A confidential government audit has uncovered widespread practices where travel management companies pocket millions in hidden commissions and mark-ups, raising concerns about transparency in the industry. The audit, obtained by the ABC under Right to Information laws, details how companies can earn undisclosed income from suppliers like airlines, hotels, and car rental firms.
The review, based on the experiences of consultants Butler Caroye and Goldspring, warns that travel management companies often fail to pass on commissions to clients as required. In one case, an unnamed company underpaid a client by an eight-figure sum due to a disputed interpretation of 'commission' in the contract. Another instance revealed a travel management company applied hidden arbitrary mark-ups to international airfares for five years, leading to an eight-figure out-of-court settlement.
The audit also highlights issues with hotel booking systems, where companies may make lower rates seem unavailable to book higher rates that earn commissions. While the review notes that not all companies engage in such practices, it acknowledges that prevention is difficult due to the complexity of tracking bookings.
The revelations come as Brisbane-based Corporate Travel Management faces scrutiny over overcharging UK clients, including the British government, by up to £77.6 million ($157 million). The company has announced mass refunds dating back to 2021, calling the issue 'serious' but isolated to the UK. It has declined to answer questions about how the overcharging occurred or whether criminality was involved.
The Australian Travel Industry Association has defended the sector, stating its accreditation scheme ensures members meet rigorous standards. However, short-sellers have long raised concerns about Corporate Travel Management's accounting practices, which the company has consistently denied.
