Compliance on the agenda

The first joint survey between Argate Meridian (AMG) and the Institute of Travel Management (ITM), consisting of a panel of 80 Corporate Travel Buyers, with a combined travel spend of over £800m, has found that as many as a third of business trips are being made outside of company policy.

10% of business trips are being booked outside the preferred Travel or Online Booking Agent altogether, while a further 10% of trips, although using the official channels, are not using the company’s approved airlines or hotel chains.

At the upper end of the scale 15-30% of travellers are simply doing their own thing.

This level of non-compliance affects 14% of corporates spending less then £1m a year, but affects twice as many with a travel spend over £20m.

What's the impact?

The underlying impact of the independent traveller is that, non-compliance travel may well rise to a level where it begins to affect the corporation’s ability to deliver on those volume traffic deals it has painstakingly negotiated with the airlines and hotel chains.

The key drivers for traveller non-compliance are shown to be:

Internet access and choice (97%)
Airline and Hotel Loyalty Programmes (92%)
Increased Traveller Awareness of alternative routes and consumer products. (90%)

Other factors include an unwillingness on the part of some travellers or PAs to pay the Travel Management Companies transaction fees and instances where the individual travel consultant at the end of the phone allows an out of policy booking in order to please/satisfy the more senior traveller.

To combat this problem 40% of corporate buyers surveyed now have access to Pre-Trip reporting to identify those rogue itineraries before the trip actually takes place. Many of those surveyed also now have real time web-based access to this information instead of having to rely on their Travel Management Company or colleague to produce a report for them.

Those in charge of procuring and managing travel see booker education and communication as the key to increasing compliance rather than enforcing adherence by penalising either the traveller or the budget holder.

Interestingly, the level of service or perceived level of service provided by the prescribed Travel Management Company appears to have very little impact on an individual’s propensity to book outside of policy or to go it alone.
Maybe some travelling execs are just born with a rebellious streak or maybe they believe that that entrepreneurial flair which has seen them scale the corporate ladder within their own organisations should be applied equally when procuring supporting travel services?

A key issue for corporate buyers is their ability to calculate the optimum level of compliance their organisation can expect from its travel policy. There must be a point beyond which any degree of further mandating or policing of a policy will fail to deliver any further incremental ROI? In this scenario, maybe it would be much better to focus on maximising the buying potential of the 80 or 90 percent of travellers who are in policy as opposed to spending fruitless time chasing those repeat offenders?

Buyers are spending less than 10% of their working week managing compliance, but this looks set to rise during the coming year.
This may well reflect a belief that, as travellers become more used to working their way around both the prescribed self booking tools and the internet travel in general, it is quite possible that booker delinquency could increase further.

Copyright AMG Limited