Supplier deals
“It’s still a complaint,” says Clare
Murphy, director of specialist travel management consultancy Bouda. “Clients should have accurate data, and if they haven’t they need to talk to their suppliers and their TMCs, and then sit down and analyse the data – there’s really no excuse these days.” Her comments echo Carlson
Wagonlit Travel’s (CWT) stark warning – published as an “additional perspective” in its forecasts for this year. Suppliers, CWT said, “will remain strict on enforcing the contractual commitments that travel buyers have made with them… Travel
buyers must proactively monitor and understand their performance to conduct
effective conversations
with the suppliers, and to avoid penalties for missing targets.” The GBTA says that in North America, while corporate travel prospects are improving all the time, travel buyers are expecting a much tougher negotiating season this year, with hoteliers driving the hardest bargains. Nearly half (48 per cent) of buyers polled for the
Association’s first-quarter report expected negotiated discounts with hotels will be lower in 2013, against only 29 per cent who said the same about airlines, and 28 per cent who thought meeting venues would be tough nuts to crack. The European picture is more
mixed, with comparatively strong growth projected in the UK and Germany, and a weaker recovery in Mediterranean countries – suggesting
Corporates buying in northern Europe will have a rougher ride at the negotiating table
“The most effective travel programmes engage procurement professionals who understand the personal side of travel, and travel management [professionals] who value the rigour of procurement processes.” With procurement’s rottweilers back on the leash, and a new touchy-feely take on road warriors’ well-being, corporate travel appears to be going through a period of role reversal. Today, it’s the suppliers who are starting to rub their hands with glee. n
corporates buying in northern Europe will have a rougher ride at the negotiating table.
GENTLER APPROACH And the nature of those negotiations may be changing, too. According to a recent white paper produced by TMC Egencia, hard-nosed procurement practices are giving way to a gentler approach to life on the road. “Especially in a recessionary environment, the pendulum between service-oriented travel management and more savings- oriented procurement practices swung decidedly to the side of procurement,” the report says. But: “As the economy begins to recover and corporate travel volumes return to – or even exceed – peak rates of 2007 and 2008, the most progressive travel programmes have discovered that a heightened awareness of traveller needs is critical to driving the right traveller behaviours and supporting the procurement constructs that now form the backbone of travel management.
MURPHY’S LAWS
Clare Murphy, director of specialist travel management consultancy Bouda, lists the key points for those buying hotel rooms
• Decide if you are going to manage your hotel programme or ask your travel service provider to manage it on your behalf.
• If the travel service provider is to manage the programme, is there a fee? And check that the hotel recommendations include properties you specifically require.
• If you plan to manage the programme yourself, establish whether your travel service provider will be charging fees, for example for loading the rates on to the GDS on your behalf.
• Use historic data to formulate your hotel programme, but also speak to key departments about forthcoming projects which you may need to take into account.
• Canvas travellers’ views on the current hotel programme and establish what ‘extras’ might be important to them.
• Understand your booking profile and advance purchase habits.
• Use publicly-available industry research – from STR Global, for example – to gain an understanding of general developments in your key markets.
• Produce a template in Word or Excel of the key information you want to collect – room type, rate, cancellation periods and the like – so hotels can respond in the same format.
• Tell hoteliers how many room-nights they can expect, and indicate the kind of room rates you are seeking.
• Press for an ‘on the day’ cancellation period.
• Check advance booking patterns to see whether last room availability (LRA) is important to you, and be aware that some hotels will charge a premium for it.
• If your travellers are likely to eat and drink at the hotel, request a discount on food and beverage spend.
• Support your preferred hotels. Proactively manage policy compliance to ensure they benefit from the business you promised.
• Check whether your travel service provider charges a fee on nett rates. If commission is payable, establish precisely how much can you expect to receive – your return may only be a fraction of the negotiated commission.
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