We know that a definition, by definition, is subjective. When asked to define the attributes of a managed travel program, I summarized it (on many occasions, including in testimony) as having at least three core components:
1. A clearly defined Travel Policy
2. Booking travel consistent with the Travel Policy for:
a. Booking channel (must booked via the TMC or OBT)
b. Payment: (must be via a company-approved corporate card or central bill for airfare)
c. Compliance: To a number of areas:
i. Airfare booked at the lowest logical price (travel time, departure time)
ii. Hotel booked at the preferred hotel
- At the company negotiated discounts
2. Booked at the allowed room type
3. Management oversight of compliance to the Travel Policy:
a. Approve for out-of-policy bookings
b. TMC reporting instances where the policy is not being followed (airfare, unattached hotel, non-preferred hotel etc.)
c. Auditing Travel Costs
i. Post-trip (too late to action or mitigate the over-payment
ii. Pre-trip (the only way to capture non-compliance and have the PNR rebooked within policy).
Different Levels of Managed Travel Programs
A managed travel program in three ways:
• Reliance
• Compliance
• Defiance
Here’s the differences among them:
Reliance: I’ve seen a 1-page travel policy that simply encourages employees to “Do The Right Thing.” It sounds culturally embracing and abounds with trust but there are too many outside influences that make it too tempting for a traveler to book a higher fare, higher room category, or their own choice of hotel to maximize points.
Compliance: Compliance is a strong word and for many companies they would prefer to use language in their policy that is “softer.” For example: “We encourage employees to book the lowest fare within our Travel Policy.”
That language has no consequence for not following it. But this language does: “Employees must book the lowest airfare within policy but would not be required to take a connecting flight to save on the cost if time is of the essence.”
As to hotels, consider a policy stated this way: “Employees should book a company preferred hotel whenever practical unless meeting with a client and staying at one of their preferred hotels.” This language is why after more than a decade, hotels in the “unattached” category are still at 50 percent or more.
The language leaves it open for employees to book their hotel directly with the property instead of via the OBT or TMC. This results in a risk-management danger (not being able to locate half of your employees in an emergency) and artificially increases the TMC transaction fees to make up for their shortfall in GDS and hotel commission income.
Defiance Defiance is a strong word but as it relates to the company Travel Policy, any time an employee intentionally “violates” the travel policy it means they knew what the policy language was, but decided to pick their travel components based on WIFM (what’s in it for me). If there’s no systems of checks and balances, then they have found a loophole and can claim ignorance of the “violation” unless they are advised before travel commences. Auditing an expense report after the fact won’t save on the cost of a trip that has already been travelled.
Defining the Management of Travel
The value of a managed travel program is a function of how well it is “managed.” Having a written policy that is not communicated and updated on a regular basis is just another “book on a shelf.” The travel policy has to be activated at time of booking, so that the traveler is guided towards “making the right decision” based on what’s presented on the first screen of an OBT.
Once the traveler has selected their flights and hotel (in the same PNR) it’s then up to the Travel Manager to ensure that the TMC’s performance in ensuring that the lowest prices within policy have been booked – prior to the traveler’s departure.
This requires that the TMC can replicate what a skeptical traveler would do to see if there’s a lower fare on an airline’s website. We know that they can’t find a better deal than a corporate net rate for a hotel; for airfares it could be a difference of a thousand dollar or more for one trip.
