Data Dive: How 2021 Priorities Can Be Guided By Leakage Data

As the new year approaches, many companies face a policy dilemma: Should travel programs be mandated to eliminate out-of-program bookings in the name of safety and duty of care, or should organizations provide individuals even greater choice of where and how they book to accommodate for heightened travel anxiety?

For our latest Data Dive, Emburse Analytics Pro Travel unpacked the leakage data for a random sample of 13 global clients, all from companies of varying size and industry verticals. With the severe drop-off in travel and the rise of mandatory pre-trip approvals during 2020, this analysis focuses instead on 2019 data and what it can tell us about out-of-channel bookings. What emerged is a picture may not surprise some travel managers—it’s well-understood that hotel leakage is worse than air leakage—but that offers additional guidance on what could be prioritized in 2021 as companies decide where to tighten or loosen policy restrictions. 

On average, leakage accounted for 31% of spend across air, hotel and car – an average $11.3 million per company went toward out-of-channel travel purchases. As previously mentioned, the hotel category accounted for the greatest share of leakage spend, averaging 49.1%, with some companies seeing hotel leakage as high as 78.7%. That’s compared to air leakage, which averaged 9.5% and had a category high of 26.8%. 

For 2021, a major focus for most companies is traveler safety and confidence. It's difficult to provide this confidence if organizations don’t know where travelers are because they've booked outside of managed channels. Companies could mandate travelers always book through the TMC—which has typically been difficult to enforce but may change post-COVID. Or, they could still allow travelers flexibility by using other data methods to get a lock on traveler location.

From a cost perspective, hotel leakage problem is a longtime bugaboo of managed travel programs. The issue extends beyond how often out-of-channel bookings happen into the greater question of how much they ultimately cost. Remember, that 49.1% is the share of spend that goes toward hotel bookings that happen outside of managed channels. Looking at the per purchase difference between in-channel and out-of-channel hotel bookings, we see a variance of 58% per nightly purchase. That’s $99 on average per night. Comparatively, the same metric for air is 8% variance per ticket purchase equating to $46 per ticket on average. 

For companies considering the best place to crack down on out-of-channel purchases, the hotel category is the obvious target. Yet, that is also the category that has historically been the most difficult for organizations to rein in. 

While that reality may not be the most helpful to organizations facing tough policy conditions, they can at least take comfort that they’re not the only ones dealing with this problem. Emburse Analytics Pro Travel saw similar leakage levels regardless of company size or industry vertical. While a professional services firm may spend more on things like airline change fees, they are no more prone to out-of-channel bookings than, say, an oil and gas firm.