Written by: Mike Heck – Vice President, Suppliers Solutions

In an attempt to do anything possible to find the lowest possible airfare, consumers are “Skiplagging”, the practice of booking an itinerary where the stopover is the actual and intended destination of the traveler.

While the name is new, the practice of Skiplagging is not. It has existed in the airline industry for many years and has most commonly been known as “hidden city ticketing” or “point beyond ticketing”. The term Skiplagging has evolved as there is a website (www.skiplagged.com) that makes the practice very easy for today’s air traveler (note: the website charges a ticketing fee to use their service).

To understand why consumers would take these steps to circumvent the airline industry’s pricing model, one must understand how airlines actual price their flights. Prices are set based on supply and demand and not distance traveled.

For example, a passenger wants to fly non-stop from MKE to DTW. Delta Air Lines is the only carrier to offer nonstop service in this market.  The OW Basic Economy fare for a flight on October 24^th is $209 and the main cabin fare is $229. Now pick a city “beyond” DTW, lets use GRR (Grand Rapids MI). The OW Basic Economy fare is $129, and the main cabin far is $159. So, in this example, the passenger buys a ticket MKEGRR but gets off the plane in DTW, their intended destination. Savings to the passenger is between $70 and $80 dollars.

Delta Air Lines charges more to go MKEDTW than it does MKEGRR simply because of supply and demand. Delta Air Lines is the only carrier with a nonstop flight in the MKEDTW market. There are multiple carrier options in the MKEGRR market. There is nothing wrong with this, as all airlines price (and they should) based on supply and demand and value they bring to the passenger.

While Skiplagging is technically legal, there are risks to the passenger and airlines do have the ability to respond and take action.  A passenger cannot check a bag as the bag is checked through to their final destination. In the example above, a checked bag will end up in GRR and not DTW. If a flight is cancelled, the airline may offer protection on a different airline with a new itinerary that does not include the desired final destination. That passenger flying MKEDTWGRR on Delta Airlines could be protected on United Airlines, flying MKE to ORD, and then GRR. DTW is no longer an option. And if the passenger in my example had purchased a roundtrip ticket MKEDTWGRRDTWMKE and deplaned on the outbound in DTW, the airline reserves the right to cancel any downline space after the passenger fails to board the DTWGRR flight, essentially forcing the customer to buy a new ticket to get back to MKE.

And most importantly, when a passenger buys a ticket with any airline, they are agreeing to the airlines “Contract of Carriage”, which outlines the duties, rights, and liabilities of both parties.  Airlines have the right to set their prices, set their policies and ticket rules, and expect the passengers who purchase tickets follow these policies and rules. Skiplagging is breach of the Contract of Carriage by the passenger. If this practice continues on a specific carrier, the carrier can take action against the passenger including suspending that passenger from flying on them or suspending the passenger’s frequent flier program.

Any consumer considering Skiplagging must weigh the short term benefit with a possible very unfavorable outcome.

Additional Resources:

www.delta.com

https://www.usatoday.com/story/travel/airline-news/2023/07/23/what-is-skiplagging-hidden-city-ticketing/70438246007/

Written by: Gina Maylath, GTP – Global Client Solutions Manager & Dylan Christian – Data Analytics Manager

In today’s fast-paced business landscape, efficient travel management is crucial for companies looking to control costs, enhance employee experiences, and streamline operations. Travel Management Companies (TMCs) play a pivotal role in helping organizations achieve these goals by providing comprehensive travel solutions. However, in the quest for optimal travel management, a critical factor often goes unnoticed: data management. In this blog post, we’ll delve into the importance of data management and explore the benefits of integrating expense data with TMC travel data to measure leakage – a term used to define transactions booked outside of the TMC.

The Power of Data Management

Data is the cornerstone of effective decision-making, and the travel industry is no exception. TMCs collect vast amounts of data ranging from flight bookings, cabin class, ticket cost, low fare cost, hotel and car reservations to policy violations. This wealth of information, when properly harnessed and analyzed, can provide valuable insights that drive informed strategies. However, without a robust data management framework, this potential remains untapped.

Data management involves a series of processes that encompass data collection, storage, processing, analysis, and utilization. By adopting a disciplined approach to data management, TMCs can:

1. Enhance Visibility: Comprehensive data management ensures that all relevant travel data is captured, providing a clear picture of travel expenses and patterns.
2. Identify Trends: Analyzing historical travel data allows TMCs to identify trends and patterns, enabling them to negotiate better rates with suppliers and optimize travel policies.
3. Optimize Budget Allocation: Accurate data helps allocate budgets effectively, ensuring that resources are allocated where they yield the highest returns.
4. Enhance Risk Management: By analyzing data, TMCs can identify potential risks associated with certain travel choices and take proactive measures to mitigate them.
5. Improve Supplier Relationships: Armed with data insights, TMCs can engage in more meaningful discussions with suppliers, leading to mutually beneficial partnerships.

Measuring Leakage: A Key Metric for Travel Management

One of the most significant challenges TMCs face is “leakage,” which refers to bookings made outside of the TMC’s control. Leakage can occur when employees book directly through suppliers or online platforms, bypassing the TMC’s and companies negotiated rates and policies. Integrating expense data with TMC travel data is an effective way to measure and manage leakage. Here’s why:

1. Holistic Insight: Combining expense data with travel data provides a comprehensive view of all travel-related transactions, enabling accurate leakage measurement.
2. Identifying Leakage Sources: Integrated data allows TMCs to identify the sources of leakage and understand why employees are booking outside the designated channels.
3. Policy Enforcement: With leakage data in hand, TMCs can enforce travel policies more effectively, ensuring compliance and cost savings.
4. Negotiation Power: Armed with detailed leakage insights, TMCs can negotiate better deals with suppliers, based on a comprehensive understanding of the organization’s travel patterns.
5. Cost Savings: By reducing leakage, companies can significantly cut down on unnecessary expenses, maximizing their travel budgets.

Data management is the cornerstone of efficient travel management, providing insights that drive better decision-making and cost savings. Integrating expense data with TMC travel data offers a comprehensive view of travel transactions, allowing organizations to measure leakage accurately and take proactive steps to mitigate it. By embracing data integration and adopting strategies to reduce leakage, companies can ensure that their travel management efforts are not only streamlined but also optimized for maximum cost-efficiency and employee satisfaction.  It’s time to harness the power of data with Fox World Travels reporting platform Cognition.  Cognition will help guide and transform the way you manage your travel program through intuitive data visualizations and point and click drilldowns and insights.