Background: Defining a Managed Travel Program
Managed Travel is an ill-defined term and in many ways a term of art. The way I’ve defined the differences between a managed and unmanaged travel program is by explaining the basic attributes of a Managed Travel Program:
- A written travel policy that is communicated to all employees who book travel or consume travel
2. A travel policy that is enforced at time of booking
3. Clarity on the requirement to book all components of travel via the “Company Approved Channels”
a. TMC
b. OBT
4. A list of preferred hotels where employees are expected to stay
5. A list of preferred airlines that offer discounts and amenities to the travelers
6. Clear processes and procedures on how to seek approval for travel or exceptions to the policy
7. A defined outcome of not following the travel policy on a consistent basis (termination of card or termination of employment)
Three Way Street
There are three levels of a managed travel program:
- Politely
2. Lightly
3. Tightly
A politely managed program avoids words like “should,” “must,” “required,” and instead uses “encouraged.” If that tone appears throughout the document, then it is not a “Travel Policy.” At best they are “Travel Guidelines.”
A lightly managed program offers more clarity and uses “should” when it comes to how travel is booked and what suppliers are to be used for airline and hotel. There’s not much enforcement around hotel bookings which is why even in 2025 we’ve seen statistics that greater than 50 percent of corporate hotel bookings are made by the traveler directly on the hotel’s website.
A good example of a tightly managed travel program goes back to when I was the VP of global travel at a bank. The famous “elevator pitch” that I had with our chairman (on the way to his suite and he only had time to talk with me in the elevator because a large country’s economy was collapsing) went as follows:
Me: “One third of our travelers don’t book their hotel through our corporate travel department and I need your support to get that fixed.”
CEO: “What’s the problem? It sounds like the majority are booking through your department?”
Me: “There are two issues. The most significant one is that in an earthquake, mass shooting, tornado, etc., I won’t be able to tell you where a third of our travelers are in that city. The other issue is that they are picking their own hotels and room types; overpaying what we’ve negotiated and impacting our ability to get greater discounts.”
CEO: “OK, you made your case. What do you want me to approve?”
Me: “I want you to sign a letter that I will write and add to the travel policy as follows: ‘If a bank employee does not book their entire business trip through the corporate travel department, they will not be allowed to travel, nor will they be reimbursed.”
(Elevator dings at penthouse level)
CEO: “You write it up and I will sign it today.”
The Challenges to a Managed Travel Program
In order to add credibility to the tightly managed program, I included in my e-mail to all traveling employees that if anyone “found a cheaper fare on the Internet,” our CTD would review it and, if true, we would make the change to the PNR that we booked.
In the subsequent three years, only one employee claimed to have found a cheaper fare LGA/ORD (on a low-cost carrier) and he copied in our chairman, president and four vice-chairmen. Unfortunately for him when I researched it, his carrier/flight of choice not only canceled, it was stuck in Chicago for three days.
The only other challenge was from the chairman himself. He said his son had found a cheaper fare than our CTD did. I offered to come up to his office and instead he came down to sit with me. I turned my laptop around and said, “Go ahead, show me.”
After 7 minutes of him clicking away, it was clear that no such fare existed. I made a face and he asked, “What are you not saying to me?” I told him that I used my timer and based on his base compensation, he wasted over a thousand dollars of shareholder money by trying to book it himself. I told him about our “lowest fare guarantee” and he shook my hand and went back upstairs. Never heard another word from any traveler about finding a lower fare.
The Credibility of a Managed Travel Program
The first time there was an industry challenge was when Air Canada introduced “Tango Fares.” All the passenger got was a seatbelt (no seat assignment, meal, overhead bin access) and it was $99 each way. AC assumed that business travelers would not consume that “product” and kept it out of the GDS. The TMCs and travel managers had to defend and explain why they couldn’t access those cheaper fares.
Fast forward and the major airlines made a deal with the GDS to offer Full Content in exchange for lower fees from the GDS, who in turn lowered their incentive payments to TMCs. When those agreements expired, airlines could return to listing fares on their websites that are not available or visible in standard EDIFACT.
Once again, we had the credibility issue. The best example is a call that a travel manager received from her CEO. He asked her to explain why for his flight booked in First Class on the OBT, he found the exact same flight for $1300 lower on the carrier’s website. She made the mistake of trying to explain acronyms – GDS, OBT, NDC, FCA, EDIFACT – but the CEO pushed back and demanded a full audit of the TMC and OBT for lowest fare accuracy.
The Takeaways
To sustain, defend and promote a Tightly Managed Program, you have to ensure the accuracy of airfare and hotel rates, and compliance with the travel policy. You can’t mandate compliance if your travelers can find a lower airfare or hotel rate on their own compared to paying a fee to have it booked by the TMC or OBT.If that problem continues to exist, you need to change your online booking tool and/or your TMC.
Or you need to update your resume.
