INSIGHTS
3 key considerations for air, hotel, and ground transport sourcing
Travel supplier sourcing is among the most complicated aspects of travel management. The rules of sourcing aren’t always clear, and sometimes they change mid-game. As Jo Lloyd, Global Head of Customer Management & Consulting at FCM notes,
With market conditions changing in both distribution and supplier strategies, it is becoming more challenging to recognise if you are being presented with a good deal or not.
FCM Consulting has created a guide designed to help travel managers better navigate the supplier sourcing world. Let’s examine a few of the key takeaways.
Air contracting: restrictive terms
Many airlines have tightened their purse regarding the discounted rates, what routes are included, and the cost of ancillaries. And NDC throws a whole other wrench into the process.
Before entering negotiations, you’ll need to come to the table with accurate data and a clear understanding of your travellers' actual behaviour. For instance, if certain airlines offer free Wi-Fi to reward members automatically, you might eliminate this from your list of necessary ancillaries.
Within negotiations, you may also consider loyalty benefits, which can drive traveller satisfaction, and sustainability commitments, which can support corporate social responsibility initiatives. These factors can benefit your business beyond mere savings.
Hotel contracting: control leakage
In our research, hotel leakage can be significant. When you are negotiating with inaccurate numbers you can’t get the best deal. There are ways to curtail out-of-channel hotel bookings, like changing your policy not to allow reimbursements made outside your online booking tool or with an agent/arranger. Leakage also goes beyond the numbers and impacts your traveller tracking and the safety of employees.
For organisations that conduct frequent meetings and events, incorporating meetings and events into your hotel sourcing strategy can significantly enhance your negotiating power and drive additional value.
Ground transport: consider your regions
Your ground transport contracts will vary significantly depending on your global footprint. Regional infrastructure will determine your optimal mix of cars, rideshare services, and trains.
Train contracts vary drastically based on location and usage. For example, solid train contracts could benefit you if you are based in the Northeast Corridor in the U.S. and regularly do business in those cities. This goes for the United Kingdom and mainland Europe as well. But if you’re contracting for Latin America, you can likely leave trains out of the mix.
Similarly, taxi and rideshare considerations require city-specific knowledge, and electric vehicle (EV) rentals can vary widely based on region and supplier.