Strange Bedfellows: The Odd Relationship Between Corporate Travel Policy and User Behavior

by | Mar 18, 2021

corporate travel policyI have been aggregating corporate travel survey data now for close to 20 years.  Primarily among multi-national organizations considered “mid to large market”, our client base covers virtually all industries with varying corporate cultures.  A central goal conducting these surveys is to balance senior management expectations in terms of the impact of policy change on user behavior against the likelihood of actually achieving said user behavior change.  In more clear terms, if we propose, for example, that we change corporate travel policy to disallow Business Class travel from the current 8 hour trip requirement to 10 hours for a $2 million cost savings it is important for us to understand if that policy change will be followed by the affected travelers.

This line of questioning has enabled us to provide a realistic return on investment because we know that in virtually all cases corporate travel policy is not followed as reliably as other areas of corporate policy not involving travel booking behavior.  While self-serving to some degree (because it makes us look smart) it’s also honest because we’ve doing this long enough to know that travel policy is almost never followed as closely as senior management may believe and therefore expectations should be tempered by a reality check.

Why Isn’t Corporate Travel Policy Always Followed?

Honest answer:  I don’t know.

My best guess:  Corporate travel professionals speculate that since corporate travel is so “personal” that it’s hard to force travelers into compliance.  I can buy that.  At least a portion of travel time is not on the company’s watch.  Traveler’s zeal for their own personal loyalty programs may also have something to do with issues around corporate travel compliance.  Lack of corporate communications may cause genuine ignorance around which airline to take, which hotel to book, or the phone number of the Travel Management Company (TMC) to use.  And today, employee retention plays a role in an organization’s willingness to hold a non-compliant traveler accountable (is it really worth making our employee mad over a hundred dollars?). Perhaps some, or all, of these factors play a role in traveler non-compliance.  I don’t really know the answer but I do know that it’s real and that most well managed corporate travel programs still suffer from 30-50% program non-compliance.  The result is a lot of lost financial opportunity and a failure in duty of care.

Program Compliance and User Behavior

For at least the past 20 years, compliance to a single TMC of record posed an “all or nothing” proposition.  If the traveler booked outside of the TMC, supplier deals and risk management fall apart.  TMC’s and clients both understand that better compliance results in better supplier deals and enables the TMC to better serve the client.  Yet, in the vast majority of cases user behavior modification efforts don’t provide a substantive difference even in the face of these realities.

Don’t take my word for it.  As the saying goes: “follow the money.”  Hundreds of millions of dollars in investments in the corporate travel space over the past several years should provide even the most skeptical with evidence that user behavior change is fraught with issues that might be swayed by a better mousetrap and that green pasture opportunity exists since less than 10% of our $1.6 trillion industry is formally managed today.  And no matter what legacy providers tout or new industry entrants advertise, no one is really expecting to gain 100% compliance by use of their tool, service, or product by driving user behavior change.  This is okay.  No one really needs to accomplish full compliance given the sheer size of the industry to find incredible success.  There is a lot of room for shiny new objects in the corporate travel industry and suppliers and the investment community know it.

Managing Generational User Behavior

It’s really simple to find all of the user behavior data you’d care to read about online regarding Millennials and the studies are all very consistent.  Gen X-er’s say Millennials are lazy, unmotivated, lacking in ambition, whiny, and other unsubstantiated observations that create a false narrative for a group that now comprises the majority of our corporate traveling population.  To the contrary, Millennials are now emerging as middle management, decision makers, and have provided the catalyst for the unprecedented investment made in our industry.  Despite what many of us believe, Millennials are efficient, demand flexible and user friendly technology, and love to travel.  They don’t follow corporate travel policy any better than Gen X-er’s who are typically considered more “corporate” and more “compliant” by nature.  My guess is that we will find in 20 years that they don’t really follow other corporate policies very well either because they don’t need that type of structure by their very nature in order to protect company funds while making smart business decisions.

But the Pandemic Has Changed Everything, Right?

I see neither empirical evidence to support this popular claim about the Pandemic nor any historical proof of watershed moments that increased traveler compliance.

Among CapTrav’s large market clients, even though we’ve seen tremendous drop off in corporate travel volume, we are not seeing better TMC compliance.  I have no reason to expect this will change and I’m not sure why anyone would expect otherwise.  TMC compliance is no longer an all or nothing proposition for program optimization.  As a result, technology options that can provide services like duty of care and omni-channel discounts without the user behavior requirement are viable alternatives to the norm because they mirror the strategic thinking of Millenials who are now making key business decisions.

What Does This Mean?

Lastly…The myriad options available that seek to expand what we consider managed travel to an under-served small to mid-market are very compelling and make the idea of strict compliance to our traditional model hard to believe.

As the tent expands to provide easier and smarter solutions for organizations of any size, I think exciting opportunity exists.  While we are seeing consolidation now among the old guard, our traditional supply chain will only get better and present a compelling management option.  At the same time, new technology and new ways of thinking will open the door to a vast audience of underserved organizations while challenging the norm.

What we know is that no matter how a company manages its program, there will be holes.  Once an organization has optimized what it has control over, how does it plug those holes?

Policy compliance doesn’t seem to be the answer.

captrav | corporate travel booking and compliance software
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.