Even though the last few years have seen a global pandemic and an unsure economy, business travel is in full swing, with it anticipated to reach a historical high in 2025.
According to a GBTA forecast, global business travel spending is projected to reach a massive $1.7 trillion USD this year and even surpass $2 trillion by 2029. This steady outlook suggests corporate travel procurement could see related tasks crawling even higher up their growing to-do lists.
Whether a company is large or mid-sized, or even at the start-up stage, having travel supplier relationships that are solid can reduce operational risks, improve value, and lead to reliability and consistency when it comes to trips.
What is the role of procurement in business travel?
When it comes to business travel, those in corporate travel procurement have a tall order as they must combine compliance, efficiency, sustainability and traveller satisfaction with business needs.
It comes down to balancing several aspects, with each having many tasks within it to succeed overall. In the context of business travel, procurement leaders may have to negotiate corporate rates and build relationships with airlines, hotels, and agencies, while balancing budgets, savings, sustainability metrics, and finding the right travel management companies to work with.
It’s a difficult position to be in as corporate travel can be fast-moving, with new tools popping up in the industry, and the business having last-minute trip decisions to make. It’s also often highly dependent on the behaviour of employees and choices from decision makers.
Six ways corporate travel procurement can improve supplier partnerships
When done right, procurement leaders can streamline the corporate travel process by improving travel supplier relationships. Here are some of the ways this can be achieved.
1.Auditing suppliers and setting clear expectations
When working with travel suppliers, regardless of how long they’ve been connected to the business, it’s important to establish expectations and decide on an audit process.
Through auditing, procurement is then able to quickly see insights into how the contract is being upheld, whether the services are being delivered, and to what extent. This should be done against some specific KPIs which have been previously agreed upon in the negotiation process.
Having these expectations in place from the outset means there are no grey areas when deciding whether the relationship is working well or if changes need to be made.
2. Creating a centralised reporting structure
Sometimes, a procurement leader may find themselves working in a silo due to the nature of the business, but cross-department collaboration is an easy fix for making the whole process more enjoyable for everyone involved.
When other teams, like HR and finance, also have access to a centralised reporting structure and system, it means real data can be used to strengthen supplier relationships. If you work in procurement, spotting duplicate or unnecessary bookings can be a frustrating task when items have been approved by other departments, which is why it’s advantageous to have the relevant people come together and be able to utilise the same system.
This should result in greater oversight into spending, policy compliance and bookings, with this data then able to be shared in negotiations with suppliers.
Some of the information you should have clear visibility over includes: total travel spend (by department), average cost, spend by supplier, off-policy bookings, corporate travel volume, route and/or destination trends, and advance booking times.
The structure should also be home to information about the supplier’s performance, which can be used to improve aspects going forward. When this information is relayed back to the supplier, it can lead to improved accountability and an awareness of changes that need to be made.
| Supplier Performance Metrics | What to track: |
| Performance |
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| Reliability and Issue Resolution |
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| Contract |
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3. Create a standardised process for consistency
When the reporting and auditing process becomes commonplace, having a standardised system for all travel suppliers will be another tool for streamlining these relationships.
A travel management system, for example, can help you to store the relevant information about the chosen suppliers, the contract details, and how best to work with them.
It should also be within this system that several stages are included to speed up administrative tasks like approving trips, invoicing, and reporting.
3. Aim to build long-term relationships with travel suppliers
When a more attractive deal pops up, it can be tempting to switch between suppliers depending on the cost, but this can lead to fragmented short-term relationships. Every time a new deal is signed or a booking made, the onboarding process has to begin again and both sides have to learn each other’s systems and expectations.
This is why a long-term supplier relationship can lead to greater consistency and efficiency, as they will already have the information they need, and they can become strategic with their offerings for the business.
Over time, these relationships can be useful in negotiating contracts as they could provide exclusive offers, terms or flexibility for long-standing clients who they wish to retain. After all, some research shows that acquiring a new customer can cost more than retaining an old one.
4. Sharing sustainability goals with suppliers
As a procurement leader, you have a lot to balance, but you shouldn’t be feeling the weight of every responsibility. Sustainability is an area which requires collaboration between the business, suppliers, and even employees.
When you make your company’s sustainability goals known to your wider network, it can become a more concrete part of the plan. For instance, urge suppliers to introduce you to their greener travel options or ensure they provide carbon emissions tracking. When they know this is a focus, they can offer more eco-friendly options or improve their services to match your goals.
5. Encourage open communication with the supplier and seek feedback
While being in procurement will allow you to see the overt hiccups, only the business traveller embarking on the trip will have firsthand experience with what worked well and what didn’t.
This is why seeking feedback from stakeholders and team members who are partaking in corporate travel is important, even if you’ve been collecting the numerical data. Not only will this help employees to feel as though their opinions and preferences are being heard, but the information gathered can help the suppliers tailor their services and output more specifically to the business.
When the feedback has been collected, whether that be through post-trip surveys or check-ins, it should be discussed with the supplier (without disclosing the personal information from team members). It may not be a case of being armed with a long list of complaints, but could be recurring praise or developing a plan for different situations.