Companies have created, communicated and tried to enforce travel policies for a long time. Certainly a lot longer than most of the technology we use today for business travel has been around. However, even today, many of the company policies that are implemented resemble closely the types of policy ubiquitous in the past, telling travellers, in simple terms, what is “OK”. Examples include:
- Travel economy for continental trips, business for inter-continental.
- Book hotels under 120 euros per night
- Or sometimes just: Book as cheaply as possible.
Such rules have the advantage of simplicity but aren't nuanced enough to appropriately guide travellers buying behaviour in different contexts.
The way that travel product pricing works in today's marketplace is very dynamic. In the low season, hotel rooms in a city might be available for 60 euros, but a big conference in town can push up prices 3-fold as demand threatens to outstrip capacity. In this case a simple cap-rate policy isn't very helpful. When prices are cheap, travellers feel they should still book at the “policy level”, so the company misses out on the possible savings. When prices go up, users are forced to book non-compliant options, which triggers special approval processes, slowing everything down while explanations are sought, and generally causes everyone a headache.
Similar examples can also be found for transport booking. Changing the parameters of the search a bit, considering different times, near-by airports or levels of flexibility can have a massive impact on the ticket prices for both rail and air bookings.
The great news is that with some modern corporate travel booking platforms, such as Traveldoo, it doesn't to be this way. Progressively, more and more travel managers are taking advantage of a new type of “dynamic” policy rule. These allow the system to define, in real-time, which options returned by a search are displayed as compliant by comparing with the price of a “reference” fare found during the search. Examples of this new type of rulemaking might include.
- “Book any fare which is less than the cheapest direct flexible economy on our preferred supplier”
- “Book any hotel room which is within 20% of the cheapest in town”
- “Book the cheapest fare within 90 minutes of your ideal departure time”
This type of rule making gives the traveller choice, sometimes more than before. If they find a great deal on cheap restricted business class, they can go with that, or a hotel room they really want … as long as it's reasonable compared to what the company defines as the “reference”, it's open to them.
The value for the employer is confidence that travellers are making reasonable buying choices even as the market prices vary wildly from week to week and season to season.
The bottom line benefits to companies who implement this type of approach can be substantial. Across the board average ticket price drops of 10% are achievable for most companies with an averagely varied travel spend profile.
If you'd like to know more about taking advantage of some of the most advanced travel policy technology available please do reach out to any of us at Traveldoo. We will be happy to help you assess if it's something suitable for your company.