During decent economic conditions, traveler satisfaction is big in travel management circles. Everyone wants happy, healthy and productive employees, and many see that translating to improved corporate performance. Tripbam founder and CEO Steve Reynolds takes a contrarian view. He argues that it’s impossible to measure the return from giving travelers what they want. And once they start getting what they want, “diminishing gratification” may set in. Moreover, trying to change their travel booking behaviors later, during leaner times, would be that much more difficult. Instead, Reynolds suggests travel management pros find ways to keep travel costs down without creating bad experiences for employees.
Recently, I’ve noticed a marked increase in focus on traveler engagement and satisfaction in our industry. With the labor market heating up in step with a stronger U.S. economy, managed travel programs have come under scrutiny not only in the traditional sense of driving cost savings, but in how well they are gauging feedback from travelers and supporting their wants and needs. At the risk of voicing an opinion that stands apart from popular perception, I have to say I’m firmly against the latest rallying cry of “happy travelers make for happy companies.”
Under this mantra, travel managers are told to reward travelers for doing the right thing. But shouldn’t travelers do the right thing without being rewarded? Further, not only are the true costs of these rewards difficult to measure, but also it’s impossible to measure the return on investment. I can speak from personal experience, having been a road warrior for more than 25 years in both fully flexible and tightly monitored programs. Once a company starts paying me to do the right thing, my first thought is, “So why do the right thing in the first place? My colleagues who have been booking outside the policy are being rewarded to do what I’ve always been doing, so perhaps I should start booking outside policy so I am rewarded too.” I don’t think I’m alone in this way of thinking.
In the end, most travelers care about their airline and hotel reward points. Would I like to travel first class all the time? Sure. Will I be more productive in first? Perhaps not, as I may take advantage of the free drinks! Would I like to stay at the Ritz Carlton versus the Courtyard? You bet. Will I be more productive? Only if the Courtyard is a cave without Internet and a desk. Will I be happier? In all likelihood I will be for a while, but only until the upgrades become my new norm.
These examples demonstrate diminishing gratification. For most corporate travelers, airline seats and hotel beds are commodities. It just doesn’t matter where I sit (just don’t put me in a center seat or force me to take an unnecessary connection) or where I sleep (unless you put me in a seedy motel with only twin beds). Aisle or window is fine. A three-star or better hotel with a TrustYou score over 75? I’m good to go. What I really want is someone to just book it for me. Want to increase productivity? Give me an administrative assistant. Want to make me happier? Give me a raise and a bonus.
How did we get to the point where we started to think that providing upgrades will make travelers more productive or satisfied? I believe it’s due to three things:
1. Travel reporting to human resources. First, when travel managers report to human resources and not procurement, it shifts the travel category manager’s goals and objectives. HR cares about happy employees and procurement cares about healthy bottom lines.
2. The advent of the Internet. Back in the ice age, travelers had to book through an agent and the agent enforced the policies. Travelers had no opportunity to book around the system. Then along come the Internet and online booking tools and things got out of control. Travelers started acting like kids in the travel candy store. Later, OBTs got back some control over the airline seats, but hotels are still a traveler buffet. Under the new traveler happiness mantra mentioned above, we now want to pay the kids to not eat the candy.
3. A strong economy. Why rock the boat when profits are good? Let them have their points. It’s not worth the fight. The fly in this ointment is that bad behavior gets worse over time. The longer you allow the bad behaviors to exist, the harder it will be to tighten the controls when the next recession hits. If you give a kid candy every night for five years, be prepared when you take it away for a huge temper tantrum from a really fat kid. It’s best to not give it to them in the first place, or only on special occasions.
These points aside, my real gripe is the inability to measure or quantify an increase in productivity or traveler happiness as a result of travel perks or upgrades. I can hear the pundits now: “Just because you can’t measure it doesn’t mean it doesn’t exist. You must start thinking in terms of value, not just costs.”
Au contraire.
The reason you can’t measure it is because employee happiness varies by individual. It includes a myriad of factors such as the nature of their work, what happened yesterday, their boss, their salary, their co-workers, the weather, the purpose of the trip, how often they travel, completely unrelated factors in their personal life … I could go on for days.
Trying to tie employee happiness to travel is like trying to tie company performance to trips taken last year. While they may appear related, it doesn’t mean they are — just like how the stock market isn’t tied to the length of the grass in my front yard. If you want happy employees, give them raises and tie raises to job performance. Now that’s a relationship I can believe in.
If you’re a travel manager sitting within the HR department of your company, don’t fall for the trap of believing that upper management will agree that spending more money on travel will increase employee morale and improve employee performance. In reality, their first thoughts may be, “It’s time to move travel over to procurement, and why is this person managing travel?” If you want to get that promotion or improve the perception of your role among senior leadership, the better approach is to identify significant and quantifiable cost savings without impacting travel quality. You have to keep both the company and the traveler satisfied.
Related
• Traveler Friction And The Diminishing Return Of Cost Savings
• Traveler Engagement: (Hard) Work In Progress
• Saving Dollars And Making Sense Of Travel Management’s Worth
• Teleconference 6: Traveler Engagement
Steve, I agree whole heartedly with most of your statements. Might sound weird for the founder of a company whose mission is traveler happiness.
Moving a good travel program to a great program means focusing on productivity and satisfaction AND sustainable savings and safety. We use this as a traveler happiness formula as, to your point, you have to satisfy the corporate AND the traveler.
So if the total equation means higher overall cost it’s not a great program (unless you can prove that productivity and satisfaction create lower cost, higher revenue and/or leadership is willing to accept soft dollars).
Rewarding travelers with money for good behavior does not fit this equation as science has proven that this does not lead to sustainable savings (it’s like sugar, you need more to satisfy the craving). Seven-star hotels and stretch limos for everyone won’t do the trick either, as they’re not economically sustainable.
So if you report into HR (or finance for that matter) I suggest using traveler data and feedback in showing how you can improve the experience for travelers without impacting the bottom line. Most of that can be done by a willingness to listen to the traveler and using technology.
The answer will most likely be to start personalizing the program on a company, policy and individual traveler level. Integrate internal processes, procedures and systems into seamless user flows, directly connect suppliers and travelers, make sure travelers are in the know all the time and make sure you truly listen to travelers.
With great respect for Steve Reynolds, his views on this topic are fundamentally flawed. His points come straight from procurement’s old-school playbook — travel is a commodity, cost matters more than value, we’ll decide what’s best for travelers, and travel ROI can’t be measured so don’t bother. All that, and zero facts to shore them up.
I’ll tentatively agree on one point, that traveler satisfaction may not be a good indicator of the value achieved from spending money on travel.
The key is asking what metrics can be used to judge the value received from a travel budget, and then finding other metrics that are correlated with those value-oriented metrics.
In the 2016 American Express Global Business Travel/ARC/tClara study of 757 U.S. road warriors, we controlled for the type of travel policy the road warriors were managed under. The differences were stark.
Compared to road warriors who were managed by traveler-focused policies, we found that those managed by cost-focused policies had:
22 percent fewer trips rated effective;
12 percent more trips rated not effective;
2 times the amount of traveler friction as measured by nine indicators such as sleep, stress, sickness, productivity, and fear for personal safety;
More interest in getting a job offer; and
Less willingness to travel
Steve, my friend, I’ll see your anecdotes and raise you those five hard facts.
If nothing else, companies should measure and manage two new metrics: their road warrior attrition rate and their trip scrap rate. Trip scrap rate is the percentage of prior trips that a traveler rates as not effective. Our 2016 study pegged this at an average of 12 percent; it was 6 percent for travelers in traveler-focused programs and 18 percent for travelers managed in cost-focused programs.
It doesn’t matter where travel reports. It does matter that travel managers build a bridge to HR based on the travel policy’s impact on recruiting, retention, health, safety, productivity and engagement.
Why would any senior executive not want a travel policy shaped by those considerations?
While I have great respect for Scott and his perspectives, I have to disagree with several points being made. First, what is the correlation between the cost of the hotel and trip effectiveness? If a trip is ineffective, it’s more likely driven by the outcome (sale not made or client not happy) rather than the class of hotel booked or seat on the plane. Don’t try to make a correlation where there isn’t one.
Yes, letting travelers pick their hotel and/or class of service may make them happier, it doesn’t necessarily correlate to trip effectiveness. There are way too many variables to consider that have much bigger impact upon trip effectiveness. Did you measure salesman performance? Are they making quota? Client happiness with the service being provided? How does the service being sold compares to the competition? Fix those issues and fantastic things will happen.
If you allow ineffective travelers to book whatever they want and all you will have is a happy ineffective team. Here’s a survey to consider for road warriors – would you rather have greater flexibility on your travel purchases or fix the issues impacting your sales performance? My guess is it will be 100% the latter.
What a good debate! Our common ground is that price doesn’t correlate to trip effectiveness. But trip quality probably does. Our study didn’t measure trip quality, but that’s a really interesting line of thinking.
Is it logical to think that trip quality does contribute to trip effectiveness? At some level it has to, or we’d see travel policies that require tents and bicycles. Think of all those savings!
It turns out that traveler satisfaction does correlate with trip effectiveness, per our 2016 study. Road warriors in traveler-focused programs had significantly higher satisfaction and significantly more effective trips.
The reality is that the type of travel policy does correlate with (but not necessarily cause) trip effectiveness. Trip scrap rate is probably as good a metric for estimating travel’s ROI as you can get at scale. So let’s not ignore this remarkable finding. Cost-focused programs correlate with higher trip scrap rates. That has big budget implications.
What we should do is dig deeper to understand what causes ineffective trips. With enough data, we could rule in or out the impact from things like hotel quality and convenience, class of air service, impact of jet lag, etc. I’ll bet dollars to donuts that sleep is a significant explanatory variable. If so, that has big implications for hotel choices and cabin policies.
Finally, Steve’s survey question should not be either-or. It should be “and”, as in “would you like more flexibility in your travel choices and better results?”
Might a “Yes, please!” answer cost more? Of course. But if the payback is high enough, then it is the right answer.
Here’s an Excel model designed to deal with this exact question.
Right on Steve!
Right on the money … after all, we do get to keep the points on air car and hotel, get a decent hotel with internet, and hopefully a tool that monitors safety threats. Our moods will always be impacted by many factors … all we should ever want is to be treated fairly and equitably.
We are looking at different questions to balance: Was the trip effective? Was it due to relative traveller comfort? Was the traveller happy with the journey?
Effectiveness is very hard to measure. A binary answer is subject to judgement calls by the traveller (self-bias, context). My trips are always so important and effective.
Once you go past a minimum threshold of comfort level, correlation between comfort and effectiveness isn’t causation. Only in a few scenarios can you make linkages, like getting off a 17 hour Perth to London flight at 5am and be in a meeting at 9am.
Traveller happiness is also very qualitative, and will show up in long-term retention numbers. I’ve seen clients get off longhaul in economy, not complain, and be fine in a meeting the next day. The company pays well in stock options and costs control helps boost profits and the stock price. People stay.
Poor financial rewards and a stingy policy are a recipe for retention problems. One company I know pays £10/meal (in London!) and doesn’t let employees expense any meal when on day trips. Yes, people don’t stick around there.
An interesting question to ask would be, was the trip needed in the first place? I’ve been on many a meeting where a super-duper VP shows up because the client expects to see one, irrespective of the VP’s contribution. After the introductions, tje VP usually checks email the rest of the time and keeps stepping out for calls while everybody else does the work.
Anonymous collection of trip effectiveness rating (may be a score of 1 to 5), combined with trip reasons, and cost of the trip would provide interesting insights.
Steve… I totally agree with the admin assistant comment. A good assistant can free up a lot of time that’s better utilised. I learnt the lesson the other way when my asst was taken away and suddenly 20% of my time was spent on admin work and lovely “self-service” tools, and my company didn’t understand why I wanted them to reduce my revenue targets by 20%!
I hear you Steve. Across the article I believe you’re saying business travel is about business and not travel (we have to thank Scott G for that line). I agree. Having directly led programs for 10+years (with regular C-level contact) and worked in consulting roles with 100+ companies, travel is simply … insignificant (shock!). However, with the rise of the consumer comes the rise of the employee. In the 2018 PWC CEO study, the lead theme is CEOs feel the need to create higher value and purpose for people than just hitting the numbers. With this comes greater linkages between the environment a company wants to create and its travel program. That doesn’t mean if you’re a cheap hotel and a diet coke type that you’ll start staying in deluxe hotels drinking champagne; it simply means your company will get better at articulating what, as an important employee doing meaningful work, you can expect from your employer. 90% of the CEOs I’ve had 1:1s with (re this topic) in the past 2 years totally subscribe to this. There lies the opportunity …
Thanks for this! I see firsthand that the more you let people get away with, the more they want. I explored some gamification ideas, but could not get behind rewarding travelers to “do the right thing.” And don’t even get me started on points!! I purposely choose boutique hotels for our program for that reason.
I love the Google concept of a trip budget and accruing points in a bank for good behavior on one trip that you can then use towards the next trip if you want to fly PE or stay in a nicer hotel. It gives the traveler a feeling of control. Unfortunately, nobody is marketing this as a policy tool for the rest of us…only programs tied to physical rewards like gift cards. We’re working on our own internal program of rewarding good behavior with philanthropic donations…just starting, wish us luck.
A lot of points well-taken and grumpiness is always appreciated.
I’d like to expand on Steve’s debunking of the idea that you can’t spend enough to enhance travelers’ well-being. In the course of his argument, he takes the free spenders to task for dismissing the objection that they cannot quantify their proposal’s benefits. I would suggest that business travel itself is open to Steve’s criticism.
To properly evaluate whether a trip should be taken, you have to identify the business purpose, estimate the value of fulfilling that purpose, determine whether travel offers sufficiently greater odds of success to justify the incremental cost over alternatives like making a phone call, and so on. And there’s considerable “so on.”
Fact is it takes a whole lot of work to analyze the advisability of a trip. It’s probably not worth the effort for most business travel. That’s why trip authorization tends to be done on the basis of broad travel purposes that conventional wisdom presumes to be cost-effective, like sales or Rallying the troops (always an incalculably high return on this one!). In effect, organizations budget travel by what they can tolerate rather than by what they need. In such a slushy budgetary environment all sorts of fatuously benevolent ideas can flourish exemplified by the one that so irks Steve (and anyone else who has ever had to meet a payroll). Is it better to take one high quality trip where you stay at the Ritz or five where they put you up at the Bedbug? If you are not going to trouble yourself with detailed analyses, who’s to say?
So what do we get for our travel spend? We really don’t know, but we seem to be ok with that.
An interesting perspective and one I used to hold, until I started listening to thousands of business travelers. Very few of those travelers stated that flying first class and staying at the Ritz Carlton versus the Courtyard will make them happy or more productive. In fact the vast majority of them are looking for improved productivity from their travel program – specifically better technology (booking, travel apps) and policies that are easy to understand and find. While hiring an administrative assistant might solve those issues, it will also impact the company’s bottom line.
I absolutely agree that travel perks or upgrades will not make employees happy and that pay tied to performance likely would. However I have found that traveler satisfaction is linked to the experience their travel program provides, from booking to expensing.
While I understand and appreciate Steve’s position on traveler satisfaction, I have to disagree. Traveler satisfaction is critical to bottom line performance for a company. And there is a continuum of satisfaction. Being a satisfied traveler doesn’t mean I have to go from the Courtyard directly to the Ritz. It could be I go from the Courtyard to Moxy because the Moxy gives me the experience I need to be successful. A core fallacy of Steve’s argument is that more satisfaction is driven by more money spent. Not true. Also, blanket statements like ‘salary raises and bonuses drive satisfaction’ assumes that every traveler is driven by monetary incentive. Some of us are driven by the desire to serve (we are, in point of fact, a hospitality industry) and the competitive drive to win in the marketplace. While I agree that travelers should ‘do the right thing’ without being paid to do so, there is something to be said for putting a policy in place that balances traveler satisfaction with bottom line results.
Great dialogue about an important topic by two very qualified authorities, As Steve mentions, there was a time when the travel manager had absolute control in overseeing how money was spent on business travel and travel policy dominated the conversation. Now, the pendulum has swung the other way with vendors going directly to the company’s business travelers and diverting them from the guidelines of policy. Travel mangers are forced to carry two flags which requires them to guard the company coffers while minimizing the complaints coming from their travelers. One wonders if Scott’s interpretation of “trip quality” is merely the traveler’s version of “trip comfort.” In either case, those of us involved in the business of travel management have an obligation to eventually, well … manage travel, and that means that not everybody is going to be happy all the time. If I choose to use a medical service that is outside of my company’s healthcare provider, I may do so but at my own expense. Same for office supplies, telecom or anything else the company provides as a means to conduct business. Business travel should be no different.
Exactly! Mark is spot on with his healthcare analogy.