Study: Billions Wasted in Business Travel

While the major U.S. airlines may be losing millions of dollars with their frequent-flier programs and triple-mileage travel awards, a new study contends that companies are wasting as much as $12 billion a year on business travel.

The survey of 57 large and medium-sized companies by Travelmation Corp., a travel agency based in Stamford, Conn., found that U.S. businesses are squandering 10% to 15% of their annual travel budgets.

Harder to Find Fares

Travel agents’ use of “antiquated” airline reservation systems that can’t keep pace with fast-changing fares is the main cause of the waste, according to the study.

Airline analysts estimate that U.S. carriers currently make around 40,000 fare changes a day.

“Millions of dollars could be saved by companies each year without reducing quality, by combining the use of advanced computer technology with a carefully worked out corporate travel plan,” said Travelmation President Louis Van Leeuwen, who directed the survey.

Conventional travel agencies--whose methods worked well before deregulation of the U.S. airline industry in 1978--are now unable to offer companies the best travel values, Van Leeuwen said.

Among the study’s other findings:

Conventional travel agencies, even those equipped with computers, can’t keep track of constant fare changes.

Many travel agents can’t guarantee that they will find flights at the lowest fares available.

Many agents don’t automatically process the daily-changing rules governing which fares can be used on which flights.

Corporate travel policies are largely ignored by travel agents.