Key Takeaways

•    Build a comprehensive travel profile to guide supplier selection
•    Use RFIs and RFPs to gather competitive intelligence
•    Negotiate contracts that balance cost savings with service quality
•    Monitor supplier performance through clear KPIs
•    Foster collaborative partnerships for continuous improvement
 

1 - Defining travel needs

Jo Lloyd, Global Head of Account Management and FCM Consulting, emphasises the keys to strategic supplier sourcing. "It's important to find cost effective suppliers, but there's more to it. Strategic sourcing for business travel is about forging resilient, flexible partnerships that can adapt to changing business needs and global circumstances."

‘Cheap’ doesn’t always win. Strategic sourcing often requires the right balance of many different business considerations, including:

  • Cost savings and efficiency
  • Quality assurance and accuracy
  • Risk mitigation and safety
  • Compliance and policy control
  • Corporate traveller satisfaction

Let's explore the key steps required to create an effective business travel sourcing strategy.

Understanding corporate travel requirements

Before diving into the search for a suitable supplier, it's crucial to evaluate your company's travel needs thoroughly. This involves:

  • Analysing current travel patterns and frequencies
  • Identifying key destinations
  • Understanding travel and accommodation preferences
  • Recognising specific service requirements (accessibility, sustainability)
  • Examining current and potential expenses 

Create a profile of your business travel programme that captures all these elements, serving as a roadmap for your sourcing journey.

Creating a comprehensive travel profile

How do you build a travel profile for your organisation that can serve as the backbone of your sourcing strategy? A business travel profile helps you create supplier selection criteria and minimum requirements based on your needs, capabilities, and resources.  

Felicity Burke, APAC Director at FCM Consulting, emphasises that this profile needs to be as detailed as possible, so your prospective travel management companies can gauge the best solutions, and travel suppliers understand your 'worth' to them. "A well-crafted travel profile is like a roadmap for your global sourcing journey," says Burke. "It not only helps you identify potential suppliers but also enables those suppliers to tailor their offerings to you. This level of detail can lead to more meaningful partnerships and better programme value.”

Your comprehensive travel profile should include: 

Travel patterns and volume

• Domestic versus international split
• Frequent destinations and routes
• Peak travel periods
• Recurring events or conferences

Traveller demographics

• Department breakdown
• Executive and VIP requirements
• Accessibility needs
• Dietary restrictions

Current supplier landscape

• Existing airline, hotel and ground transportation agreements
• Alignment between traveller preferences and current contracts
• Performance gaps or opportunities

Budget and spend

• Total travel budget and allocation
• Per diem rates and expense limits
• Cost centre breakdown

Policy framework

• Booking restrictions and approval processes
• Flexibility and exception handling
• Compliance requirements

Technology infrastructure

• Online booking tools
• Expense management systems
• TMC platforms for reporting and risk management
• Integration requirements

Sustainability commitments

• Corporate environmental targets
• Green travel preferences
• Carbon reduction initiatives

Duty of care approach

• Risk management protocols
• Traveller tracking requirements
• Emergency response expectations

Payment and reporting

• Preferred payment methods
• Invoicing requirements
• Data and analytics needs

2 - Travel supply chain market analysis

Conduct a thorough market assessment to make informed decisions about your strategic sourcing. Ashley Gutermuth, FCM Consulting lead in Americas, advises that "a comprehensive market analysis is the foundation of successful sourcing. It's not just about knowing what's out there, but understanding how different suppliers can meet your specific needs and add value to your travel programme."

Researching potential suppliers

Business travel supplier sourcing, including selecting your travel management company, takes market research and analysis. This typically involves identifying industry trends and best practices as well as gathering competitive intelligence. Lean on industry resources such industry directories, trade shows, events, and professional networks that can help you learn more about the supplier landscape.

Once you’ve finished supplier identification, you can use tools to help you narrow down your choices and find the best approach and evaluation criteria for soliciting bids.  

Utilising RFIs (Request for Information) or RFPs (Request for Proposals)

A leading approach is to issue a Request for Information and a subsequent Request for Proposal to multiple suppliers. The RFI or RFP is designed to obtain information that includes:

  • Capabilities
  • Service offerings
  • Compliance with corporate travel requirements

Read a more detailed guide to RFPs and how to modernise the process.

Jo adds: "The RFI process is a critical step in supplier evaluation, but it's important to remember that your approach should be adjusted to your specific needs and current market conditions."

3 - Evaluating and selecting travel suppliers

Once proposals arrive, it's time to separate genuine partners from glossy brochures.

Setting evaluation criteria

Use your travel profile to create weighted scoring criteria. Consider:

  • Cost competitiveness: Base rates, volume discounts, value-added services
  • Service quality: Response times, problem resolution, traveller support
  • Reliability: Financial stability, service capacity, track record
  • Compliance: Policy enforcement tools, reporting capabilities
  • Technology: Platform functionality, integration ease, user experience
  • Sustainability: Environmental initiatives, carbon reporting
  • duty of care: Risk management tools, emergency support, traveller tracking

Going beyond the proposal with demos and site visits

Don't rely solely on written responses. Request:

  • Clarification interviews: Dig deeper into unclear or incomplete answers
  • Product demonstrations: See platforms and tools in action
  • Site visits: Assess operations and service standards firsthand
  • Reference checks: Speak with current clients about real-world performance

4 - Negotiating supplier contracts

Once you've identified your preferred suppliers, it’s time to enter into negotiations.

Strategic sourcing negotiation

Aim to forge a true partnership in negotiations that maximises value for you and your suppliers. Jo advises to "approach the strategic sourcing process with a collaborative mindset, ready to understand your supplier's perspective as well as assert your own needs. This balanced approach often leads to more innovative solutions and stronger long-term vendor relationships."

Key contract negotiation considerations include:

  • Cost Structures: negotiate beyond base rates, exploring volume discounts, loyalty rewards, and value-added services.
  • Service level agreements (SLAs): clearly define expectations for service quality, key performance indicators (KPIs), response times, and problem resolution.
  • Flexibility: allow for adjustments based on changing travel volumes or patterns.
  • Technology: ensure suppliers will integrate with your existing tools and processes.
  • Sustainability and duty of care: discuss how suppliers can support your green travel initiatives and traveller safety measures.
     

Finalising global sourcing agreements

Felicity emphasises that "a well-crafted contract provides clarity and security for both parties, while also allowing for the flexibility needed in today's business world. It's worth taking the time to get it right."

When formalising partnerships, focus on creating clear, comprehensive contracts that:

  • Explicitly state all agreed-upon terms, avoiding ambiguous language.
  • Outline detailed service expectations, including SLAs and associated metrics.
  • Specify performance measurement methods and reporting frequency.
  • Clearly state pricing agreements and payment terms.
  • Include term and termination clauses, as well as dispute resolution procedures.
  • Define the process for proposing and implementing changes to the agreement.

By focusing on these elements in your negotiations and contract finalisation, you'll set the stage for strong, productive, long-term supplier relationships.

5 - Supplier relationship management

Selecting the right suppliers is just the beginning. To truly maximise the value of your travel programme, ongoing management of supplier relationships is crucial. This involves regular performance monitoring and a commitment to continuous improvement.

Remember, your suppliers are not just service providers – they're key partners in achieving your travel management goals. Investing time and effort in these relationships can yield significant benefits in terms of programme performance, cost efficiency, and traveller satisfaction.

Ongoing performance monitoring

Regularly assessing supplier performance is essential to ensure they continue to meet your organisation's needs and contractual obligations. Here's how to approach this:

  1. Establish key performance indicators (KPIs) for metrics like cost savings, service quality, performance, problem, resolution, traveller satisfaction, and policy compliance.
  2. Use your travel management company’s reporting and data analytics tools to gather and analyse supplier performance data on a monthly and quarterly basis.
  3. Schedule consistent review meetings with key suppliers. Use these sessions to discuss performance trends, address any issues, and align on future objectives.

Ashley notes that "consistent performance monitoring isn't just about catching suppliers who aren’t performing. It's about creating a shared understanding of what's working well and where there's room for improvement."

Continuous improvement and collaboration

A successful supplier relationship should be a partnership that focuses on ongoing improvement and innovation. Here are some tips to help you achieve this:

  • Maintain open communication, establishing regular check-ins with key suppliers.
  • Regularly solicit feedback from travellers and travel arrangers regarding supplier performance. Share this feedback with suppliers.
  • Address issues promptly, establishing clear processes and channels for feedback, issue escalation, and resolution. Encourage suppliers to be proactive issue resolution.
  • Innovate! Partner with suppliers on new approaches and invite them to share ideas or technologies that could benefit your travel programme.
  • Align with suppliers to understand and respond to industry trends, then collaborate on strategies to address them.
  • Recognise suppliers who consistently perform well and consider incentives for suppliers who exceed performance targets.

According to Jo, "the most successful travel programmes happen when buyers and suppliers work as true partners. Fostering a culture of continuous improvement and open collaboration helps achieve cost savings, drives innovation, and ultimately improves traveller experience."

Achieving procurement excellence in corporate travel 

Strategic supplier sourcing directly impacts your bottom line and traveller experience. Getting it right means better service standards, smoother booking processes and more reliable on-trip experiences.

Frequently Asked Questions

  • Why does event destination matter for attendance?

    Event destination matters because attendees weigh up the effort, time and return on investment when deciding whether to attend. A desirable or unique location can transform a professional obligation into an anticipated experience, driving higher attendance and engagement.

  • What factors should planners consider when choosing an event destination?

    Planners should consider strategic alignment with event objectives, logistics and accessibility, organisational risk appetite, the excitement factor of the destination, and the planned length of the event. Budget, safety, flexibility, and on-the-ground support are also critical factors.

  • Are local or international destinations better for corporate events?

    It depends on your objectives and audience. International destinations create buzz and exclusivity, making them ideal for incentives and celebratory events. Local destinations remove logistical friction, reduce travel time, and boost turnout for time-poor audiences, making them suitable for efficiency-focused meetings.

  • How can planners balance cost and destination appeal?

    Planners can balance cost and appeal by aligning destination choice with event objectives, considering local options that offer unique experiences, negotiating flexible booking terms, and choosing destinations with strong infrastructure and on-the-ground support to minimise risk and unexpected costs.

FCM Consulting can help 

Is it time to evaluate your supplier sourcing strategies? Are they delivering the results you expect? FCM Consulting's team of business travel supply chain experts handle every aspect of supplier sourcing, ensuring you get the best value and service for your corporate travel programme. Contact us today to supercharge your business travel supply chain.