If your company has a centralized tool for booking flights and accommodations, you may be surprised to learn how often employees circumvent the process. Organizations typically adopt corporate booking tools to leverage the best rates and ensure compliance with travel policies, but there’s almost always some “leakage,” or bookings that happen outside of it. This is attributed to many factors. Employees are used to booking travel right on their phones with consumer-friendly apps like Expedia and Airbnb, and they like getting perks and rewards when they book directly. It may also be that they aren’t aware that the corporate tools exist or what the company policies are.
Our 2023 Expense Management Survey, which gathered data and insights from 300+ U.S. finance leaders, indicated that the amount of leakage was roughly correlated to company size. Smaller and mid-sized companies—especially those with fewer than 500 employees, which typically have less-established policies and processes—reported higher leakage rates, occasionally exceeding 50 percent. Larger companies reported lower rates, but still experienced leakage to some degree.
Adding to the growing importance of adherence to a defined travel and entertainment policy is the increase in hybrid workforces. More than 50% of respondents now work in remote or hybrid environments, which have increased both the distribution of corporate card spending and the need for travel.
Getting a handle on leakage is important because getting more in-program spend means better visibility and control of expenses, enhanced safety and security for travelers, and a better negotiating position with travel providers for preferred pricing. And with nearly a third of the companies we surveyed spending more than $250K per year on business travel—and half expecting business travel to increase in the next 1-3 years—the bottom-line impact can be significant.
How to reduce booking leakage
Companies of all sizes can use these strategies to reduce leakage:
- Documenting and enforcing a written travel and expense policy
- Flagging out-of-policy spend to managers and finance
- Using a connected corporate card and expense management software to quickly identify travel spend outside the corporate booking tool so you can coach frequent violators
- Revisiting your policies and choosing tools that deliver a more modern user experience, more travel options, and better prices
Read more about Center’s best-in-class customer rating and recent accolades for usability and user satisfaction on G2. And if you’d like to find out more about how modern spend management tools can empower your team to do more, schedule a personalized demo today.