5 things corporate buyers should know before negotiating with suppliers
Maximising corporate travel costs is a given for any company, and one of the ways to ensure efficient cost management is negotiating with suppliers- from air, hotel to ground transportation. For your organisation to achieve a tight travel business travel programme, negotiating competitive airline and hotel accommodation contracts with suppliers is key.
Key stakeholders including procurement heads know that securing the best rates and service levels supports your business goals. So, it’s vital to approach these strategic negotiations armed with all the information you need to achieve a tactical outcome.
Before you sit down at the negotiation table, here’s what you should consider before locking in supplier agreements.
1. Review your data
Gather and analyse your organisation’s travel data. Get a clear view of how much are you spending, where are your travellers going and the frequency of business travel. Also, get insight into which airlines or hotels are used most frequently.
2. Be clear with your objectives
Before you engage any supplier, define your goals and priorities. Is it cost savings, service quality, sustainability, traveller experience, or a mix of all four!
3. Get a hang of current market rates
The travel landscape has changed. Supply chains are tighter, demand is fluctuating, and much more. Stay ahead and try to benchmark supplier rates and performance, if possible, keep a tab on offers and know industry trends such as NDC for airfares.
4. Think beyond price
Of course, price matters, but at the cost of what? Look for value that is a combination of cost, reliability, support, and traveller satisfaction. You can brainstorm on SLAs, flexibility with changes and cancellations, technology integration and reporting capabilities.
5. Be flexible in approach
Long-term contracts may sound lucrative, but always be open to timely reviews and avoid overcommitting. Business travel has become more fluid. What works today may not work in six months. Negotiate with flexibility in mind and think of clauses for renegotiation if volumes shift.
How can a travel management company help?
Your travel management company can offer the big picture. A TMC can do a deep analysis of your travel programme and identify saving opportunities by looking at your organisation’s travel volumes and patterns. TMCs also give future travel forecast that can give your organisation’s negotiations added leverage.
Take your travel programme to the next level. Talk with our experts.
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