Blog /The Costs of an Unmanaged Business Travel

Posted on 27 Feb 2023

The Costs of an Unmanaged Business Travel

Unmanaged business or corporate travel refers to businesses that do not use centralized platforms to manage their internal travel.

To begin with, we need to know what is business travel at first.

Business or corporate travel entails employees traveling domestically and internationally to attend face-to-face meetings, conferences, product launches, trade shows, and other events. It is a major contributor to the global economy and accounts for a significant portion of regional and country-specific travel influxes.

There are some companies that see business travel as an added cost, while other companies see it as an investment. However, corporate travel is essential for many organizations seeking opportunities outside of their immediate surroundings. These include market expansions on a national, regional, and international scale, as well as discussions, partnerships, and other initiatives.

What does unmanaged business travel mean?

While unmanaged corporate travel saves organizations money and time by avoiding fees and commissions from travel management companies, it still consumes more time and money in the long run. Unmanaged corporate travel refers to businesses that do not use centralized platforms to manage their internal travel. Internal employees can also manage their own bookings through their preferred channels based on previous experiences. They then claim it as a company expense and request reimbursement to their account.

This practice is not recommended because it may result in higher hotel and flight rates. While finding the best-guaranteed rates online takes time away from the organization, and enforcing an in-house travel policy can be difficult at times. As a consequence, travel expenses make up a sizable portion of a company’s financial structure, together with approval systems, expense documentation, and policy management being overwhelming and difficult to manage through internal departments at times

What happens when your business travel is unmanaged?

When your corporate travel is unmanaged, you know you’re letting a lot of money sit in the bank. It’s not that surprising that it would be slow to accumulate, but when it does, it can really add up.

Here are some of the things that happen when your corporate travel is unmanaged:

  1. Loss of productivity

When employees are stressed out or unhappy because they’re stuck in traffic or waiting for a flight that never takes off, they can’t contribute as much as they’d like to their work at home. Anything that prevents your employees from completing their tasks will cost you money. In this case, instead of focusing on their jobs, they would end up spending hours searching for and researching flights and hotels on multiple websites.

These scenarios imply that your people will take longer to complete tasks that others can do right away. They would then use whatever time they had left to play catch-up before leaving. That is not the level of productivity or efficiency.

  1. Bookings would suffer from a lack of visibility

Here’s another way to consider the impact of unmanaged travel on business productivity. Without an effective travel policy, it would force your employees to book their trips on multiple consumer sites and you’ll not get the best price.

A single booking change results in a protracted battle with customer service. The cumulative effect will be a significant travel headache, consuming even more work time.



  1. You will face compliance issues

Your employees will have nothing to comply with if you do not have a managed travel policy. The end results? As previously stated, their travel reservations would be all over the place.

However, a more troublesome issue arises here. The longer your company goes without a travel policy, the harder it will be to implement one. Employees may neglect or forget to provide the necessary paperwork, or they may fail to adhere to you.

  1. There would be no budgetary control

When your corporate travel is unmanaged, you’re at the mercy of your employees’ whims.

You can’t set clear policies and approve expenses; you have no idea what your budget will look like until it’s too late.

And that’s the next logical effect of doing business without corporate travel management: employees are booking expensive or extremely convenient flights and hotels, driving up your total costs.

  1. Your duty of care will be jeopardized

Unmanaged travel is when your employees are not under the direct control of their employer. This means they’re traveling on their own time and using their own resources, which can include phones, computers and even cars.

When your employees aren’t in the office, it’s up to you to ensure their safety and well-being. That means you have a responsibility to make sure that they are:

– Traveling safely

– Not getting into any stressful situations

– Avoiding delay throughout travel itineraries

The biggest problem with unmanaged travel is that there isn’t any way for you to know where your employees are or what they’re doing at any given point during their trip – unless they tell you (and even then, it doesn’t always work out). Also, there will always be factors beyond your control: rebooking, emergencies, inclement weather—and events concerning labor, political or economic issues.

  1. Expense tracking would become more difficult

The last thing you want to do when you reach your destination is to have to sit down at a desk and start entering receipts. It’s much easier to just let the system handle it for you.

But what happens when your corporate travel is unmanaged?

When employees are not given direct access to the company’s finances or enough initial cash from their employer when they reach their destination, they often shell out their own money, then present receipts for reimbursement when they return.

This whole inefficient process adds up quickly: from having to enter receipts manually into an expense report system, to having low compliance rates, manual expense reporting is not just inconvenient—it’s downright painful!

  1. You won’t have any data or insights for future business trips

If you haven’t managed your corporate travel, you’re missing out on a lot of opportunities. Not only will it lead to confusion, stress and rising costs—it also shuts you out because you don’t have any access to the data you need to organize and budget future work trips.

This would be the most significant risk you’ll take in not managing your corporate trips. The lack of accurate data may lead to a “managed” travel policy with inadequate and rigid measures or cost ceilings that your company will quickly exceed or barely reach.

  1. Dealing with travel operators by yourself

Unmanaged business travel results in you having to deal with airlines and other travel operators by yourself: for example, having to communicate with an airline travel operator in China. In this circumstance, it can be difficult for you to effectively communicate with an operator, especially when language is a barrier too; it gets hard sometimes even to handle a process of reimbursement from a big airline company, changes in the flights, or cancellations. Also, unused tickets can quickly lead to large increases in costs and time wasted when retrieving your funds. Another problem is that dealing with a robot, and not talking directly to a real operator, will be a headache and probably with no good results at the end – especially when it comes to get your reimbursement. 

Considering a managed travel strategy

While it’s important for startups to manage their travel, the costs of an uncoordinated travel workflow can quickly add up. As one of the first missions for most new companies, managing its own travel can be overwhelming and daunting. This is when the need for an in-house travel manager becomes essential — creating an integrated system of policies, procedures, and documentation that allows for smooth transitions between all departments.

When you are managing travel for your company, you want to make sure that every detail is handled efficiently and effectively. A managed travel plan will not only help you get top dollar for your travelers but also keep your employees happy with their trips.

Managed travel allows for:

  • Booking and trip scheduling
  • Travel, billing, approvals, and other employee-related controls and policies
  • Keeping track of expenses
  • Additional insight, data, and CO2 monitoring

What do you require managing your business travels?

As we mentioned earlier, it’s best to create and implement a managed travel policy early on, even if your company is still in its growing stages. It will address all seven of the problems we tackled here, but also protect you and your employees from being caught by surprise by future circumstances.

One key thing to remember when writing your corporate travel policy is that it must benefit both you and your people! For them, it has to be flexible, easy to comprehend, concise, and specific to their needs. That way, it would be easier for you to sell it to them – and they’d be more eager to comply with it.

On your end, it must cover research and comparisons, bookings, automated expense reporting, and insights backed by hard data.