Corporate travel managers deploy technology and policy changes to battle off-channel bookings, which can cause serious headaches when companies are unable to track employee travel and get the most bang for their corporate-travel buck.
TW Illustration by Jenn Martins
TW Illustration by Jenn Martins
Call them rogue bookings or off-channel bookings or program leakage — but also call them ubiquitous, because corporate travel managers the world over and throughout time have had to deal with the issue of their travelers booking outside of their preferred travel management company (TMC) and online booking channels.
And while corporate opinions on the gravity of such bookings run the gamut from a mere annoyance to a dire threat to the integrity of a managed travel program, there is some evidence for the notion that such bookings are on the rise.
So, too, are the mechanisms travel managers can employ to help tackle these bookings, including options from TMCs to help keep travelers in the proper channels and new technology tools to help gather appropriate data when they don’t.
Temptations luring corporate travelers away from their corporate policies are myriad. From relentless, personalized marketing by travel suppliers to a possible lack of availability of certain suppliers in their self-booking tools to their comfort with the big online sites they are accustomed to using for leisure travel, there’s no lack of rationale a business traveler can latch onto to justify an off-channel booking.
But guiding them back into the confines of the program, or at least capturing the details of their whereabouts before their trips start, has been a challenge for years. It’s been going on as long as the concept of corporate travel management has existed.
A tale as old as business travel
Decades ago, businesses began consolidating their travel spending with one or a few agencies as a way to limit expenditures, negotiate volume- or share-based deals with suppliers and maintain a level of service for their traveling employees.
As years went on, the introduction of the internet enabled travelers to search for and book itineraries without calling an agent, and corporate self-booking tools were developed and offered by agencies to allow them to do so. Today, any number of desktop and mobile booking sites and apps have entered the market, and many suppliers enable direct bookings through their channels.
Throughout each period, business travelers have had the wherewithal to book outside their companies’ preferred channels. And in doing so, they introduce certain risks and lost opportunities into their travel program.
From a financial standpoint, unaccounted-for travel bookings mean the company 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.
More importantly, rogue bookings could impair a company’s ability to track their travelers and offer assistance in case of an emergency. While the past few decades unfortunately offer several stark examples of calamity and catastrophe that required extending such assistance to travelers, courts in recent years have made clear that companies have a duty of care to their travelers on the road, whatever channel they book through.
‘What is new is the increasing appreciation that companies of all sizes have with regard to duty of care and safety and security for their travelers. There’s an increasing recognition of that.’
“What is new, I think, is the increasing appreciation that companies of all sizes have with regard to duty of care and safety and security for their travelers,” said Mike Koetting, SAP Concur executive vice president of supplier management and TMC services. “There’s an increasing recognition of that.”
Despite the increasing attention to duty of care and the ways in which off-channel bookings relate to it, such bookings nevertheless are on the rise, according to travel management consultant Will Tate, partner at GoldSpring Consulting.
“There’s just greater and greater demand in the marketplace for people to have a desire to break sort of the corporate channel of purchasing a plan,” Tate said.
‘There’s just greater and greater demand in the marketplace for people to have a desire to break sort of the corporate channel of purchasing a plan.’
Tate cited a few reasons for the uptick in off-channel bookings but pointed to supplier marketing efforts as a key driver.
“Of course — and it’s never going to change — there is the suppliers’ constant emphasis on direct relationships so they can control the customer more tightly, having an airline or a hotel offer something special through their app or through their website that they won’t offer through a TMC,” Tate said.
Airlines, especially, have sought more direct bookings through their channels for years to avoid paying GDS fees. But today’s marketing efforts are more sophisticated and more personalized, and frequently tied to travelers’ loyalty programs. The advent of IATA’s New Distribution Capability standard for data transmission will serve only to further that personalization, Tate said.
“They’re going to be able to say, ‘Wow, Will, we see that you’ve traveled quite a bit, but you haven’t flown on us. So it would be great if we offered you double miles if you flew on us,’” Tate said “So I’m going to have even more incentive” to book outside preferred channels.
Koetting pointed to Hilton Worldwide’s 2016 “Stop Clicking Around” campaign, which encouraged travelers to book directly through the hotel company’s sites, as a tipping point in supplier marketing.
“Essentially every major supplier followed with aggressive, expensive marketing campaigns that continue to this day that encourage travelers to book direct to get certain benefits,” Koetting said. “I think much of that marketing effort was really directed at travelers who might otherwise book at an OTA [for] leisure travel. But an unintended casualty of those marketing campaigns has been the managed corporate traveler, who may have been persuaded that in order to get the content that they want, the exclusive benefits that they want, they would need to book directly.”
There are other motivators. Tate pointed to alternative lodging services like Airbnb as an example of a category of suppliers that might not be available to use in a self-booking tool but that some travelers want to employ.
“The concept that we’re kind of all struggling and fighting for is, there’s all these great apps in the world, and millennial travelers don’t want to do corporate policy,” Tate said. “They want to do what they want to do, and then they love to be able to have access to unique and different travel experiences.”
Carrots and consequences
Travelers might want to do what they want to do, but that attitude in many corporate settings can be a career-limiting perspective, so to speak. Particularly in older-guard industries like finance and insurance, corporate policies generally aren’t suggestions; they’re expected to be followed, with consequences for noncompliance ranging to as dire as nonreimbursement of travel expenses.
“Is this concept acceptable in any other realm?” Tate asked. “If I’m unhappy with the PCs my company buys because I have a strong preference for Dell over HP, am I allowed to do that? Probably not. What makes travel different?”
Cracking heads over policy noncompliance, with mandates governing travel behavior and strict penalties for noncompliance, seems like an easy fix. But in reality, it is more complex, as Tate noted.
The corporate cultures at many companies, particularly in the technology sector, generally eschew mandates to avoid stifling creativity. Also, employees, particularly road warriors, might look at travel as less of a commodity and more of an experience, the quality and convenience of which directly impacts the success of the job they’re traveling to do.
‘We are trying to tease out of road warriors more about how can travel contribute to that good trip outcome, and the booking tool is just not a significant factor.’
And given the low unemployment rate in the U.S., vexing valuable employees with hard mandates concerning travel and booking might not be the wisest move.
David LeCompte, CEO of Short’s Travel Management, a Waterloo, Iowa-based TMC, said, “Most corporations [are] competing for talent now with low unemployment rates.” Stating that off-channel bookings aren’t a top-tier problem for most of his company’s corporate clients, he said, “I’m sure they don’t want to pressure too much. Our clients just haven’t. It’s not their top priority.”
It might seem unlikely that a heavy corporate hand on travel booking channels would drive a traveler to look for other employment, but Scott Gillespie, co-founder and managing partner of tClara, a travel analytics consultancy, said a 2016 survey of 757 U.S. road warriors that his firm conducted with ARC and American Express Global Business Travel showed that 83% agreed or strongly agreed that travel policy is as important as salary and responsibilities when considering a new job.
However, he also said that in upcoming, unreleased subsequent research, such travelers said they don’t consider the booking process a top driver of the success of a trip.
When policy mandates might not fit a company’s culture, another option is to incentivize travelers to comply. A handful of companies have set up internal incentive programs that award points for compliant in-channel bookings; those points can be accumulated and cashed in for rewards like airline class upgrades.
“I have heard very limited programs ever do this, but I’ve heard success with it,” Tate said. “Travelers are in it for ‘what’s in it for me.’ Well, that gives them a lot of things.”
Travel tech firm Rocketrip offers similar programs on a third-party basis, rewarding business travelers who book low-cost travel through designated channels.
A handful of companies, most notably Google, have addressed the issue by eliminating the notion of a preferred booking channel, instead offering travelers a certain amount of approved expenditure per trip based on the city visited with no restrictions on booking method but with itineraries forwarded to a central point. Tate said he did not see many companies following suit and doesn’t expect to.
It should be noted that there are sometimes good reasons for travelers to book outside their designated channels, for example, when attending a meeting that has a designated booking channel for discounted airfares and hotel rooms as part of a block.
However, the methods for addressing truly off-channel bookings aren’t solely found within corporate travel programs. A few tech companies have developed tools to capture the data and itineraries from program leakage they consider inevitable.
Travel tech giant SAP Concur earlier this decade launched what became its TripLink solution. Concur has partnered with several travel suppliers, including United Airlines, British Airways, AccorHotels, Marriott International, InterContinental Hotels Group, Omni Hotels & Resorts, Airbnb and Avis and Hertz Corp., among others.
When travelers book directly with one of these suppliers using their loyalty account, the company’s corporate discounts are automatically applied to the reservation, and details are funneled into Concur’s TripIt itinerary tool and sent to the company or a TMC.
Should travelers book a supplier with whom Concur has not partnered, they can send a TripIt itinerary to the appropriate point to ensure the details of their trip are captured.
“I think within the U.S., it’s taken the industry some time to acknowledge the true scope of invisible spend and out-of-channel spend,” Koetting said. “I know it’s taken the industry in the U.S. some time just to acknowledge that there is a large out-of-channel weakness in travel programs. And now travel managers are starting to evaluate and embrace solutions.”
Without providing details, Koetting said SAP Concur is “very pleased” with TripLink’s attachment rate with customers of its Concur travel and expense tools.
“We’ve made very good progress in terms of the number of clients who are purchasing it, the number of travelers who are using it and the number of participating suppliers,” he said.
Another tech firm, Traxo, has attacked the issue differently. Traxo can interface with corporate mail servers, and when an incoming email is detected from one of the many addresses that indicate a travel confirmation, the email is forwarded to Traxo. From there, Traxo can parse and collate travel data and send it in a variety of methods to the corporation or travel manager. This all happens without the traveler’s direct involvement.
“We believe just changing behavior is really, really hard,” said Traxo founder and CEO Andres Fabris. “So we said, ‘You know what? We know this leakage is occurring. We know that there’s a lot of appetite to see it, to at least detect it. We’re not going to try to change behavior, but we’ll try to create as many innovative, automated means of detecting this information without requiring the traveler to take any action,’ because the second you require them to hit a button, forward an email, download something, the adoption rate goes way down.”
‘We’re not going to try to change behavior, but we’ll try to create as many innovative, automated means of detecting traveler information.’
Fabris said he believes off-channel bookings are on the rise, due primarily to the rise of travel metasearch and suppliers’ direct marketing efforts.
“It’s occurring,” he said. “We take an agnostic view. We don’t encourage it. We don’t penalize it. We just recognize it’s happening, and we try to bring transparency to it.”
Other tech firms that can be associated with off-channel bookings include TripBam and Yapta, which search inventory to ensure that booked reservations are at the lowest price, and they can rebook automatically if lower rates are found. TripActions offers a travel search engine for business travelers that incorporates travel policy.
The TMC’s role
TMCs, of course, want to see as many corporate bookings as possible go through their channels. For Short’s Travel Management, helping that along will be an upcoming upgrade to the booking tool it offers its customers, with the goal of offering a more personalized, “traveler-centric” experience, LeCompte said. But it also means working to ensure its agents are delivering the value its customers want.
“Close to 70% of our transactions are still done through an agent,” LeCompte said. “We try to not create a call center mentality, and we try to do what people like, maybe even better than what they get in the consumer marketplace. If you call a big cellphone company or big cable company, you know, that experience isn’t always the best, especially when you’re trying to solve a problem.”
‘We try to do what people like, maybe even better than what they get in the consumer marketplace.’
The problem is not necessarily the speed of call pickup, either, he said.
“If my agent picked up a phone in 20 seconds and can’t help me, that is worthless,” he said. “Whereas, hey, I may wait for 40 seconds on the phone and he or she gets right to me. Or if I could email them and they respond in an hour, but with everything I want.”
For World Travel chief innovation officer Rock Blanco, technology is a key component of his TMC’s offering. In his case, it’s Traxo, which World Travel offers its clients.
“I think with human nature in general, if you give me an inch, then I want to try to go for a foot and a yard and a mile and keep going,” Blanco said of off-channel bookings. “And the next thing you know, [that attitude] starts hitting other areas within your company and other parts of your policy.”
‘If you give me an inch, then I want to try to go for a foot. And the next thing you know, that attitude starts hitting other areas within your company and other parts of your policy.’
For that reason, he said, “Let’s not bring [off-channel bookings] to the forefront. There’s so many other issues, from risk management to duty of care to general policy compliance; this is just one aspect of that. And if you then segment [those bookings] out, what can we do to ensure that we can at least grab what we need to be able to comply with the other parts of our policy?”