• Share on Facebook
  • Share on Twitter
  • Share on Linkedin
  • Share on Mail

Cancel Culture

By Mike Baker
Cancel Culture

Business trips are often planned, cancelled or adjusted at the last minute — can you prevent these changes from wreaking havoc on your company's finances?

If there’s one constant in corporate travel, it’s unpredictability. So many business trips are added, cancelled or changed at the last minute that it’s easy to see why the frustrations associated with business travel can lead frequent corporate travelers to hunt for another job

But it’s not just travelers who struggle with the frustrating vicissitudes of business travel. Finance professionals may have it even worse. The folks who are on the hook for budgeting and forecasting corporate travel spend often find their hard work goes out the window when travel plans change at the last minute, leaving a trail of unused tickets and exorbitant change fees in their wake. 

In fact, a recent study conducted by Lola.com reveals exactly how problematic these last-minute changes are from a travel-spend reporting standpoint. A whopping 73% of respondents said that their companies go over budget on travel because trips are booked or changed at the last minute. And we’re not talking peanuts either — these changes result in an average of $323 in additional costs any time a business trip is changed at the last minute. In some cases, these added expenses are simply the cost of doing business (travel), but more often than not, they can be minimized or altogether avoided through better travel management. 

Our research shows that the most problematic consequences of last-minute travel changes are caused by two main factors: airlines fees and travel agent fees. Let’s dive into the data behind those two buckets and see what growing businesses can do to counteract them. 

Avoiding airline fees

Airfare is, unsurprisingly, a huge expense for most companies. In fact, when we asked the finance leaders we surveyed to rank the number one factor causing their companies to go over budget on travel, airlines were the clear #1. 

But when we dug in deeper, we realized that it’s not just the fact that flights are costly, but also that they’re notoriously expensive to change. Among our respondents, 77% said that they go over budget on travel because of  costs they incur due to cancelling or changing flights. While many travel bookings are subject to cancellation fees, airlines are by far the most common: 83% of respondents said they regularly pay airline cancellation fees, significantly more than for any other type of cancellation. 

The sad truth is that, in many cases, there’s no avoiding these charges. Airlines don’t make a habit of refunding travelers if their plans change, and the closer you are to your departure date, the harder your case becomes.

But there are some things your company can do to limit exposure to airline change fees. 

  1. Avoid restrictive tickets. Travel enough and you quickly learn that not all plane tickets are equal. Some tickets, for example, are completely refundable. Sure, you’ll pay more for these tickets up front than for a standard fare, but not nearly as much as you would for changing a non-refundable ticket. If you know that a particular client meeting or event is likely to change at the last minute, consider paying a little more at the time of purchase to secure some flexibility in the ticket.

    But there’s even more nuance than just refundable vs. non-refundable fares. Some classes of fares and airlines themselves offer different levels of flexibility on their tickets. Basic economy fares, for example, offer almost zero in terms of flexibility. More often than not, changing a basic economy ticket is not a matter of paying a change fee, it means buying a new ticket altogether.
  2. Track unused credits. When flights are changed at the last minute (especially for reasons outside the traveler’s control), airlines will often offer travel credits. This is good news for finance teams because it means that those funds aren’t simply lost. The bad news is that these credits are relatively inflexible and user-unfriendly. They have expiration dates (typically a year), location limitations and, most crucially, they can only be used by the original passenger.
    For these reasons, many corporate travel credits go unused. Whether it’s because travelers don’t notify their companies when they receive credits, or because finance teams don’t have an effective system for tracking or accessing these credits, the simple truth is that these credits are not as valuable as they seem at first blush. In fact, 52% of respondents admitted that they don’t keep track of reimbursed flights, with 28% saying they don’t know when or if travelers receive reimbursements, and 23% saying they don’t even know what happens to these credits. Simply storing these unused travel credits in an easily accessible central repository can help companies get the most out of them. 

But paying change fees to airlines is only half of the equation when it comes to minimizing the costs of changing travel plans. The other aspect is what you pay to corporate travel agents and TMCs when you need to re-book or get support in the 11th hour. 

Booking Freeze

Thirty-eight percent of the finance leaders we surveyed said that they are charged — either by a corporate travel agent or their TMC – any time they book, re-book or make changes to an itinerary. These fees are applied not only when a traveler needs to completely change a reservation, but for any change they need to make — from switching a seat to bumping a hotel reservation up a night. 

These change-based charges add up quickly, but what’s worse is that they make it all but impossible for finance teams to accurately forecast fees, or even report on them at all. It’s hard enough for finance teams to predict how much the company will spend on actual travel costs, let alone trying to estimate booking, change and support fees. When you have dozens or hundreds of travelers, these costs can easily be the difference between hitting and missing T&E budgets. 

Unsurprisingly, with all this variability, finance professionals are not very confident in their ability to forecast their company’s travel spend. According to our study, 72% of respondents said they wished they were more confident in their travel-spend forecast. What’s worse, a full 50% of them said not only were they not confident in their forecasts, they knew for a fact their forecasts were often wrong. 

Finance teams need to be able to accurately track and forecast their companies’ travel spend, and the unpredictability brought on by change fees and booking fees makes this extremely difficult. Being more strategic and informed about ticket refundability as well as reducing the amount your company pays in travel agent fees are good ways to tackle this problem. 


posted by

Mike Baker

Mike is Director of Marketing for Lola.com and a former journalist, farmer and teacher.

better corporate travel starts here.