Anyone familiar with corporate travel knows that accurately measuring spend data is a challenging task. At times, it may seem as though the very act of trying to dig into travel spend data has a causal relationship on the results. Put simply, travel data tends to get messier the more you mess with it!
It is important to understand that in most cases the tools and technology we are using work perfectly fine for their intended purpose. However, many of the commonly used tools we use to measure corporate travel data sources were not necessarily created to help optimize a corporate travel program.
Managing Business Travel Is Worth the Effort
The ability to capture and report on total corporate travel spend is an important endeavor for many organizations. Business travel represents one of the largest discretionary/manageable spend categories in an organization. Business travel has a direct impact on sales efforts and can be a significant variable cost across an organization’s supply chain from sourcing to manufacturing to distribution. Understanding cost basis and return on travel investment translates to the overall success of an organization and is significant enough to accelerate or hinder a competitive advantage in virtually any industry. And it has become critically important to have real time business travel data so that companies can fulfill its safety and duty of care obligation it has to it travelers. In short, the effort to aggregate, measure, and use business travel spend is well worth it.
The best way to measure corporate travel purchases is through a Travel Management Company (TMC). But given that most studies show that 30-50% of corporate travel bookings occur outside of the approved TMC corporate travel professionals find themselves searching for ways to reconcile the disparity between TMC spend data and expense data. Comparing these data points typically yields a very high level view showing how much travel spend occurred outside of the approved TMC but usually not detailed enough to make actionable. Expense data is typically limited to inputs required for reimbursement and not comprehensive enough to present to a supplier for a better discount.
If expense data proves insufficient for corporate travel optimization, many business travel category managers will turn to corporate card data. But marrying card to TMC data can also pose a significant challenge particularly when it comes to normalizing supplier names and other data points. If you’ve ever seen a credit card statement where you can’t quite place a certain charge because of the way it shows up on the statement, then this observation may make sense. The challenge becomes even greater when trying to compare bookings made through an approved TMC with those booked “off-channel” through supplier websites, aggregators, or shared economy suppliers.
Finding Answers In Supplier Data
Where corporate card and expense data lack, we hope to find answers in the supplier data itself. But once again we run into problems. In the case of both airlines and hotels, supplier data is typically limited to only those bookings made through the TMC and provides no comparative booking data that would enable meaningful benchmarking or data points that can be leveraged to better position the client in supplier negotiations.
Utilizing these resources to cultivate elusive corporate travel data is not new. Enhanced corporate card data which can include more robust data elements can be purchased by the client in some cases, automated expense systems tied directly into corporate travel booking tools are positioned as a magic bullet for corporate travel programs, and even TMC’s have implemented third party solutions to bring in non-GDS content in order to ensure better compliance and a clearer picture of all travel spend no matter how the trip is booked.
Notwithstanding these efforts, when a traveler books outside of the approved TMC the likelihood of capturing data booked outside of the TMC and assembling it into something useful to help optimize a corporate travel program is very low indeed.
You Can’t Manage What You Can’t Measure
It is interesting that many industry professionals define their business travel programs as well managed despite all of the above mentioned and widely acknowledged problems. A spend category, no matter the category, is only well managed if the data points that enable optimization are available and leveraged. For corporate travel, optimization can only come as a result of aggregating data from all content sources that are utilized by business travelers within an organization. As the corporate travel landscape continues to evolve, we find evidence of more content fragmentation among suppliers and more consumer choice every day. The result is that the problem of data aggregation will become more difficult and optimally managing a program more elusive.