ASK THE EXPERTS


WORDS ROB GILL


N THESE DAYS OF EVER-GROWING travel and transport options, it may seem counter- intuitive to seek to reduce the number of suppliers in your travel programme. Isn’t choice always a good thing? Rationalising the number of travel suppliers can make both financial and practical sense for organisations of all sizes. The benefits of rationalisation include cutting down on paperwork and invoicing, as well as being able to access better corporate deals by driving increased booking volumes to a smaller pool of suppliers.


It is also much simpler for buyers to manage a reduced selection of preferred suppliers, including the major bonus of having to take part in fewer RFPs. Of course, there can be pitfalls. When a regular traveller is told they can no longer use their preferred airline or stay at their favourite hotel, the buyer may be in line for some negative feedback. Communication with travellers about any rationalisation process is essential to ensuring its success. BBT asked three experts in corporate travel for their advice on how best to tackle the supplier rationalisation process.


LESS IS MORE I


For most travel managers, the ultimate aim of supplier rationalisation is to ensure they are getting the best value from their programme. Undertaking rationalisation is a chance for travel managers to understand what suppliers value, learn how to maximise their TMC’s leverage and add value for travellers. Streamlining suppliers isn’t just


about savings – it can help control costs, manage the travel policy more effectively and drive better value from existing relationships. It’s important to remember cost is not the only factor; some clients rationalise suppliers to accord with sustainability credentials or to comply with regulations. Several clients who have used our consultancy services have seen savings of 15-20 per cent compared with the previous year’s spend. Preparation is key. Before going through this process, it’s important


Supplier rationalisation can boost best value in a travel programme, but the process has to secure the support of travellers


ANGELINA BUNTING, COMMERCIAL DIRECTOR, REED & MACKAY


to understand your organisation. Visibility of information is critical as a basis for analysing your suppliers. Before making changes to your programme, you need to know who you are buying from, how much you buy and what it costs.


When it comes to negotiating with suppliers, focus on routes, carriers and hotels where you have a large, mandated spend and leverage your total value to the supplier. Collaboration is key – if you can understand the supplier’s objectives, then everyone can win. Supplier rationalisation isn’t necessarily going out of fashion, but a blended solution is increasingly the way to go. On the air side, the market is incredibly competitive as airlines vie for market share. Your TMC has a great view of all the tactical fares in the market. When these discounted fares are released, they may be able to offer significant savings compared to your negotiated rate.


62


JANUARY/FEBRUARY


2020


buyingbusinesstravel.com


THE TMC


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