Monique Swart finds it interesting – and sometimes fairly alarming – that many companies do not see the importance of consolidating their travel and meetings spend.
There seems to be a belief that consolidation limits choice. This can be true, but what is the cost implication of spreading your spend across a large variety of travel suppliers?
When speaking to hotels, the message is very clear: they tell us frequently that if customers consolidate their accommodation and meetings spend into one budget and present the figures to the hotel suppliers as one figure, then the hotels will be far more inclined to give corporate rates and discounts. But when accommodation is spread across various different hotel brands, and meetings and events are also spread across a variety of properties, then the hotels are less inclined to give better rates as the spend is too diluted and fragmented.
So looking at it in fairly basic terms, if you are spending R100 000 a year on accommodation, but that is spread across 10 suppliers at R10 000 each, the likelihood that any of those 10 hotels will give you a discount is slim to zero. However, if you pick one hotel brand that best serves your purposes and will service you well, the likelihood of them giving you better rates when you put all your spend with them is far higher. Does this limit your choice? Yes, it does. But then you need to weigh up how much choice you need, why you need it and what it is costing you. And having a corporate agreement in place with one brand does not mean that you are bound to them for all eternity. They will need to adhere to a Service Level Agreement and if there are times here and there where you need to look at using a different supplier, then so be it. Remember though that agreements go both ways, so if you stray from your preferred supplier too regularly and start diluting your spend again, thus not delivering on what you projected you will be spending with them, your corporate rate might not look as good when it comes time to renegotiate the following year.
Similarly, we see that many companies still believe that having a selection of travel agents and travel management companies (TMC) is the best way to go as it gives them more choice. No it doesn’t. All it gives you is a variety of travel agents all quoting on the same flights, hotels and car rental options. And it also gives you a headache trying to deal with a host of different agents and spending far too much time shopping around. In a business environment that now operates at an ever-increasing 24/7 pace, never before has the saying ‘time is money’ been more accurate. Yet companies would rather spend this time shopping around comparing quotes, which often differ only slightly, than choose one trusted travel agent or TMC to service them well and help them save on their overall travel spend. This is where the real savings happen, not in the pennies and cents that make up the travel agents fees.
Relationships go both ways and there is still place for loyalty, even in a highly competitive business environment. No matter what industry you are in, give some thought to your own clients. How do you feel about those that spend small amounts with you every now and then and that you know also support your competitors? Do you bend over backwards for them or not so much? I am guessing not so much. Or if you do, it is probably grudgingly so. How about clients that have been with you for years, give you large amounts of business, speak to openly when they have a product- or service-related problem and are loyal to your brand and people? Would you drop everything to look after them, give them great service and discounts where deserved? For sure. So now think about how your travel suppliers and agents think of you. Which category do you fall into?
If you want better service, higher levels of expertise and more access to cost savings opportunities, then become a better customer. Pick a handful of brands to support, get your data sorted out, consolidate your spend and then nurture those relationships to truly reap what you sew. And guaranteed, you will sew the great service you are looking for, while saving a heck of a lot of money along the way.