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How Leakage Affects Your Travel Program

Despite a travel management company’s (TMCs) daily efforts to create the best possible travel program for your business some bookings are still lost to leakage.

Sometimes travelers won’t book through your preferred channel or they’ll book their own choice of hotel over the internet. When this happens, gaps start to appear in your data and your reporting.

While many corporates with managed travel programs have mandated policies in place, leakage from loss of transactions through your preferred booking channels or supplier can cost your company significantly over the long term.

The Travel Landscape

Almost all corporate travel programs, no matter how large or small, will experience leakage at one point or other. With so many channels now available for travelers to book their flights, accommodation or car hire through, there is always the risk of non-compliant bookings.

At face value, airline or hotel websites can be appealing to a traveler with simple travel needs. There are the perceived benefits of convenience and simplicity, and of course, the perception of ‘lowest rates’. Employees may think they are doing the right thing for their company by bookings themselves if they spot a cheap deal. But by booking outside of policy, the overall cost consequence for a travel program can be significant if leakage is widespread among employees.

What are the Impacts?

Leakage affects the overall performance of your travel program in many ways starting right from the booking stage.

You’ll Pay More in the End

An in-policy booking consisting of flights, hotel and car hire made with FCm, would attract a single booking fee with your travel manager. However a traveler who books flights through FCm, books their own hotel over the internet and then calls a car hire company direct to organize a rental car would more than likely attract three different booking or service fees. And with online travel websites charging anywhere from $4 up to $30 per booking and some suppliers also charging service fees, corporates with leakage to non-preferred booking channels often face a higher fee structure than those customers using a single supplier as part of a consolidated TMC-managed travel program.

If you have booked over the internet and your travel plans change, you generally not only forego flights and room nights, but incur the cost of having to book and pay for them all over again. At the very least, you will probably have to pay penalty fees. And don’t forget the soft cost of your time spent trawling the Internet to find what you believe to be the best rates. Time is money and it all adds up.Book with a TMC or a TMC-provided online booking tool and there is less room for error. FCm has the ability to hold seats, which is generally not an option if you book via the Internet, itineraries are then audited by our consultants before your booking is confirmed and payment made.

There are also cost implications for your future hotel or airline negotiations. If your company has not met volume agreements with your preferred hotel supplier or airline, rate discounts may not be as forthcoming or generous in subsequent contract negotiations.

Visibility Decreases

If leakage is occurring because employees are booking through non-compliant channels (i.e. over the internet or direct with suppliers), spend data is more challenging to reconcile and use for big picture program analysis. It is far easier to control what you can see and capture. If you’re lacking insight into traveler records and spend patterns, your knowledge of your travel expenditure can be compromised.

Supplier Negotiations are Affected

The more knowledge you have of your data the more power you have to negotiate with suppliers for competitive deals. Suppliers look favorably on companies that not only have volume to offer but are able to prove loyalty to their preferred suppliers. If you’re experiencing 30 percent leakage on your hotel program, a company with a total of 11,000 room nights per annum is in effect negotiating a discount for only 7,700 room nights which would have a significant impact on your contracted rate deals.

Expense Reconciliation takes Longer

Bookings made through non-compliant channels mean your accounts department is spending more time manually chasing traveler receipts, itineraries and copies of either, as well as processing receipts from different suppliers. A consolidated travel program with a TMC provides enhanced data in a consolidated format.

Traveler Safety and Security Compromised

If you don’t have visibility into your traveler bookings, it can make it difficult to track where your employees are quickly. If 100 percent of your bookings are made via your TMC or a TMC provided online booking tool – you’ll have one point of contact in an emergency. Speed and efficiency are critical during a crisis so it’s essential you have a full understanding of where your employees are at all times.

Change Management

Enhancing the way you book travel, improving compliance, as well as your attitudes to travel will help mitigate booking leakage. There needs to be a common mindset, and educating employees is a crucial part of this. TMCs help you proactively inform your travelers and travel bookers regarding:

  • your travel policy and how it affects them
  • your company’s travel goals (e.g. What savings you are trying to achieve)
  • the benefits of your travel policy, both company-wide and for individuals
  • what non-compliance measures will be taken if people do not adhere to your policy
  • the savings (i.e. the ‘wins’) that are achieved as a result of compliant travel behavior. Keeping your people informed at all these levels is your key to productive and cost saving travel activity.

Control Leakage by Curbing Rogue Bookings

 Zero in on hotel Bookings

If leakage is occurring because travelers are booking hotels over the web as a last minute decision, ask your TMC if they have an online accommodation website your travelers can use, which offers integrated reporting. If leakage is occurring regularly in a particular city find out if there are broader issues such as inadequate accommodation standards or availability issues.

 Make it convenient

According to a Global Business Travel Association study, the most often-cited reason for not using approved channels was inconvenience (36%), followed by the hotel being a last-minute decision (30%). Almost as many out-of-policy travelers (25%) said booking through preferred hotel channels took too long.

 Keep an eye on key offenders

Pay close attention to new recruits (they may not be across company policy), tech savvy travelers (tendency to book over the web) and managers (who think they’re above company policy) to stem leakage problems.

Focus on technology

Utilize the latest technology for travel apps, online booking tools and expense reconciliation. This ensures your systems are quick and easy, which is what most travelers are looking for.

Have Passport, Will Travel: The Road to Radicalization

First of a Fictional Series on Radicalization

Eric was a bright young boy growing up in North London in the early nineties.  He loved school, especially math, and he of course was mad about football.  His bedroom was plastered with posters of his favorite Arsenal players, as well as with flags and other memorabilia with the official logo and colors of Premier League teams.  He had even been accepted into Eton College, the top caliber Windsor prep academy for boys and a key feeder school for some the UK’s most prestigious universities.  He was fluent in French and Spanish and was looking forward to enrolling in the Royal Navy.  Technically skilled, Eric was fascinated with positive and negative buoyancy theory and the complex calculations required to dive or surface the advanced submarines that are crucial to Britain’s sea prowess.

But a strange sequence of events began to unfold in the summer of 2004.  Eric’s father, Jonathan, left the family for another woman, withdrawing as well from his parental responsibilities.  His mother, Nada, made preparations to return to her native Morocco.  Out of money and with no means of support but for a meager subsidy from the Department of Work and Pensions, Nada bought a one-way ticket to Tangier for herself and Eric.

But Eric refused to go along.  He was born and brought up in England. This was home.  Having recently turned 18, he chose to stay with is uncle in London until he could save enough money to get a flat of his own.  He began working at his uncle’s restaurant, cutting and trimming goat and mutton and ensuring its slaughter and preparation were in accordance with the rules of halal, the dietary guidelines followed by observant Muslims.  He went to Friday prayers at the Finsbury Park Mosque in London and struck up friendships with other similarly situated young men.  He began to take part in proselytizing activities and broke off the relationship he had begun months earlier with his 20 year-old girl friend, Emma, citing as a reason her refusal to convert to Islam.

We last caught up with Eric after he arrived at Gatwick from Marrakesh last May.  He had been deported from the country by Moroccan authorities after his name appeared on a watch list provided by a European security service.  It seems Eric had been detained for questioning by security personnel in Yemen, after he was seen leaving the Al-Da’wah Centermadrassa.  The center is a known hotbed of Salafi extremism and was frequented by convicted terrorist Carlos Bledsoe, the Tennessee born radicalized Islamist who killed an army soldier and wounded another outside a Little Rock recruiting station in June of 2009.  Wanting nothing to do with someone they suspected of having ties to extremists, the secular government in Rabat promptly escorted him to the airport and supplied him with a ticket back to the UK.

Eric, who now calls himself Fawzan, vows to return to Yemen, stating that his experience there taught him just how corrupt Western governments and societies are.  He is devout in his practice of Islam but respects those who do not adhere to his faith.  He has however little tolerance for the moderate Sunni regimes in the Middle East and voices a deep-seated hatred of the Saudi House of Saad, the ruling family in Riyadh.  According to Fawzan, the regime is a stooge for the West, in particular of the United States.  It makes a mockery of Islam by claiming to uphold its values, while at the same time its throngs of wealthy royal family members travel to London and Disneyworld, where they carouse, drink alcohol and engage in out of wedlock relationships.  The quest for wealth and opulence, fed by seemingly endless oil revenue, must be eliminated from these societies, according to Fawzan, in order to avoid their ultimate destruction by non-believers.

Fawzan is not a violent person.  Twisting his prayer beads, he speaks in soft tones but is steadfast in his convictions.  He plans on sharing an apartment for a while in Chelsea with an Emirati student he met while working at his uncle’s restaurant.  The friend, Assaf, plans to travel to Somalia next year to see firsthand the atrocities the regime in Mogadishu has committed against its own people.  If he can save enough for the airfare, Fawzan can make the trip with him and a wealthy Kuwaiti who attends the Brixton Mosque in South London has offered to pick up his food and lodging expenses.  He is excited about this possibility and looks forward to relaying his experiences to us in a future meeting.


The above account is fictional but it is based on a compilation of stories from individuals who have experienced a similar trajectory.  It is a somewhat typical scenario of how Western youth, mainly males age 17-30, enter at first unknowingly into a radicalization process that often culminates in acts in support of terrorism, including attacks against the state.  Of course, there are many avenues to radicalization and not all such individuals will commit crimes or train with terrorist groups.  But it is worth noting that in general terms, the radicalization process takes place over time and is often not detected by authorities until it is too late.

Can Fawzan be saved?  Can he be convinced that he is being led by radicals who have no interest in him as a person or in his future?  The answer will vary from case to case.  What is certain is that Western governments have a monumental challenge on their hands.  No amount of intelligence collection and analysis or law enforcement activity can detect and disrupt each and every process once its takes hold and it certainly cannot begin to quantify the threat accurately.  The wide variation offered by intelligence agencies in the estimated number of Western youth training with ISIS in the Middle East is evidence of this intelligence gap.An in-depth understanding of the radicalization process, including deciphering who is at risk and why, may be the best first steps in beginning to deal with the phenomenon.  Only time will tell.

Part II