Darryl McGarvey is director of channel development at SAP Concur
Employees today have the world in the palm of their hands. In some ways this makes the travel manager’s job easier but it can also make it more complicated.
One of the most controversial topics for travel managers over the years has been supplier direct bookings (SDBs), also known variously as open booking, invisible spend, leakage, out of system bookings, non-compliant spend etc.
Whatever you call it, it’s when employees make bookings directly with suppliers or through online travel agencies that are not visible until they suddenly appear on expense claims for reimbursement.
It's a big problem for corporates who have negotiated corporate rates and perks contingent on delivering a certain volume of business. Not only that, such bookings also present a duty of care challenge in that a traveller’s location cannot necessarily be traced if their reservations aren’t made through preferred channels.
Before the Covid-19 pandemic we saw increasing numbers of suppliers enticing business travellers to book directly to secure low-price guarantees as they simultaneously applied extra fees for reservations made through other channels. Travellers often thought they were acting in their company’s best interests. Post-pandemic, the trend does not look like slowing. The industry is transitioning from B2B to B2T – business to traveller.
So what’s driving the rise in direct bookings?
Survey after survey is suggesting flexibility and freedom of choice are increasingly important to business travellers. They want to travel and to stay with the suppliers with whom they feel most comfortable.
Many employees have become accustomed to much more flexible, remote working policies over the last two years and now they expect this flexibility to extend to travel policies too.
Employees can now also demand more from their company’s commitment to environmental and social sustainability, and will be within their right to question the trips they are taking: could this conversation be had on zoom instead? Is this the most sustainable option?
The efforts of suppliers to grow direct bookings is contributing to this trend too. Essentially, companies – especially hotels – are making concerted efforts to cut out middlemen by offering those discounts for direct bookings.
This relates to the other factor encouraging the rise in direct bookings, which is the simple matter of ease and convenience. Employees are busy people with packed schedules who would generally prefer booking travel in a way that’s easiest for them. Work or personal mobile devices give employees greater access to suppliers and mobile self-service tools means that employers can book their travel with the click of a button.
Finally, going forward, personalisation will be the number one priority before cost and even over supplier relationships. Alongside the increased desire for flexibility, travellers also now expect their individual travel needs to be met.
If an employee doesn’t feel their corporate booking tool delivers personalisation they may well be more inclined to book directly with suppliers so they can narrow their choices based on company-specific requirements as well as personal preferences.
Taking back control
Aside from mandating preferred booking channels or withholding expense claims for bookings made with non-preferred partners, travel managers have few options for clamping down on direct bookings.
Instead, corporates should be re-thinking their policies to find new ways to increase flexibility and account for the needs and preferences of travellers who are bypassing traditional channels.
Managers must champion transparency and bring direct bookings into view by including them in travel programmes. Today, around 80 per cent of travel programmes do not use technology to capture direct bookings, showing that current methods are not keeping up with this growing trend.
Technology can play a vital role in providing the end-to-end transparency that travel managers need moving forward. Applications can automatically capture direct bookings so that managers can keep track of where business travellers are going and what they're spending, regardless of how they book their trips. This gives managers the ability to keep track of ‘out-of-view’ expenses and thus increase policy compliance, improve duty of care and increase savings.
By utilising these tools, travel managers can see what travellers are doing pre-trip, during their trip and-post travel, and can take corrective actions as necessary. Taking control of direct bookings is key to paving a pathway to travel programme compliance.
The key to managing direct bookings in our post-Covid world is all about obtaining "true transparency" for all bookings taking place across a travel programme, irrespective of the source.
Direct bookings are not a sign of the failure of a travel programme, but more so the reality of trust and empowerment in one's travel community. Mangers need to embrace employees’ desire for flexibility, personalisation and convenience, and use technology to ensure visibility of all bookings, no matter how they’re made.