Adherence to corporate travel booking policies is slipping. At the same time, a younger workforce is advancing, while technology is enabling the sharing economy to proliferate – and enabling travelers to book itineraries across devices and platforms.
All of these trends are related, and are causing a headache for corporate travel managers, in more ways than one.
“More millennials are coming into the workforce and are self-sufficient. They have a smartphone in their pocket, they have 20 travel apps, they’re really comfortable booking travel on their own,” said Andres Fabris, founder and CEO of corporate travel technology company Traxo. “We see a bunch of trends that are all moving in the direction of providing employees more flexibility.”
That flexibility might make employees happier – but for travel managers and finance professionals, it means lost visibility into exactly how those employees are spending corporate cash.
“It’s our view that the percentage of off-channel bookings is increasing, and it’s a trend that will continue,” Fabris added.
The data backs up that view. Research from the GBTA Foundation and Concur, which was released late last year, found that nearly 40 percent of corporate travelers regularly book outside of official corporate booking channels, instead opting to book directly with travel suppliers.
“We’ve seen this evolve in the last few years,” Fabris said. “A couple of years ago, companies were saying that there is a bit of leakage, a bit of off-platform booking. And it’s been really interesting to watch over the last couple of years that it went from, ‘It’s small and we can put the cat back in the bag, and mandate use of these corporate booking tools,’ to: ‘Wow, this is accelerating, it’s happening faster than we thought, and we can’t see the data.'”
That data includes traveler itineraries and spend, the latter of which is often only captured via expense reporting after the trip is complete.
According to Traxo’s Matt Griffin, senior VP of product, corporate card programs aren’t able to address this challenge, either, because even if employees strictly adhere to use of the corporate card program, the data that is captured is limited.
“In the past, it might have been easy to quantify spend if everything was going through a single payment method, but now there are so many convenient options to pay, like Apple Pay,” he said. “It presents challenges. And credit card data alone, regardless of whether it’s [from a] personal or corporate credit card, is still missing a lot of key depth that level III data doesn’t capture.”
Traxo has found inspiration to address this challenge in an interesting source: the email spam filter.
The company recently announced the rollout of the Traxo FILTER solution, which Fabris explained acts like a spam filter, but instead of filtering spam, it filters all of the confirmations and other emails sent by travel suppliers into a single portal via integration with corporate email services. That information is funneled into a streamlined platform with information about employee travel, including the cost of a trip – which involves data beyond hotel rates. As the Traxo executives explained, understanding corporate travel spend must also consider such line items as valet and room service.
The new solution, added Fabris and Griffin, can certainly be used to simplify the expense reporting process for employees, while giving them free reign to book directly with travel suppliers.
But the benefits for the corporates themselves can go deeper, providing a real-time view of employee travel spend, the data necessary to analyze that spend and the information key to informed contract negotiations with travel suppliers.
“It puts companies [in] a stronger position, and gives them greater insight into what routes are important to them, what cities are important to them,” said Griffin. “It gives them better understanding about traveling employee behavior.”
“In supplier negotiations, they can have a consolidated view of travel spend and know where to focus, and ultimately negotiate deals that help drive down travel cost, which is one of the larger controllable cost categories,” added Fabris.
Considering the direction in which the corporate travel industry is headed, some of these trends beg the question: Are travel management companies and official travel booking channels even necessary at all?
Fabris and Griffin said yes – but, as with many corporate finance innovations, trends that change the way employees book their travel, and the way corporations gather data on those trips, also impose change on the strategic role of the travel management company.
“There are opportunities for travel management companies to become more sophisticated in procurement strategies, and [to] help companies understand all of this new data,” Griffin explained. “It can help organizations discover off-channel bookings data, and help companies analyze that, and introduce the data into travel procurement strategies and negotiations with strategic suppliers. It can help TMCs be more aggressive. This data is extremely valuable to help companies save in the long run.”