Harnessing rogue spending on corporate travel: reward the right behaviorNews / DistributionBy Viewpoints | March 4, 2014Share This article was originally published on There's been a lot of buzz recently in the world of corporate travel management. Studies show that more and more employees are "going rogue".Millennial workers spend more freely and travel spend is a costly line item. What does all this mean?NB: This is analysis by Daniel Ruch, founder and CEO of Rocketrip.While embracing change in the travel industry has become the new normal, adopting a completely ‘unmanaged’ travel policy can be fiscally irresponsible.After all, several major value-adds can be found in managed travel solutions: negotiated rates, duty of care, customer service, policy enforcement and data aggregation.Still, many companies are finding a more "open" approach to be more cost-effective and far more user-friendly.How can you tell if your company is ready to adopt "unmanaged" or "open booking" policies? As you think about the right way to manage (pun intended) your company’s travel policy, here are six key questions that will help evaluate options:1. Is there room to save on T&E?Travel spending is a pain point for many companies, but it doesn't have to be. Business travel can be incredibly expensive.That said, when given the right tools and incentives, employees can be recruited as partners in cost savings that results in enormous savings for you and your company.2. Do you have or want to have a strong company culture?I believe employees know best, and generally speaking, most of them want to do the right thing. If your employees care about the bottom line and tend to spend responsibly, then implementing an 'open booking' policy should be right in line with existing culture.If you trust your employees, it’s a no-brainer that you should allow them to find better deals on the open market.3. Do your employees deserve rewards?Do your employees already book the cheapest deal they can find? Do they really (read: really) treat your company funds like their own?If not there are ways to motivate them to save even more by implementing programs that reward them for 'beating' the budget and booking travel in advance. Think of it like sales team commissions, but in reverse.4. Do your employees have simple itineraries?If your employees tend not to have complicated itineraries with multiple legs and lots of last minute cancellations and changes, then an open booking model makes sense.For sophisticated itineraries requiring high levels of coordination, travel agents can serve a helpful purpose. By the way, managed travel pundits think changes and cancellations happen all the time. Our customer data sets have shown it happening only about 5% of the time.5. Do your employees prefer booking online?Your employees travel for personal reasons all the time. They have a favorite website, they’ve signed up for loyalty programs, or they simply love certain airlines, hotels or car rental agencies.They are really good purchasing cost effective travel. Most companies with managed travel programs struggle with employee "leakage" (non-compliance to the layperson) because employees prefer the open market and know they can find cheaper deals on their own, and they’re right.This is a function of how the travel industry operates. Unpublished fares – the really low rates priced to clear inventory that are offered on some sites and not others are almost never avaialble in corporate booking platforms.As long as businesses continue to mandate a single platform for ticketing fulfillment, they will always struggle with non-compliance, and it’s not because their employees aren’t cooperative, it’s because their employees are savvy.6. Do you want to track your spending data?Concerned about losing travel spend data with a more open system? There are external travel platforms that partner with expense management systems so all of your receipts can be sent to one place and your expenses managed effortlessly.Their dashboards provides analytics that will update you in real time with data on your total spend and related savings. They also track employee behavior so you can see who is staying under budget and who isn't.ConclusionsLet's face it, most business travelers appreciate freedom, flexibility and choice. Most importantly, they appreciate not having someone or something tell them what to book, where to book, and when to book.Most internal travel policies create friction, so minimizing policy is key for an effective modern travel management solution.Part of that solution will be to motivate and properly reward desired cost-saving behavior, so that the incidence of adverse behavior can be significantly reduced.In fact by allowing employees to share in the savings they generate through finding cost effective methods of travel, I think that company’s could reduce their travel cost by upwards of 20%.The concept of positive reinforcement is not new. However in the context of business travel, it is just beginning to emerge and I think will gain lots of traction in the coming months and years.NB: This is analysis by Daniel Ruch, founder and CEO of Rocketrip.NB2: Throwing money image via Shutterstock.