By John Hall
Availability of and access to fare and accommodation information for business travelers have never been greater, as are security risks in many international locales. These translate to two big challenges for travel procurement: Compliance and safety. Both can impact travel budgets if buyers don’t monitor them closely. Consequently, corporate buyers are taking a long and hard look at existing travel policies, and how relevant they are given the rapid evolution of mobile technology and social networking.
“Someone making their own travel arrangements may feel they’re getting a better deal but that may not always be the case,” says Joel Wartgow, Senior Director, CWT Solutions Group, Americas Region (pictured left). “There are reasons why companies negotiate contracts with travel suppliers.” He suggests travel buyers focus on negotiating agreements that provide the most value for their company.
Joseph Bates, Vice President of Research at the Global Business Travel Association (GBTA) says few things give buyers more heartburn than mobile technology in the hands of eager travelers.
“Research we’ve conducted shows the number-one issue for travel buyers and managers today is compliance within the organization,” he says. “It’s become more challenging because of technology and mobile apps. Travelers can very easily find spot fairs that are cheaper than the negotiated rate. But what the travelers don’t understand is the company might save money on that one fare, but there’s all these other fares that will eventually suffer if a company doesn’t consolidate its spend with contracted suppliers.”
Then there’s the issue of security of information and traveler safety.
“Buyers must ensure suppliers can maintain the accuracy and security of the data being transferred through mobile channels, and that the data can be integrated across suppliers and platforms to ensure it is available to help track travelers in an emergency, for instance,” CWT notes in its most recent forecast.
With the world becoming a more dangerous place by the minute, buyers are challenged to ensure they provide the best, most reliable information to their employees before embarking. “Travel managers are becoming more cautious, ensuring travelers are aware of problems around the world and that emergency assistance and security is in place,” Bates says.
“Other than managing expense, which is a constant challenge, security and duty of care are key challenges facing companies this year,” says Yannis Karmis, President, Travelocity Business (pictured right), in an interview with My Purchasing Center. “This requires more attention as natural disasters like Hurricane Sandy shine light on the need for support from travel managers.”
In addition, roughly half of all hotel bookings are made directly with hotel properties, which means a travel manager may not know where the traveler is staying, Karmis adds. “This can prove troubling should a traveler get sick, is involved in accident or traveling to a country experiencing political volatility. Knowing where your traveler is located while traveling and having policies in place to handle these situations is vastly important and can be aided by pushing travelers to book a hotel stay through their travel management company.”
It all comes down to education and information, CWT’s Wartgow adds. “If you’re unable to meet the intuitive needs of your traveler, you run the risk of them making their own decisions, which may take them outside of the preferred booking channel that allows you to track them and ensure their safety. Many companies have standards around hotels that will be included in their hotel program and those standards are vetted by the hotels. If someone doesn’t comply, they could be putting themselves in an unsafe situation. Safety and security are one of the primary reasons why we want to get travelers to follow their companies’ guidelines.”
Collaborate with Stakeholders
Corporate travel buyers don’t have to go far to find tips on strategies to cope with rising fares, compliance and security. CWT and Travelocity Business, for example, offer a wealth of ideas on their websites and through individual consultation.
In interviews My Purchasing Center conducted, one prevailing theme centers on the need to forge closer, more trusting relationships with travelers.
“It all has to do with educating the traveler,” Bates at GBTA says, “not creating a hostile relationship between the travel department and business traveler, but more of a cooperative, working relationship.”
CWT dubs it “traveler centricity.”
“Procurement should understand that travelers today have moved into a very strong position within the travel buying decision,” Wartgow tells My Purchasing Center. “They have access to more information than they’ve ever had before, and they can access it quickly. They have more knowledge than they’ve ever had before so they feel very confident in making their own decisions and those decisions may or may not be in synch with the company’s desires.
‘That’s where it becomes really important to harness the energy of the entrepreneurial traveler who’s a little bit more willing to find a flight or hotel or rental car,” he says. Think about how can you influence that traveler and harness some of that energy to take advantage of what they’re willing to do to make travel arrangements.” One strategy CWT offers is implementing an “adaptive travel policy” in lieu of a very stringent ‘one size fits all’ approach. This allows buyers to manager traveler behavior, he added.
Another prevailing strategy is centered on not only staying abreast of emerging technology, but harnessing its power to drive compliance and stay informed. Travelocity Business, for example, offers tools such as its Hotel Rate Assure program, which was enhanced recently to ensure preferred properties at a company’s preferred rates are available during the booking process, Karmis says. CWT offers a host of tools, including a traveler scorecard, which tracks travel spend and policy compliance at the individual employee level, helping travelers better understand the overall cost impact of all the large and small decisions they make.
John Hall is a freelance writer who reports on commodities markets and procurement and supply management topics for My Purchasing Center. His website is jhallmedia.com.
The overall objective of supplier segmentation is to identify high-yield segments, that is, those segments most likely to be profitable or show good growth potential. According to Read More
(This article is an extract from a kodiakrating.com article and is published courtesy of kodiakrating.com) The old leadership adage: ‘You’re only as good as your team’ truly applies when it comes to optimizing the innovation, supplier collaboration c… Read More
The EPIC Awards recognize and celebrate the most innovative, dynamic, and accomplished procurement leaders. This year, nominations will be accepted for Read More
Staples Advantage is the one supplier that offers all the business solutions you need, all with the expertise of a specialty vendor. Read More
It started in 1972 with an idea, a new concept in distribution. Today, Digi-Key Corporation is one of the fastest-growing electronic component distributors in the World. The stimulus for this growth is Digi-Key's customer-centered business philosophy… Read More
Procurement and supply management leaders have a seat at the table, and management’s expectations are high. But what do CEOs really want, and is purchasing delivering on these expectations? This webcast looks at how procurement and supply management … Read More
At world-class companies, purchasing’s influence touches just about every area of spending. But, how exactly do procurement teams get to the point where other departments approach them for help with sourcing such indirect categories as human resource… Read More