GBTA Planning A Better Study Of Rogue Behavior - Business Travel News

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GBTA Planning A Better Study Of Rogue Behavior

November 29, 2012 - 10:40 AM ET

By Jay Campbell

The Global Business Travel Association is planning to take a closer look at certain elements of a study it released in May partly because of concern that it gives the impression there's no savings in managing travel.

Based on a survey of 1,788 business travelers, the Global Business Traveler study found that while U.S. business travelers spend $2,740 on average per trip and stay 3.6 nights, "those under mandated programs spend more ($3,663) but stay a fewer number of nights (3.4), compared to those in unmanaged programs ($2,457, 3.9 nights)."

"Why bother," consultant Scott Gillespie has been asking, "if unmanaged travelers achieve better business trips, are more satisfied with their business travel—and here’s the kicker—don’t spend any more than their managed traveler counterparts?"

Gillespie and co-author Evan Konwiser have been speaking and writing about what they call Managed Travel 2.0, partly basing the rationale for a new, more "open" approach to managing travel on these GBTA results. However, GBTA Foundation vice president for research Joe Bates in an interview last month cautioned against drawing the conclusions that Gillespie and Konwiser have.

"In this study, we didn't control for certain types of programs with all the other variables at play," said Bates. "For instance, managed programs tend to have a higher proportion of international travel and average spend per trip for an international trip is many times higher than for a domestic trip. That's just one element that can very easily make those numbers come out higher."

Companies that were grouped into GBTA's "mandated" category tended to be much larger than those in the "unmanaged" category, but with regard to the average trip spend data, researchers "didn't control for the size of company," said Bates. "Smaller companies of course are typically less likely to have international travel and I think they tend to have slightly more restrictive policies. I'm very much generalizing here, but larger companies and multinationals are more likely to allow different classes of service, not just for air travel but hotel as well."

Gillespie isn't buying it: "It's not surprising GBTA would like to try to reinterpret the data or get answers it would rather have," he said. "The findings are fascinating in part because they are so inconsistent with everyone's belief system about managed travel being cost-effective."

He also wasn't swayed by the possibility that companies with managed programs—that tend to be bigger, and would then perhaps travel internationally more—might also tend to more frequently pay for premium classes.

"Whether they took a business-class or first-class or economy seat in my view doesn't matter for the purposes of drawing the conclusion that unmanaged travelers are more sensitive to their corporate budgets than managed travelers," said Gillespie. "Yes, you'll get a different answer if you control for cabin and quality of the hotel, but that's a different question. We're talking about how people manage their budgets and these unmanaged travelers are showing more cost-sensitivity than their managed counterparts. I'm presuming that, yes, they probably used a higher proportion of economy seats than the mandated travelers."

Bates said the study's sponsor, Concur, also was interested in supporting follow-up research to address this question more directly.

"We're talking exactly about this issue," said Bates. "Let's delve deeper into this subject matter to see if we can get more clarification. Are 'rogue' travelers truly saving their companies money or are there other costs associated with that? Is this business model evolving? It's entirely possible, but we want to delve further into that and make sure we're accurate. We need to control for various factors and understand what's going on. It's entirely possible that the ways travelers book and the way travel managers manage the program five years from now could be very different than it is today. Our job is to try to dig into those numbers a bit further and that's what we plan to do next year."

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