Out-of-Policy Travel and its impact on your bottom line
Posted on October 31, 2014 by FCm Travel Solutions UK
According to a recent survey conducted by the Global Business Travel Association (GBTA), half of UK business travellers (52%) make a travel choice which does not follow their company’s stated policies.
This results in a significant impact on the cost of travel and also has the potential to undermine negotiated deals dependent on achieving targeted volume. Furthermore, future savings are at risk through diminishing an organisation’s ability to leverage volume to drive better rates in future.
There is also an additional impact on productivity with those who went out-of-policy reportedly spending more time making their reservations than those who followed policy.
The report goes on to break down out-of-policy bookings by travel type with some interesting findings:
- Business travellers are somewhat more likely to use the company preferred method of booking plane/train tickets than they are of using the preferred method of booking a hotel
- They are willing to go out-of-policy to stay the hotel of their preference. When costs are equal and the personal preference hotel is not on the company’s preferred list, more than half (56%) would go out-of-policy and choose their personal preference.
- Of travellers who go out-of-policy on flights, 71% would go out of policy to take a direct flight with a non-preferred provider. At a £30 cost increase half (47%) would still go out of policy and a quarter would still make the same choice with an £60 increase.
When staying at a hotel, business travellers go out-of-policy in a number of ways:
- Ordering room service – 24%
- Staying at a non-preferred hotel 13%
- Getting in-room entertainment 11%
- Staying an unnecessary extra night 10%
- Staying at a more expensive/higher-class hotel 8%
- 39% of these travellers state the choice is for personal reasons.
With business goals at risk, even marginal shifts in non-compliance can have a significant impact on your bottom line. Your FCm account manager will already be working with to analyse out-of-policy behaviour through exception and missed savings reports. While some companies choose to impose some method of disciplining non-compliance, more and more are working with us to firstly identify the reasons behind the behaviour and creating and implementing initiatives to foster a culture of support rather than ‘using a big stick’ to enforce policy.
There are two key areas where FCm can help you address the challenge of out-of-policy bookings:
- Are your travellers really clear on the benefits of policy compliance, not only to the company but to themselves?
- Putting in place strategies to bring to life the features and benefits of the travel product within your policy and even get them excited about it through site visits or supplier days.
If you are concerned about compliance and would like to discuss some alternative ways to cultivate more support from your travelling staff, call your Account Manager to discuss the options.