Strictly defined, corporate travel leakage is any air, car, or hotel booking that a traveler makes outside of corporate policy. Typically, corporate travel leakage refers to a traveler who does not book through his company’s Travel Management Company (TMC).
Even in the most well-run corporate travel programs, industry experts across every supplier type generally agree that corporate travel leakage represents the most significant and enduring management issue facing corporate travel business owners within organizations. Seems odd in a way – after conducting scores of corporate policy surveys among employees over a 20 year career, I have found that employees generally follow corporate policy for just about every other corporate task. But not travel. On the face of it, travel is personal. People travel for pleasure – they have frequent flyer points, hotel preferences, and other supplier loyalties.
To understand corporate travel leakage, the business owner must first understand why travelers don’t follow policy. Most importantly, it should be understood that the vast majority are not trying to be dishonest in any way:
- I can find it cheaper on my own so why would I pay the travel agency to book my ticket?
- The agency didn’t give me good options
- The technology the agency provides is clunky, hard to use
- The agent I speak with is rude to me
- It’s just easier to do it on my own
- We have a travel policy?
Industry studies have shown that most traditionally run corporate travel programs experience between 30-50% program leakage with most coming from hotels followed by air. Capturing corporate travel leakage data has, for decades, been an enormous challenge. First, most corporate travel programs seek to curb leakage through policy enforcement with the idea being that the best way to capture leakage is to stop it. But, without a strict “no reimbursement” policy in place, attaining 100% compliance tends to be a fool’s errand. In most cases, corporate travel business owners seek senior management approval for a strict but fair policy backed up with data that demonstrates the value of the program. Capturing leakage, however, has proven difficult and yet it’s very important. Consider that most industry experts also agree that a well managed program optimized with preferred supplier deals can yield 20% savings across all air, car, and hotel expenditures. So, in addition to the significant duty of care risk that comes as a result of not being able to track travelers in the event of an emergency, leakage leaves a significant amount of money on the table from a leverage stand point.
Industry efforts to capture leakage have met with varying success.
Third party data aggregation companies have positioned tools that marry expense, travel, and credit card data in an effort to provide companies a full picture of their corporate travel spend. While this approach can work, it is highly dependent on the integrity of the data being captured. In terms of corporate travel data, it is critically important to capture corporate travel related information and not just cost. City pair data, ticket numbers, accurate hotel names, and more are not necessarily data captured in expense or credit card data. The result can be as messy as not having the data at all and, at minimum, can take hours to sort through.
Other solutions aimed at capturing corporate travel leakage are expense focused. The solutions automate the expense reimbursement process while providing booking source and travel data. Once again, these solutions can work but since they are focused on satisfying expense reporting, they tend to lack the necessary information to marry with traditional corporate travel data.
CapTrav was developed to address corporate travel leakage. Our solution is easy to implement, simple to use, and provides 100% normalized data to corporate travel business owners. We capture data that is important to corporate travel program optimization so that our clients can use this data for reporting, supplier leverage, and even to help with compliance. As importantly, since all of the data we capture is benchmarked against the best available resources in the world, we can help create a business justification for booking behavior and driving company best practices.