Managed vs unmanaged travel: which is right for your business?
The COVID-19 pandemic transformed the future of work for many businesses. With offices going hybrid or companies switching to remote first working models, much is still in flux.
However, one lesson remains clear — business travel isn’t going anywhere.
Despite our many tools for connecting and collaborating remotely, a vast number of industries still rely on regular travel to get personnel on-site for essential projects.
For every dollar spent on business travel, organizations reap an extra $12.50 in revenue.
Of course, that doesn’t mean it isn’t a major expense. Travel not only costs companies in the form of hotel reservations and airline tickets, but booking, tracking and reconciling employee travel can also require significant hours of labor from administrative employees whose time could be better spent on other tasks.
Businesses have a few options when it comes to making employee travel more cost-effective and efficient. Let’s go through the basics of managed vs unmanaged travel to help you decide which is the right corporate travel strategy for your business.
What is managed corporate travel?
With managed corporate travel, a business’s travel arrangements are handled by an external company. Everything from budgeting, logistics, booking, and even policy analysis is taken on by a travel management company.
What’s more, travel management companies have relationships within the business tourism industry, allowing them to negotiate rates and get the best deals possible. Considering the US is home to four of the world’s top 10 most expensive cities for corporate travel, it’s always good to find savings wherever possible.
What are the benefits of managed corporate travel?
There’s nothing better than a clear and efficient system. With managed corporate travel, all employee travel is arranged for them, ensuring that everything booked is within budget and adheres to company travel guidelines. Non-compliance is drastically reduced and the process is streamlined.
Travel management companies (TMC) are very much in the business of corporate travel. Even if a company hired its own dedicated travel manager, it can’t compare to the relationships and knowledge base that a TMC has.
Most TMCs offer on-call support and emergency assistance when required. If something goes awry, if you need to make a sudden change to plans or need urgent advice, there will always be someone on hand to help you.
The drawbacks of managed corporate travel
Despite its benefits, managed corporate travel is not the right choice for every company.
To be frank, managed travel programs can be expensive to operate. The additional cost of managed travel services may be offset for large companies with significant traveling workforces. But for many organizations, the benefits don’t outweigh the price.
The stats don’t lie: employees don’t always play by the rules when it comes to travel.
A recent survey found that 40% of managed business travelers don’t always comply with booking channel policies, and over half don’t always comply with hotel policies. Employees sometimes find TMC’s cumbersome to use, and therefore, try to forgo using them altogether.
While your business may be paying for the services of a TMC, it doesn’t always mean that employees will stick to their policies.
Ok, so what is unmanaged travel?
On the other side of the spectrum, we have unmanaged corporate travel –– sometimes called “open booking” or “self-booking” programs.
Employees are given more freedom in terms of choosing their airline carriers, hotels, and booking channels.
The benefits of unmanaged travel
An unmanaged corporate travel program offers a few benefits to consider.
An unmanaged travel program allows employees the freedom and autonomy to make their own bookings, and shape their itinerary however they like, which can provide a boost to employee satisfaction and morale.
Giving your staff the option of booking travel that suits their preferences will help them get the most enjoyment and comfort out of their trip. But, you have to consider your bottom line and process for payment and reconciliation as well.
Perceived ease of booking
When employees are given the opportunity to “do their own thing,” it sounds a lot easier. They can go through their preferred channels to make the bookings and plan their business trip.
What are the drawbacks of unmanaged corporate travel?
To fully understand how much you’re spending on travel and create reasonable travel policies, you need data. When booking on your own, you just don’t have access to the tools and data sets that can help you make informed decisions about the future of your corporate travel.
In an unmanaged program, it can be hard to consolidate data to ensure you’re putting your money in the right places.
Employee duty of care
You have a certain duty of care to your employees that must be considered at all times while they’re traveling for business. Unmanaged travel systems don’t offer a way to easily track the whereabouts of employees on the go to ensure their safety and know that you can locate them in case of an emergency.
Lack of discounts available
While common consumer booking sites love to tout their deals and specials, at the end of the day your employees won’t be saving much as possible when booking their own travel. Because those websites are designed for vacationers and personal travel, there is no incentive for hotel chains to offer the deep discounts that they make available for corporate accounts.
Find the common ground
If you’re looking for the benefits associated with a managed travel solution, but without the drawbacks, consider Hotel Engine — the perfect tool to bridge the gap between managed and unmanaged travel when it comes to lodging.
It provides a more affordable model of booking management for small and medium businesses, while still offering the robust array of reporting and analytics tools required for enterprise and government organizations.
Because businesses can establish travel policies and set limits on nightly spend, they can empower employees to book their own hotel rooms according to their preferences, while even earning their own rewards with top brands. That saves administrators time and makes travelers happier without jeopardizing the company’s travel budget.
And by crowdsourcing hotel demand among over 40,000 member organizations, Hotel Engine can offer access to the exclusive discounts that are typically reserved for the Fortune 500.
What’s the verdict: managed or unmanaged travel?
In many cases, unmanaged travel just isn’t viable. It’s difficult to manage data, employees, and rising costs of accommodation. Without a doubt, TMCs can simplify travel booking and management for these companies, but not every business has the budget (or the need) for an all-inclusive TMC membership and the ongoing fees.
For these businesses, Hotel Engine can bridge the gap between managed and unmanaged travel.
Sign up today for a free account, and access exclusive savings at more than 700,000 hotels worldwide.