What is unmanaged travel?
Unmanaged travel is a means of organizing business travel without a corporate travel policy. Also referred to as an open-booking policy, employees are responsible for booking their own trips and itineraries with no formal restrictions.
It is usually an option for small businesses and small-to-medium enterprises (SMEs) who have seen recent growth in their business travel and who aren’t ready or don’t want to invest in corporate travel management. However, the majority of companies use fixed corporate travel management as it is more regulated and provides useful analytics and reporting.
Advantages of unmanaged travel
Employees can form their own itineraries through their preferred booking tools, giving them more autonomy over their travel. Some employees find corporate travel management restrictive, especially when they have unpredictable traveling schedules.
When carefully organized, unmanaged travel can lower the up-front costs of hiring an external travel management company. It reduces costs down to only booking and travel expenses.
However, the discounted rates and strategy that travel management companies offer usually lead to bigger long-term corporate travel savings.
Disadvantages of unmanaged travel
Risk of non-compliance
Without a corporate travel policy, there is a risk of employees exceeding travel expenses or credit card budgets. This can lead to in-house conflicts after the trip, resulting in either loss for the company or punishment for the employee. With a corporate travel policy, potential conflicts are resolved before the trip, avoiding issues later. As business travel is one of a company’s highest expenses, it is a good idea to have a robust policy in place.
Corporate travel management companies generate analytics about corporate travel, which is much more difficult with unmanaged travel. This can lead to a lack of control and limits the ability to develop and streamline a company’s business travel.
Unmanaged travel can risk employee health and safety, as there is little visibility as to their whereabouts. Corporate travel management is centralized, making communication with employees much easier.
When is the best time to change from unmanaged travel to corporate travel management?
It is normal for a company that has recently begun business travel to use unmanaged travel in the beginning.
However, to seriously streamline travel, most businesses outsource their organization to corporate travel management companies. The expertise, discounts, and analytics often make it more cost-effective overall and make it easier to develop in the future.
In summary, as soon as a company sees corporate travel as a considerable expense, corporate travel management is a more practical option.