Travel Procurement 411

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Travel Procurement 411
NBTA CCTE Course Handouts, Part 2
August 23rd, 2009 San Diego
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Presented by Scott Gillespie
(O) 1 440 248 4111 (Eastern Time
Zone) Scott.gillespie2008_at_gmail.com Gillespies
Guide to Travel Procurement http//gillespie411.wo
rdpress.com LinkedIn Profile http//www.linkedin.
com/in/scottgillespie2008
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key success factors
Travel Agency Staffing Stakeholder
Management Travel Policy Analytics
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is critical
your travel management company
Report
Advise
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TMC KSFs
expertise
fits your needs
quality
accurate, timely, helpful
availability
response time, confirmations
flexibility
booking, expense tools
data
accurate, timely, accessible
consulting
effective
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travel policy
key elements of a
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Travel Policy KSFs
consequences
control
card, agency, suppliers
quality
cabins, beds, cars
time
cabins, connections flight windows
cost
guides or per diems, lowest logical fares
claims
receipts, non-reimbursables
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How much share can you really move?
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know your
true
strength
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Travel Policy Discussion

• Which policy elements matter most to suppliers?
• How does a new supplier gauge the real strength
  of your travel policy?
• How well does your senior management understand
  your travel policy?
• What are clever ways they support it?

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intimidating
exception
approval path
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Credit Card
Procurement
Finance
Expense Reporting
Travel Manager
Policy and Communication
Business Analyst
Transient Hotels
Travel Agency
Airlines
Rental Cars
Groups and Meetings
Self Booking
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lots of stakeholders
Senior Management Line Managers Procurement Financ
e HR Travelers
Airlines Hotels Rental Cars, Limos Payment
Providers GDSs and SBTs Travel Agencies Data
Suppliers
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Travel Manager KSFs
relationship
and
project
management
skills
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Supplier Relationship Discussion

• How do you know if you have a good relationship?
• Whats the difference between an OK and a great
  relationship?
• How can you introduce the FU factor into a key
  supplier relationship?

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travel
data
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right
ingredients
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analytical
value
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Analytical KSFs
credible and meaningful
explanations or choices
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Airline Sourcing 101

• Discounts in return for market share
• Airlines watch market share closely
• Discounts depend on
• Scheduled competitive capacity
• Fare mix (proxy for profit margins)
• Ability to move market share
• Lastly, amount of spend

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Airline Supplier Options Under a Weak Travel
Policy

• Continental

Newark
Houston
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Airline Supplier Options Under a Strong Travel
Policy

• Continental

• Delta
• American
• Northwest
• United

Newark
Houston
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dont
over-promise
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scenario modeling
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scenario results
Projected Loss
Projected Savings
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Airline Sourcing Map
Worst
Best
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Airline Sourcing Best Practices

• Consolidated, scrubbed TMC data
• Pre-RFP strategy study
• Airline sourcing map
• Turbo sourcing for mature programs
• Bid modeling
• Goal integrity no overlaps
• Respectful relationships
• Supplier conditioning, if necessary

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Hotel Sourcing 101

• Lower room rates for more room nights
• Data is hard to track, so relationships matter
• Can negotiate at chain or property levels
• Rates depend on
• Nearby competitor hotels
• Annual room night volume
• Relationships (direct, or via TMC)
• Ability to move room nights

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London Hotel Usage
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Slide 1 detail (Arial 44)
From Hotel Mapping
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Slide 1 detail (Arial 44)
To Client-specific Hotel Clusters
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Slide 1 detail (Arial 44)
Including No-Stay Hotels
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Details of Cluster No. 4
56 Compliance
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Which Chain is Best?
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Local vs. Chain Negotiations
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Cluster Benefits

• Actionable Compliance Insights
• Realistic Savings Targets
• Smart Bid Lists
• Relevant Rate Benchmarks
• Sophisticated Negotiations

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Hotel Sourcing Best Practices

• Consolidated, scrubbed data from TMCs and credit
  cards
• Pre-RFP cluster analytics
• Chain and brand capacities
• Local competitive markets
• Smart bid list
• Quick, credible negotiations
• Persistent Implementation