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Cheaper Can Be Costly for Business Travel Programs

By Jeanne Hopkins
Cheaper Can Be Costly for Business Travel Programs

Travel managers often feel the pressure to cut travel costs — but what are you sacrificing (and paying for later) with stingy business travel? 

Every business wants to cut travel costs. But, it’s what you don’t get – not what you don’t pay – that makes basic economy bad news for business travelers. That’s just as true when booking hotel rooms as it is when booking flights. As your company’s travel manager, you have to consider the whole picture to determine what’s best for your travel program because, all too often, cheaper can be costly.

With the introduction of the Expedia Affiliate Network (now called Expedia Partner Solutions, or EAS), there was a lot of hoopla about simplifying the booking process while extending access to a broader range of hotel properties as well as car rental agencies, online booking sites, etc. But EAS isn’t alone. The travel marketplace has seen a proliferation of affiliate networks in the last couple of years.

It’s easy to understand why business travelers might be tempted to choose one of these aggregated resources to book work-related travel. If corporate travel policies are focused too sharply on lowest cost, travelers may have little to no flexibility in choosing accommodations that enable them to be comfortable and productive. An option like EAS, with its combination of budget-priced rates and lots of choices, seems like a really great alternative.

Their employers may agree, because every company is concerned about containing overall travel spend. If EAS can help do that, more power to them!

However, in many cases, when employees book through EAS they are booking outside the company’s official policy. They may even be doing that for reasons beyond price and choice. Travelers frequently sidestep corporate travel guidelines because the company’s own booking tool is not user-friendly. These systems are supposed to facilitate and streamline in-policy booking, but if they’re not simple and easy to use, employees will simply pick up their phone or open their laptop to shop for options elsewhere.

The hidden cost of “cheaper”

EAS rates can be attractive, even truly great deals on occasion. But, there are trade-offs. On the up side, this system allows for paying now, rather than just guaranteeing the room and then paying upon arrival. For managed travel, this can be a benefit if you don't want your travelers to have to use their own credit card to guarantee and then pay for a hotel room. Instead, they can pay upon booking with the company card and get the EAS rate.

However, although the price may be a bit discounted, it will also be more restrictive. For example, EAS tickets are often non-refundable or come with only limited cancellation flexibility.

Also, your travelers will not receive the vendor loyalty points they would otherwise earn. In fact, loyalty information is not even captured or passed through to the hotel when making an EAS reservation. So even if your traveler is overly concerned about getting their points, they also won't receive the benefits of their “loyal” status when they arrive. The worst part is that most travelers don’t even realize this is happening.

Here’s an example. Let’s say your employee is a Hilton Diamond member. Their profile indicates they like a corner, non-smoking room and they are in the top 1% of Hilton travelers with this brand. Nonetheless, because they booked an EAS rate, the hotel won't even know their status when they arrive — unless they stay at that property so often the desk agent actually recognizes their face or name.

The travel industry has recognized the gravity of this problem for travelers. To ease the pain of losing vendor loyalty rewards (and to attract more bookings), an increasing number of online booking agencies now offer their own loyalty programs.

So, EAS booking may be the better option for your company because you will save with lower rates. But that will come at a cost – potentially irritating your traveling employees and denigrating their experience. Is it worth that risk? Maybe so, under the right circumstances, but surely not as standard travel policy for any business that cares about the personal side of business travel as well as the financial impact.

Lola says, “You can have it both ways!”

When your company adopts Lola.com as your corporate travel management platform, you can save money and be sure your travelers won't be "forgotten." Both employees and the company have the option to find the best rates for everyone, based on traveler preferences and trip-specific needs:

  • Do you need to have the company pay for your room? Well, Lola has access to EAS rates and you can pay for your hotel immediately.
  • Do you travel frequently and want to earn your loyalty points? Well, then, you can book a GDS (Global Distribution System) hotel rate for an option that is eligible for loyalty points.
  • Do you need flexibility because your meeting date may change? You can filter to find a refundable room (typically a GDS rate).

The bottom line? Budget-friendly corporate travel that is simple, easy, flexible and allows you to control costs without sacrificing the comfort of the employees out there on the road building your business.


posted by

Jeanne Hopkins

better corporate travel starts here.