Business

New research: The cost of loyalty in business travel

84 per cent of Australian business travellers believe earning personal loyalty points or rewards is a good reason to book outside of company policy, according to a new survey commissioned by American Express Global Business Travel (GBT).

With airlines and hotels offering a range of personal incentives for continued loyalty, it appears that personal rewards provide sufficient justification for some employees to ignore standard company policies.

While a large majority of business travellers from Australia acknowledge the value of travelling for work, and are aware their company has a travel policy, many are reluctant to comply with company travel policies citing issues including wanting business lounge access (82 per cent), using preferred airlines not within current policy (77 per cent) and desire to stay in a safer location (91 per cent).

Desiring accommodation closer to a meeting or business event venue (94 per cent), saving the company money (92 per cent), and minimising any negative impact to personal health and wellbeing (92 per cent) were the top reasons Australian business travellers provided as a rationale for booking outside the company travel policy.

Jo Sully, GBT’s Vice-President & General Manager, Australia & South Asia, said companies need to ensure their policies align with business realities.

“Australian business travellers have plenty of reasons for wanting to book outside of company rules, and these reasons can vary greatly in their appropriateness,” Sully said.

“There are instances where a business case can be made for booking outside of policy, such as for safety reasons or staying closer to a meeting or business event venue.”

“However, eighty-nine per cent of Australian business travellers believe wishing to stay in a better quality hotel is a good reason for booking outside policy, and that one may be harder to justify.”

“Businesses need to ensure their travel policies cover the most suitable airlines and hotels. Offering a wide variety of appropriate options will help encourage employees to book within policy.”

“Automated travel approval technology can also help persuade employees to make the right decisions.”

Interestingly, 92 per cent of Australian business travellers also considered saving their company money to be a good reason for booking outside of policy, however, such practices do not always result in true savings.

“Being able to track and measure business travel enables companies to negotiate favourable airline and hotel rates, as well as extras including meals and internet,” said Sully.

“When employees book outside of company policy, this travel is not tracked, and can affect the overall negotiating power of the company during their next contract review.”

What’s in it for me?

The survey also revealed Australian businesses are more likely to find themselves saving money on their travel expenditure through incentivising staff.

A mere 15 per cent of Australian business travellers stated that they do not require any incentives to book within their existing company policy.

Personally earning a percentage of the money saved (41 per cent), receiving bonus days off (40 per cent), and internal company points systems that can go towards rewards or future travel (40 per cent), were the top three options that Australian business traveller believed would increase their likelihood of booking within policy.

“While companies would like to believe that saving the business money would be enough of an incentive for employees to book within policy, the reality in Australia is that if you sweeten the deal, you’re far more likely to see a considerable increase in how many people stick to company rules,” said Sully.

In addition to incentives, clear and regular communication of company travel policies can also assist in policy adherence, with 46 percent of Australian business travellers believing their company does not have clear policies relating to business travel and expense reporting.

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