The Travel Management Problems Posed By Direct Booking Growth

As major hotel companies expand their direct booking offerings to travelers (in an effort to compete with online travel agencies) and as more business travelers use these methods, travel managers are being forced to reckon with the effects this has on their programs.

A December 2016 study from the Global Business Travel Association (GBTA), “Travel Programs: Challenges, Priorities and Implication,” found that nearly two-thirds of managers surveyed allowed direct bookings at least sometimes. The prevalence of direct hotel booking by travelers is unlikely to abate anytime soon, as the report states, citing travelers’ preference for self-service booking practices. And that can lead to big problems.

Unmanaged direct hotel booking causes two main issues for travel managers: missed savings opportunities and lack of visibility into traveler safety. By circumventing the typical approved booking process, travelers would not receive previously negotiated supplier rates and amenities. Travelers who book directly with a supplier may unwittingly pay more for less.

Travel managers also lose spend visibility on these direct bookings, preventing them from referencing it during rate negotiations with suppliers. The more spend a company can demonstrate with a supplier, the greater volume discounts a travel manager can demand during negotiations.

The problems associated with unmanaged direct booking pale in comparison with the potential troubles associated with duty of care. According to the GBTA report, the vast majority of respondents said that when they need to locate travelers during a crisis, they are not able to do so when these travelers have booked their stays directly with hotel suppliers, creating a huge safety risk.

So how are travel managers responding? According to the report, travel managers are utilizing expense reporting data to gain more information about their travelers’ trips, though this does nothing to get rid of the duty of care complications posed by direct hotel booking. Additionally, respondents said that they were implementing automated data capture systems and other tools to make it simpler for travelers to share information about their directly booked stays. Though, this is a temporary fix that still doesn’t guarantee maximum savings during the booking process.

While managers are largely still searching for the ideal solution to accommodate travelers’ preferences as well as their own concerns and responsibilities, what’s clear is that advanced booking technology that maximizes savings and transparency is all the more necessary in today’s travel world.