Most companies don’t insist that travelers hand over loyalty program points accrued during business travel. Philips Latin America outsourced regional business travel manager Fernão Loureiro discusses what he sees as a worrying trend in his home region and why companies should resist it.
In Latin America some colleagues are pushing their travel suppliers to create corporate fares and rates that exclude loyalty program point accrual. At the same time, there is an ongoing, unproductive and dangerous discussion about companies retaining their travelers’ points and/or asking employees to explain the benefits they get thanks to spending part of the company’s budget. If they retained points, travel programs would have to start managing them. What would be the ROI on the time invested in this activity? More importantly, withholding points from travelers or insisting on options that don’t include them isn’t good for employee morale and can sacrifice travel program savings.
A few years ago, when travel policies weren’t as strict about using the lowest available fares, some travelers made decisions partly based on maximizing the points they earned. Things changed. Companies cut costs (and benefits) to stay competitive. They tightened up travel policies and focused on compliance.
Travel management practices became more widespread. Nowadays, I’d bet that for domestic travel, lowest logical fares are mandatory in 90 percent of travel programs.
In parallel, airlines began to unbundle their products and charge for seat assignments, checked bags, inflight food and drink and much more. Today the traveler has to purchase many things apart from the base fare and the company pays. Even those expenses not authorized by policy usually are reimbursed. Let’s be honest, line managers almost never decline such claims.
The situation can be different when travelers have status. When airlines include ancillaries and add-ons for no added cost because of such status, the company saves.
That is why companies should view loyalty programs not as enemies of managed travel but as potential allies in controlling and reducing costs, and in recognizing the rigors of travel that employees endure.
Even when required to choose the lowest rate or stay within other policy parameters, if travelers accumulate points they can get upgrades and other perks without any incremental cost to the company. Especially when recruits ask about travel policies, and as organizations focus on talent retention, this can be a differentiator.
Furthermore, from a management perspective, why ask qualified and strategic travel managers to spend their time controlling points earned by travelers? What about the privacy concerns related to accessing someone else’s account? I see this as a non-starter, but many senior executives in this region are proposing exactly that to their travel managers.
Sometimes travelers are asked to sign letters authorizing their companies to use any individual loyalty points earned from traveling on company business. This letter can be used to sue the company after the employee leaves the company. In Latin America, legislation is protective of the employee, but many corporations run the risk. Letting travelers accrue loyalty program points keeps organizations on the right side of local regulations.
Don’t fight against points programs. Doing so risks unhappy travelers, leaves money on the table, forces travel managers into an uncomfortable role and may put the organization in legal jeopardy. Instead, embrace them to realize the many advantages.
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