gillespie’s guide to travel procurement 1 travel procurement 411 nbta ccte course handouts, part 2...

Gillespie’s Guide to Travel Procurement 1

Travel Procurement 411NBTA CCTE Course Handouts, Part 2

August 23rd, 2009San Diego

Gillespie’s Guide to Travel Procurement

Presented by Scott Gillespie

2

(O) +1 440 248 4111 (Eastern Time Zone)

[email protected]

Gillespie’s Guide to Travel Procurementhttp://gillespie411.wordpress.com

LinkedIn Profilehttp://www.linkedin.com/in/scottgillespie2008

mailto:[email protected]

http://gillespie411.wordpress.com/

http://www.linkedin.com/in/scottgillespie2008


key success factors

3

Travel Agency

Staffing

Stakeholder Management

Travel Policy

Analytics


Shop

4

Book Travel Report Advise

is criticalyour travel management company


expertisequality accurate, timely, helpful

availability response time, confirmations

flexibilitydata

consulting

booking, expense tools

accurate, timely, accessible

effective

fits your needs


Shop

6

Book Travel Claim Reimb.

travel policykey elements of a


consequencescontrol card, agency, suppliers

quality cabins, beds, cars

timecost

claims

cabins, connections; flight windows

guides or per diems, lowest logical fares

receipts, non-reimbursables


How much share can

you really move?


know your

strengthtrue


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?

10


intimidatingexception

approval path


Senior ManagementLine Managers

ProcurementFinance

HRTravelers

AirlinesHotelsRental Cars, LimosPayment ProvidersGDSs and SBTsTravel AgenciesData Suppliers

lots of

stakeholders


relationship

projectand

managementskills


Supplier Relationship Discussion

• How do you know if you have a good relationship?

• What’s the difference between an OK and a great relationship?

• How can you introduce the FU factor into a key supplier relationship?

15


datatravel


ingredientsright


explanations or choices

credible and meaningful


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

20


• Continental

Houston

Airline Supplier Options Under a Weak Travel Policy

Newark


• Continental

Newark

Houston

Airline Supplier Options Under a Strong Travel Policy

Chicago Detroit

Memphis

D.C.

Atlanta

• Delta• American• Northwest• United


don’tover-promise


scenario modeling


Projected Loss

Projected Savings

scenario results


Projected Loss

Projected Savings

Best

Worst

(No Change)Current mix

Sell B, then A

Sell A

Required Change

High Airline Sourcing

MapSell A and B

Sell B and C


Airline Sourcing Best Practices

1. Consolidated, scrubbed TMC data2. Pre-RFP strategy study– Airline sourcing map

3. Turbo sourcing for mature programs4. Bid modeling5. Goal integrity – no overlaps6. Respectful relationships7. Supplier conditioning, if necessary

27


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

28

London Hotel Usage66 Hotels Used 193,159£ 1,396 138£ 38%Hotel Name Spend Room

Nights Avg. Rate

In Pro- gram?

Lat Lon

Radisson Edwardian Berkshire 24,827£ 137 181£ Yes 51.51447 -0.14851Hilton London Metropole 21,451£ 136 158£ Yes 51.51868 -0.16826Hilton London Kensington 20,240£ 164 123£ Yes 51.50485 -0.21546The Park Lane Hotel 11,151£ 56 199£ No 51.50589 -0.14455Sheraton Park Tower 9,815£ 44 223£ No 51.50205 -0.15936Myhotel Bloomsbury 9,163£ 56 164£ No 51.51875 -0.13175Radisson SAS Portman Hotel 7,237£ 44 164£ Yes 51.5157 -0.15688Radisson Edwardian Grafton 6,951£ 44 158£ Yes 51.52428 -0.13766Charing Cross Hotel 6,028£ 34 177£ No 51.50772 -0.12714Mandeville Hotel 4,400£ 19 232£ No 51.51599 -0.15103Sherlock Holmes Hotel by Park Plaza 4,298£ 25 172£ No 51.5209 -0.15696Hilton London Hyde Park 4,269£ 22 194£ No 51.51013 -0.18908Royal Lancaster 4,041£ 28 144£ No 51.51154 -0.17626Knightsbridge Hotel 3,503£ 42 83£ No 51.49772 -0.16345Howard Hotel 3,331£ 40 83£ No 51.511 -0.11499Jarvis Intl Regents Park 3,263£ 18 181£ No 51.529 -0.16871Hilton London Paddington 3,224£ 30 107£ No 51.51596 -0.17496Piccadilly Thistle Hotel 3,079£ 24 128£ No 51.51031 -0.13218


Slide 1 detail (Arial 44)

From Hotel Mapping…



To Client-specific Hotel Clusters



Including No-Stay Hotels

Details of Cluster No. 4Quality Property Status

Room Nights Spend Avg. Rate

5 Star Hotel 1 NON 10 3,600$ 360$ Hotel 2 PRF 50 16,250$ 325$

4 Star Hotel 3 NON 30 6,600$ 220$ Hotel 4 NON 200 35,200$ 176$ Hotel 5 PRF 600 111,000$ 185$

3 Star Hotel 6 NON 150 24,750$ 165$ Hotel 7 NON 120 20,040$ 167$

1,160 217,440$ 187$ 56 % Compliance

Which Chain is Best?


Local vs. Chain Negotiations

35


Cluster Benefits 1. Actionable Compliance Insights

2. Realistic Savings Targets

3. Smart Bid Lists4. Relevant Rate

Benchmarks5. Sophisticated

Negotiations

Client-specific Hotel Clusters


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

37

gillespie’s guide to travel procurement 1 travel procurement 411 nbta ccte course handouts, part 2...

Documents

travel procurementslide

travel procurementlocal

hotel mappinggillespies

chain negotiations

compliancewhich chain

hotelsdetails of cluster

scrubbed data