Compliance – Corporate Travel’s Ultimate Battle

by | May 8, 2020

My blog from March touched on it, CapTrav’s webinar series last month dove into it, and recent articles showcased industry experts coalescing around it – the pandemic has highlighted that corporate travel compliance is the most important topic in the industry today.

The Gist?

Corporate Travel is intrinsically tied to risk programs.  If you’re not booking all of your air, car, and hotel reservations through your travel agency of record, your risk management provider won’t be able to help those traveler’s who booked “off channel” in the event of an emergency, terrorist attack, or a pandemic.  Arguably, this is the single biggest problem that has ever faced corporations as it relates to travel programs and for many reasons.  First, the vast majority of corporate travel programs experience some amount of program “leakage” – most studies agree 10% or more in air and 35% or more (way more in many cases) with hotels.  Second, when corporate travel business owners consider how best to optimize their programs, leveraging supplier deals and discounts is the first area of consideration.  What better way to leverage a program than by utilizing existing spend that is impossible to capture?  So, the challenge is and has remained for decades – how do programs satisfy the legal and fiduciary responsibility it has to its travelers while leveraging spend?  The answer which seems painfully simple is compliance – compliance to corporate travel policy and by extension to the travel management company of record.  But like most things that seem easy, the devil is in the details.  Gaining corporate travel compliance has always been elusive and if you were able to review any of the above mentioned articles, blogs, and opinion pieces, it’s about to get much more elusive.

Corporate Travel Compliance Best Practices

For corporate travel compliance, consider the following:

  • Efforts around corporate travel compliance as an industry has never really worked. After 9/11, the Boston bombing, the Iceland Volcano eruption, and countless others, we’ve made no lasting progress to achieve long term program compliance.
  • Millennials now make up the largest section of our workforce and 75% of the workforce by 2030 – read any study and you will see that the traits and habits of this demographic fly in the face of corporate travel as we know it: they demand simple to use technology, stress ease of use, look for efficiency, are savvy shoppers. This list goes on and on and clearly suggests that they demand options that make sense to them.   Many of our legacy tools and technology don’t.
  • Top industries use corporate travel as a job perk to hire and retain talent – are we willing to push compliance so hard as to risk attrition among key corporate talent?
  • NDC is making it more likely that savvy shoppers will be rewarded for being savvy shoppers. This idea of supplier direct bookings is not new but the audience they are targeting (millennials) is emerging as our corporate leaders.  Suppliers understand that Millennials are fiercely brand loyal – if a supplier can engage a customer on its website successfully, chances are that same customer will book his next vacation through the same channel.  I’ve worked with dozens of suppliers in my career and without doubt they understand their audience.
  • $100’s of millions in investments can’t all be wrong. New tech entrants like Lola, TripActions, and dozens of others are being driven by investment professionals who understand the changing demographics in organizations, the sheer size of the corporate travel industry, and the opportunity posed by taking on legacy corporate travel process and technology.

To some varying degree, our industry has been thinking about the compliance issue for years.   We’ve built online booking tools, automated processes in the mid-office including quality control, developed best in class reporting platforms, payment solutions, fulfillment and customer service platforms, and have even dabbled in supplier direct bookings via GDS disintermediation a few times.  Expedia, Travelocity, and Orbitz all extended their leisure offerings to focus on corporate travel.  But ultimately, the myriad choices and loyalties travelers have at their fingertips makes driving corporate user behavior intimately tied to consumer driven choice.

Corporate Travel Purchasing

Corporate travel purchasing is the closest thing in an any organization that looks and feels almost as personal as it does professional.  And with the purchasing choices only expanding in tandem with a clear recognition among suppliers that they can draw users directly to their websites, the path to better compliance seems more unlikely than ever.

If the current trajectory holds, what can we do to drive compliance to ensure both duty of care and supplier optimization mandates are fulfilled?  This is the question we struggled with when developing CapTrav until we recognized that perhaps we were asking the wrong question.  The real question becomes, “how do we ensure that we are capturing all corporate travel data no matter the booking source so as to provide both duty of care and supplier leverage?”

As we re-positioned the central question, the answer became clear as did the methodology.  Today, our purchasing choices are virtually limitless.  We have a large contingent of workers who benefit greatly from the value added services their travel management companies offer, many who are brand loyal to certain suppliers and adept at using their websites, and some who are embracing newer travel options such as Airbnb and Uber.  Tracking our travelers to ensure safety and optimizing spend to ensure a competitive supply chain is the ultimate goal.  And if you think about it, if we can do that successfully, isn’t that the end-game anyway?

For the corporate travel industry, I think it’s time we viewed compliance as a double-edged sword.  If truly achieved, your company risks getting “cut” somewhere else – employee attrition, lack of purchasing choices, etc.  If not achieved, lost data equals lost opportunity and the wound caused comes in the form of lost opportunity and significant risk.

Perhaps we don’t necessarily need to stricken the word from our industry vocabulary but the time has come to recognize that compliance is neither realistic nor a panacea.

Brandon Strauss

Brandon Strauss

Co-Founder

Brandon’s career initially focused on supply chain management consulting for mid-market organizations.  Brandon was fortunate enough to get introduced to some senior executives at WorldTravel BTI (BCD Travel) and helped create and manage the first end-to-end self-service booking platform for the company and the first generation of such service in the industry.  Over the last 17 years Brandon has served as a Partner, head of consulting, and co-founder of KesselRun Corporate Travel Solutions, a leading corporate travel consultancy and in 2018 co-founded CapTrav where he currently serves as President of the company.

CapTrav is the market leader in comprehensive corporate travel data capture. Because we collect all corporate travel data no matter the booking source, your program enjoys the ability to better leverage supplier deals, make smart business and policy decisions, and track all travelers in the event of an emergency.