Research shows that the travel and entertainment market in the UK is worth more than £30 billion. In fact, in many organisations travel and entertainment is the second or third biggest expense. However, this expense can be controlled and that is what organisations do when they face a downturn – they cut back on corporate travel.
However, travel for business is a must for many organisations. Many procurement professionals are involved in travel services procurement, which can be time-consuming. Not only does procurement have to keep a close watch on prices, but also on the process. This makes travel services procurement in summer holidays, when prices are high, painstaking.
Managing travel services procurement during peak season
During summer holidays, flight tickets and hotel rooms will be high and this can make it difficult for companies to manage their travel spend. However, there is a way that organisations can manage travel services procurement if they have a written policy which allows travellers to plan their travel in advance.
When travel managers have the details of corporate travel in advance, they can work to balance the need of the travellers and also ensure they get the maximum for their travel spend.
Advance booking, especially for air travel, can help make travel services procurement more affordable for businesses. It is prudent to remember that airlines have significant fixed costs to fly a flight. If a flight takes off with too many vacant seats, the airline loses money. So, to ensure there are no empty seats in the future, airlines are more than willing to offer discount to travellers who book in advance. This way, airlines reduce the risk of a flight with empty seats.
Likewise, for hotel accommodation, travel managers can negotiate the rate for hotels for a pre-set number of nights per year. This way, even if it is summer holidays and room tariffs are sky high, corporate travellers will not have to worry about it.
Saving with advance travel purchase
To save money with advance travel booking, an organisation should have well-crafted travel policy as well as the necessary tools to ensure all employees follow the policy at the time of booking their travel. It will help make travel services procurement during summer holidays a cost-effective endeavour.
Steve has over 28 years of success as CPO, MD and Procurement BPO leader in a range of industries. Steve is COO at Odesma, responsible for Odesma’s delivery capability & infrastructure.