Curbing Hotel Leakage: Strategies to Rein in Noncompliant Bookings

 

For corporate travel, compliance with well established policies is of utmost importance.

Yet this is a recurring problem organizations run into in the form of hotel leakage — employees booking outside the mandated travel program.

But what this practice does is actually undermine our negotiated rates and creates all types of risk to traveler safety and data integrity.​

Understanding Hotel Leakage

Hotel leakage is when a business traveller chooses to go round the approved route of booking and instead looks at booking somewhere they prefer or believe is a better deal.

Such actions can ruin the consistency and efficiency of corporate travel programs.​

Implications of Noncompliant Bookings

1. The financial consequences of departing from approved channels include not gaining the negotiated rate, and having higher travel costs.
2. Lack of Duty of Care: In the absence of travelers’ accommodations visibility, organizations cannot confirm they are safe and that they have adequate access to medical facilities in times of need
3. Noncompliant Bookings: The noncompliant bookings make the data incomplete which is causing the hindrance for accurate reporting and analysis.​
4. Reduced leverage in future negotiations due to the weakened negotiating power: this is as a result of fewer booking volumes that are booked through preferred suppliers.​

Reasons Behind Rogue Bookings

• Travelers believe that they are getting a better deal outside the corporate program.​
• Desire to accumulate personal loyalty points: Employees want to get loyalty points as often as possible which makes them book directly with hotels, because they want to accumulate personal loyalty points.​
• Some employees do not know what the existing travel policies are and the real reasons.
• User Experience: Travelers may use platforms that are user friendly if the company booking tools are clumsy.​

Strategies to Enhance Travel Policy Compliance

• Inform and Communicate: Provide frequent reminders to employees on the necessity of observing travel policy and advantages of utilizing consolidated channels.​
• Invest in Intuitive Booking Tools with Easy User Experience: Streamlining booking processes is essential in enhancing the user experience, and that in turn reduces the need to guess incorrect or ask questions about violating a rule.​
• Encourage Compliance Incentives: Reward or acknowledge the employees that are consistently following the travel policies.​
• Monitor and report on bookings and take action on non compliant behavior before it becomes a problem.​
• Engage Stakeholders: In this approach department heads are engaged and they are made aware about the significance of following policies at all their levels.​

Leveraging Technology

Hotel leakage is something that modern corporate travel management platforms can work to staunch.

Real time booking data, integrated approval workflows, and linked in a mobile format gives travelers the tools necessary to stay within policy.

Conclusion

To address hotel leakage, you need a clear, multi — faceted communication of the need to use these tools to your users correctly, and continual monitoring of their use.

Creating a compliance culture and leveraging technology will protect organizations’ travel programs, keep travelers safe and maximize expenses.