So what are the differences between managed and unmanaged business travel?
Managed and unmanaged business travel can appear two worlds apart for travel managers. For some organisations, an unmanaged travel programme will work just fine, even as their travel needs evolve. But for many, there comes a time when moving to a managed approach just can’t be avoided.
The choice you make between these two options will form the foundation of your organisation’s business travel programme, so it’s worth taking some time to find out what to expect from each.
Managed Business Travel
Managed business travel is a programme that is run via a travel management company (TMC). Essentially, this means that an organisation’s travellers channel their bookings through the TMC’s online booking tool and are supported by their offline team. The organisation remunerates the TMC for its services either by a set management fee or by a transaction fee model.
Unmanaged Business Travel
Under an unmanaged business travel programme, organisations allow their business travellers to manage their own travel; booking however and wherever they wish. Bookers tend to arrange their travel through channels with which they are familiar, either from their business or personal experience, and claim it back on expenses.
So let’s see where the most substantial differences lie.
Cost – unmanaged travel
Unmanaged travel avoids the cost of a management fee paid to a TMC, but risks higher bookings rates as the organisation has no guarantee bookers are finding the best rates available.
It’s also worth bearing in mind unmanaged travel presents a time costs to users or to find, arrange and organise their travel bookings.
Cost – managed travel
Managed travel requires a set management fee, or a fee per transaction depending on the commercial model your TMC operates, which may vary for on and offline bookings. However, it is likely to offer savings in time spent searching for rates and in your overall travel spend through account management advice.
Choice – unmanaged travel
Ultimately the entire market is open to you, via any means you like, including direct contact with all of the various suppliers. However, having all options open to your bookers can be a curse as well as a blessing, as comparing prices across a plethora of websites often leads to bookers just booking the first option they find and not knowing who their point of contact is should they need support on the journey.
Choice – managed travel
Any modern TMC should offer an online booking tool with aggregated results in one place alongside your pre-set travel policy rules – meaning they won’t have to trawl through a never-ending list of supplier websites, looking for the best deal. TMC’s also have the upper hand when it comes to negotiated rates, securing the very best rates from travel suppliers, through their network of contacts, negotiating know-how and experience.
Control – unmanaged travel
The defining feature of an unmanaged programme is the lack of control; over where and how your users book and the consequent lack of management information (MI) you have on your travel. Even if you are able to match the level of MI a TMC can provide, making sense of the sheer volume of data and harnessing it to help improve your travel policy and reduce your travel spend is a major task.
Control – managed travel
One of the principal benefits of working with a TMC is the control over where your users are booking and the access you’ll have to detailed MI. From hotel group usage to duty of care information, you can get a great idea of what’s happening with your organisation’s travel from your TMC’s detailed reports. Your account manager can then help you use these to pinpoint areas where you can save money or improve traveller compliance.
t the end of the day, choosing between a managed and unmanaged travel programme will depend on your priorities. There’s a lot to be gained from a TMC but the individuality of every organisation and its travel needs means there is no one size fits all. Gather your stakeholders to understand the needs of your organisation so you can make a decision that suits you and your travellers.