In today's ever-evolving business landscape, where remote work and digital tools have revolutionized how we operate, the importance of in-person meetings cannot be overstated. Face-to-face interactions continue to be a crucial element in driving revenue growth, allowing organizations to effectively convey their key values, strategies, and products to their audiences. Recent statistics on business travel recovery highlight the significance of these interactions in fostering strong connections.
However, the current business environment presents new challenges when it comes to travel procurement. The combination of a shaky economy and a surge in travel demand has resulted in significant limitations within contract negotiations. As businesses strive to do more with less, travel budgets may undergo changes or reductions, necessitating a recalibration of procurement strategies to match the moment.
To help you navigate this landscape and optimize your travel procurement, we recommend reviewing the following strategies: focusing on sourcing, spend optimization, contract management, and adapting to the evolving bleisure and remote work policies.
Smart Sourcing
Multi-Year Savings
When negotiating contracts with travel suppliers, consider exploring multi-year options to uncover opportunities for additional savings. By committing to longer-term agreements, you can gain leverage and establish partnerships that contribute to continuous improvement plans aligned with your budget goals. These actions can significantly impact your company's bottom line.
Focus on Volume Pricing
In the face of mergers and acquisitions, it's important to evaluate how these changes may impact your travel program. If your company is opening a new location, proactively inform your travel suppliers to collaboratively determine short-term changes in volume, pricing, market share, and other factors that could be affected. By keeping your suppliers informed, you can navigate these transitions more effectively.
Combine Hospitality Segments
Travel managers can employ a robust short-term travel strategy to recoup the loss of negotiating power. You can regain leverage and strengthen your position during negotiations by consolidating all hospitality segments, including meetings, groups, and extended bookings into a single Request for Proposal (RFP). This approach is particularly crucial as diverse work structures reshape how hospitality services are procured. Innovative procurement strategies are needed across the board to increase savings and stay within budget.
Optimize Spend
Deal Consistently with Real-Time Data
Streamline your booking and payment processes by utilizing a centralized software system like BNW VoyagePro. A consolidated book and pay feature within your online booking tool (OBT) reduces risk, enhances transparency, and provides a comprehensive view of your travel expenses. Real-time data enables you to make informed decisions and ensures compliance with your travel policies.
Utilize Pre-Trip Approval
Implementing a pre-trip approval process allows you to control costs effectively. By pre-approving travel expenses, you can prevent out-of-policy spending that strains your budget. This practice also supports traveller wellness and confidence, which are increasingly important considerations in today's travel landscape.
Efficient Invoice Management
Efficiently managing your invoices is essential for cost optimization. Ensure that invoices can be easily accessed through your technical platforms, allowing for quick and accurate review of spending data. This enables you to identify any careless spending, take proactive measures to prevent unapproved spending, and maintain control over your budget.
Improve Technology Interface for End Users
When evaluating innovative technologies for your travel program, prioritize user-friendly interfaces that cater to the needs of your employees and management. An efficient and intuitive user experience within your travel stack, including a customized Online Booking Tool (OBT), delivers the best rates and simplifies the booking process. Consider the size and scope of your organization and individual and group travel requirements when selecting a technology solution.
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Contract Management
Supplier Contract Exclusions
Where possible, aim for contract terms that apply consistently across your travel program. In the travel industry, core alliances and franchise-based business models are common. Request exclusion lists from your travel suppliers and evaluate how these terms will be honoured throughout the relationship. Assess the number of transactions that will occur in specific locations and ensure that the contract terms align with your requirements.
Business Advancement Plan
Engaging in regular program reviews with your Travel Management Company (TMC) provides an opportunity to assess performance and plan for the future. Evaluate your program's performance over the past several years and discuss improvements going forward. If there are specific cost drivers that require evaluation, collaborate with your TMC to analyze the current position, compare it to industry benchmarks, and provide recommendations for improvement. Consider the impact of proposed changes and estimate the associated costs and potential disruptions to travel stakeholders.
Bleisure & Remote Work Policies
Embrace Bleisure
Bleisure travel, which combines business and leisure components, has become increasingly popular. The rise of hybrid work models presents an opportunity for organizations to explore and support combined business and leisure travel. Evaluate how bleisure impacts your travel program by determining the number of employees extending their business trips and the frequency of such occurrences. Consider the expenses covered, methods for indicating business versus leisure expenses, and how negotiated programs can be utilized for leisure activities. Leveraging bleisure travel can contribute to your overall volume and provide opportunities for future negotiations.
Monitor Cost Savings with a Trusted TMC
Engaging with a trusted Travel Management Company, such as BNW Travel, is essential for implementing financially viable procurement strategies. Their expert advisors provide comprehensive reports and valuable insights to measure cost savings against cost avoidance. With their guidance, you can leverage supplier relationships, optimize contracts, and achieve maximum value from your travel program. Direct Travel's goal is to help you capitalize on contracts to drive cost-effective and successful corporate travel programs.
By implementing these procurement strategies and adapting to the evolving landscape, you can navigate the challenges of travel procurement and optimize your corporate travel program. BNW Travel Management is your trusted partner in this journey, providing the expertise and support needed to achieve your travel objectives.
