Getting to grips with unmanaged travel costs

Seasoned business travel correspondent Stanley Slaughter discusses the future of unmanaged travel, and questions whether the battle of enforcing travel policy may have a greater impact than one might think.

One of the problems that has dogged travel managers for many years is: ‘How do we get our travellers to follow policy and therefore minimise unmanaged spend?’ Whenever one area seems to be closed off, another one opens. If cars are finally brought under control, what about taxis, or airport parking. Unbundling by many airlines has simply complicated the problem, and pushed it further away from a solution.

This unmanaged spend was addressed at the recent Business Travel and Meetings Show (BTMSBusiness Travel and Meetings Show (now the Business Travel Show)) in London when three industry figures, guided by Robert Daykin, managing director of Corporate Travel Partners and once a buyer for Halliburton, looked into how to unlock savings in unmanaged travel.

It was bad enough Chris Pouney, owner of Severnside Consulting, listing a whole range of areas where control could be much tighter. These included the use of corporate apartments, airport parking, telephony, excess baggage, the use or rather non-use of internal meeting rooms and foreign exchange. On this last, so often forgotten item, he pointed out that most travellers used the airport, the most expensive place possible, to conduct such business.

But what also loomed over this lively discussion was that travel managers may be fighting a battle they will eventually lose. Blame technology for this, as it is changing the way the industry does business and, more crucially, at a speed that many, perhaps most, of us will find bewildering.

At the BTMS discussion, Jon West, UK director for HRS, warned that unmanaged spend will continue to grow unless it is tackled. But he pointed out that the rise of facilities like Facebook was making that control more difficult to achieve.  More people, West said, were using this social network than Google to talk to friends about travel deals and opportunities.

“No one forced anyone to use Google or Facebook. We have decided for ourselves to use these services,” he said in a sentence that might concern hundreds of travel managers looking to keep a tight grip on spend.

He predicted this would increase and added a further warning: “If you are forcing your people to use a system they don’t like, you are promoting unmanaged travel.”  He said only about 5% of people are now not using the internet for some kind of travel booking, but twice as many (10%) are using their mobile phones for making reservations.

West is not the only one making this point. A week or so earlier, at the ITP (International Travel Partnership) conference in Jordan, Peter Dennis, founder of the Time Communications Group, said the use of mobile phones was increasing, as they become devices for payments as well as interactive communications. The use of mobile phones is predicted to increase by four or five times between 2011 and 2012, and then double that from 2012 to 2013, he said.

“Customers will communicate more and more with you on their mobile phones. Mobile phones are going to make a difference,” said Dennis. “Tweeting and blogging are also growing in power. You will need an effective internet strategy for your business. This is critical for younger people. It is all about the ability to think differently.” Dennis also cited Facebook as a forum where people, especially from the younger generation, share information and consequently know where the best value and the best deals are. This is not how it used to work, when the bulk of travellers would have their planes and hotels booked form them, according to company policy, by a travel management company.

More businesses have followed where Google, in its management of its own travellers, first stepped. The search company bowed to both the power and scope of the Internet, as well as the sheer familiarity and dexterity their younger travellers had in skipping around the various travel sites to find the deal that suited them. Google just provided a yearly budget to cover their employees’ travel costs. 

Many are still locked into the old model of a strictly defined travel policy rather than the Google model of a set amount to be spent as the traveller wishes. But how long will – or can – this last? Mobile phones look set to become the chosen device for travel, not just for keeping in touch but for booking, paying bills and changing itineraries.

If this is the case, it gives added weight to Robert Daykin’s remarks during the BTMS session: Will travel managers who close up the gaps on unmanaged spend be winning a battle, but not in the long term the war?

Put more starkly: Is the battle for mandated travel about to be lost?