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RIP: the traditional corporate travel policy?

The traditional corporate travel policy is rapidly becoming defunct. In the first of two articles on this major upheaval in managed business travel, Stanley Slaughter looks at why this is happening

If anyone doubts that managed business travel is undergoing a major upheaval, there were two unmistakeable pointers at the Business Travel Show in London last week. In the excellent session Is Travel Policy Dead?, two of the four panellists announced that it was, at the very least, “dying”.

A more chilling and fundamental analysis came from Paul Tilstone, managing director of GBTA Europe and moderator of the session. Addressing the travel managers, he said: “Power is now in the hands of those you previously sought to control.”

That in essence sums up what is happening. In an incisive article on the subject, two US business travel experts Scott Gillespie and Evan Konwiser have spoken of a “major shift” in managed travel. More accurately it is a major shift of power.

In the past business travellers (the vast majority except for a handful of rogue travellers) have used the hotel, airline and car hire company booked for them by their employers through their TMC. But two aspects of this process are changing.

The first is the growing dissatisfaction of these preferred suppliers. These are selected on the back of deals which offer the company discounts in return for volume. These deals are becoming less attractive to the suppliers which feel the promised volumes are not being delivered consistently enough. This can be brushed aside by buyers when travel is at a low ebb and suppliers need the business but is far less welcome when volumes are increasing.

The second is that travellers are feeling increasingly uncomfortable in the straitjacket in which these often mandated policies trap them. New technology, such as smartphones, give travellers on the road more opportunity of finding out what flights, hotels are available. The social networks also help them communicate this to fellow travellers.

These networks are increasingly used to change itineraries, often without recourse to the travel manager. It is the younger travellers - the digital natives - those who have grown up using technology rather than the older generation who have adapted to it, who are leading this move away from adherence to traditional policy. For them using this technology is second nature and attempts to control it are becoming fruitless.

Travellers are consequently demanding a lot more freedom in how they travel and suppliers are ready to give it to them. Witness how airline or hotel advertising is now often aimed not at the company but at the individual flyer or guest. They concentrate on the extras - the little differences each offers in a bid to appeal to a travellers’ individual tastes. This has little to do with corporate deals and is more likely to undermine them.  

Travellers not only want this freedom but armed with smartphones and contacts on the social networks can go out and get it.

But this is not to advocate the end of managed travel. One of the speakers at the BTS session, April Bridgeman, senior vice president with BCD Travel made this point clearly. While stating that “travel policy is dying as we currently refer to it”, she said this offered a “greater opportunity to be more effective in how we manage travel for corporates”.  

The first and perhaps most obvious point about traditional travel policies is that they can be huge documents which needed slimming down. Rob Hughes, EMEA travel manager and expense programme manager for salesforce.com, told the BTS session that he was in the process of cutting his 24 page document down to nine pages and, eventually,  to one or two pages. “Travel policy is not dead,” he said, “but it is in need of an overhaul.”

Both Bridgeman and Hughes said that a lot of the information needed for travellers was available, often in better and more up to date form, from smartphones than in travel policy documents.  Hughes pushed the point home by claiming the importance of email would shrink as the use of social networking and smart phones increased.  

This is a different world from the one in which travel managers imposed what Hughes called a “command and control policy”. If the managers do not adjust and adapt to this, they do so “at their peril”, he warned.

But faced with what some used to mandating policy might see as a revolt – a huge rise in the number of ungovernable rogue travellers – what are they to do? The smart ones have already located their first move. But there are several other moves they can make as well.

Read the second part of this analysis by clicking here

 

 

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