GBTA: Noncompliant Bookings Cost Companies Thousands Per Traveler Annually - Business Travel News

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GBTA: Noncompliant Bookings Cost Companies Thousands Per Traveler Annually

August 26, 2013 - 03:10 PM ET

By JoAnn DeLuna

U.S. business travelers who work for organizations with managed travel programs but book outside of policy on average spent $2,881 more per year than did "in-policy" travelers, according to a survey conducted by Rockbridge Associates for the Global Business Travel Association and Concur. The research was presented during an Aug. 22 webinar hosted by GBTA.

Rockbridge in January and February 2013 surveyed 2,415 business travelers and 342 travel managers in the United States, United Kingdom, Canada, France, Germany and Australia. Qualified business travelers had to be employed full-time at a company with at least 10 employees and a mandated or guideline-based travel program, and had to have taken at least one business trip of at least 50 miles in the prior three months and four business trips in the prior year.

The study defined "out-of-policy" travelers as those who "did not use the company's preferred reservations tool, chose a higher class or more expensive options that were out of policy for their company." Of the 869 U.S. business travelers surveyed, about 59 percent met this criteria for at least one major expense on their most recent trip, according to the presentation.

The study extrapolated the higher spending levels of these travelers—especially on hotels—across their average travel time during a full year to generate the $2,881 annual figure.

Out-of-policy travelers on their most recent trip spent an average of $232 more on lodging than did in-policy travelers, based on an average four-night stay, a full day longer than the average in-policy stay, according to the study. Per night, out-of-policy travelers on their most recent trip on average spent $210, $58 more than in-policy travelers. Extrapolated to a full year, this figure on average would total $2,877 more per out-of-policy traveler than the average in-policy traveler.

According to the survey, 14 percent of travelers who booked outside policy on their most recent trip stayed at luxury hotels, while 5 percent of in-policy travelers did so. Conversely, 33 percent of in-policy travelers stayed at what the GBTA presentation called economy hotels, "such as Courtyard or Hampton Inn," while 20 percent of out-of-policy travelers did so. 

Out-of-policy travelers on average spent $28 more on car rentals on their most recent trip than did in-policy travelers, which would average a total of $314 more per year, according to the research.

However, out-of-policy travelers estimated that they spent $2 less on air and/or rail tickets on their most recent trip than did in-policy travelers, or $26 less annually. Yet, out-of-policy travelers more frequently reserved premium-class seats (20 percent in first class and 48 percent in business class) than did their in-policy brethren (6 percent in first class and 26 percent in business class). Data was weighted to reflect similar proportions of domestic and international travel, according to the presentation. GBTA did not explain why in-policy travelers spent marginally more on air and rail tickets, but acknowledged that further research into the matter was needed.

"They're behaving almost the same in terms of cost implications," GBTA vice president of research Joe Bates said during the webinar.

Out-of-policy travelers tended to be "new recruits," "inexperienced travelers who want to share their adventures," and "enthusiastic travelers who take technology with them," according to the survey. 

According to the presentation, out-of-policy business travelers (58 percent) are more likely to use mobile apps "related to business travel when they are on the road" than in-policy travelers (37 percent). For this reason, GBTA recommended companies "focus efforts on younger, more tech-savvy travelers" who "are also more likely to use mobile apps for travel," while also looking for solutions that reduce travelers' booking time and increase convenience.

Bates said tech-savvy travelers are "also the ones who will tell their buddies, 'I have a new app.' They will help spread the word for the interesting solutions."

Last year, GBTA conducted a survey comparing companies with and without a corporate travel program. That research caused some concern because it suggested there were no savings in managing travel. Bates said this year's survey was "completely different" as it included only companies that managed travel programs.

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