The traveller is the key

The traveller  is the key

Savings? Are hardly expected in hotel negotiations. Yet still in demand-side management, compliance and focussing on the needs of the traveller. This according to most travel managers, studies say. A study of ACTE conducted by HRS shows, however: There is hardly enough time, due to extensive negotiation. 

In the beginning it was a question of strategy. More precisely: the question of whether travel managers are actually strategically positioned in 2016 as before the annual deadline. For this reason, HRS, together with the Association of Corporate Travel Executives (ACTE), questioned 350 travel buyers in the USA, Europe and Asia: Are services measured according to cost savings? Or on additional value that they yield for the company?

That both factors clearly carry weight was not really surprising. Paradigm shifts don't happen overnight. Yet a contradiction in individual estimates, or rather details is noticeable; how often a strategically formulated ideal goal is undermined by the primacy of the operative reality. Because although the overwhelming majority actually knows that hotel negotiations regarding savings are largely exhausted – 45 percent already believe they have reached the end of the line – they still spend 88 percent of their time mainly in negotiations with suppliers. 

Kirsten Semmler • Adobe Stock
Kirsten Semmler • Adobe Stock

Savings remain Priority Number 1:
A similar paradox can be found in results regarding strategic goals. Since there hardly any more savings can be expected, the focus of international travel management has become the traveller himself, or rather his behaviour when travelling. Thus 84 percent of those surveyed want to generate savings in future by demand management and compliance; 75 percent rate better services for the traveller as a tried and true method to actually reach savings aimed for. 

Yet although there is broad consensus that successful inclusion of the traveller, mainly by optimising already existing processes (62 percent) and decreasing traveller complaints (69 percent) can be measured – via strategic decisions – count as a measure of the success or failure of travel management with the still "classical" targets: 78 percent of those questioned must still produce proof of savings of "direct costs", 71 percent counts in a well running booking programme as performance indicator. A rise in traveller approval and with that fewer complaints only take a back seat position of 59,9 percent on the list of priorities.
The fact that a strategic direction of operative tasks placed on an external partner can ease the burden on travel management, is demonstrated by results revolving around the subject of hotel negotiation. In answer to the question of what causes general failure in hotel negotiations, 58 percent of travel managers said the rise of hotel rates, 42 percent said there wasn't enough time or employees, respectively and still 40 percent put the blame on the entirely missing or lack of response from the hotel side. Above all are the time aspects that prevent a travel manager to negotiate optimally. 

A completely different scenario is shown by those who have managed to outsource no longer valuable and time consuming services. These travel managers show two to three times fewer problems with rising costs or delayed answers, because the appropriate benchmark data and a global hotel portfolio allow the targeting of cost-effective houses and requests which can also be controlled via specific RFP platforms. To phrase this differently: Because these travel managers are free from the recurring problems that plague their colleagues, they can concentrate on strategy – in this case the management of the traveller. Remember the catchword: Traveller centricity.

Kirsten Semmler • Adobe Stock

Getting self-booking customers to book smartly
A remarkable fact is that nearly no respondent expected consideration of individual travellers' needs to lead to a cost explosion. On the contrary: 72 percent expected an improvement in service and no higher expenses and/or travel costs. A possible explanation for this is offered by a Canadian travel manager: "There are still ways to save and a lot of leeway to make self-bookers book smarter." says a participant during an ACT conference in April. "But that won't work without specific training."

Of course travel management still has quite a bit to learn as well. That is to say until now only somewhat less than half of all those questioned measure how satisfied their travellers are with their hotel and everything pertaining to it. If we look at aspects of process, the booking process and that of travel expense accounting, this pertains to only every fifth or even every tenth company. In addition, only two thirds have a formal query process. If processes are to improve, then those who use these processes must be questioned as well. This is the conclusion of the ACTE conference panel, whose results were presented in April. The entire study is available as a download to be had at corporate.hrs.com/acte.