Leakage
Travel spend that falls outside a company's managed travel program, occurring when employees book through unapproved channels or with non-preferred vendors.
Leakage in corporate travel refers to bookings and expenditures made outside the organisation's sanctioned travel management framework. When employees use consumer booking platforms, call vendors directly, or choose non-preferred suppliers instead of the company's approved online booking tool or travel management company, the resulting spend is considered "leaked." Leakage reduces an organisation's ability to leverage negotiated rates, undermines volume commitments with preferred suppliers, obscures true travel spend, and complicates duty of care monitoring. Reducing leakage is a primary objective of corporate travel programmes, achieved through policy enforcement, technology integration, and employee communication.
Why it matters
Leakage has financial consequences that compound over time. Spend outside the program cannot be used to meet volume thresholds with preferred suppliers, which risks eroding or losing negotiated discounts. Finance cannot include it in travel budget reporting without manual data aggregation. Duty of care systems cannot track travellers who book outside the tool. And at scale, a 20% leakage rate can cost more than the entire TMC management fee through lost rebates and discounts alone.
How it works in practice
Leakage is typically quantified by comparing corporate card spend in travel categories against the spend recorded through the booking tool or TMC. The gap represents bookings made outside the program. Organizations can reduce leakage through a combination of policy communication, making the approved tool easier and better to use, and applying consequences for non-compliant bookings — such as requiring out-of-policy justification at the expense submission stage.
The takeaway
Reducing leakage starts with understanding why it is occurring. If travellers are booking outside the tool because it lacks inventory, is too slow, or doesn't have a mobile app, fixing the tool is more effective than strengthening the policy. If leakage is driven by travellers seeking personal rewards on non-preferred carriers, adjusting the corporate program's incentive structure may be more productive than enforcement. Diagnose the cause before choosing the remedy.