps getting more and more inflated as no contact or even a contingency plan to get them out of harms way. I think for every $5 or $10 savngs vs paying a fee for managed travel, or telling an employee to go with a more expensive hotel or airline because the safety factors involved, will be destroyed in one disaster. This could lead to Major lawsuits. The legal fees alone will more than eat up the savings by the unamanaged program. Let alone if the company must pay any financial reward to the affected party(ies).

    I think surveys like this are interesting, but they only tell 1/10th of the true story.

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