How should travel and meeting suppliers create new value?
12 October 2017 by James Parkhouse
Can 2+2=5? James Parkhouse shares his views on where the next layer of value from travel and meetings suppliers needs to come from.
Capita Travel and Events, and similar organisations, have worked hard to help our customers to save money on their travel and meetings procurement. We’ve helped to significantly reduce spend, year-on-year, through the effective management of rates and availability via our specialist knowledge of the markets in which we work.
At some stage, the law of diminishing returns kicks in and intermediaries can’t keep finding this level of savings each year for companies with mature travel programmes. So what does this mean for those intermediaries which are rightly tasked with showing how they can add value to customers?
A new solution?
I think the answer, at least in part, lies outside of the specific areas and markets that we serve. We need to recognise that travel or a meeting is not an end in itself; people travel and meet in order to achieve an aim or outcome. We – that includes those who buy our services – need to look more closely at why people meet, and therefore travel, and design solutions that enable the most effective purchasing of them.
What do I mean by this? Let me give you an example. In many companies a significant cause of travel and meeting expenditure is for learning and development (L&D). Many sectors, including financial services, telecommunications, retail and utilities, have large internal and external training programmes for employees.
But how many of these have an integrated approach to finding a venue and planning the most cost effective meeting day/time and associated travel as part of the training purchase? I would say very few. What often happens is the supporting activities, including travel, takes place at a different time – often much closer to the training date and arguably at a higher cost than if bought earlier.
When people are planning a multi-day training course, a later start on the first day might enable people to buy cheaper travel tickets. Not to mention that they could be more alert and ready to learn on arrival – supporting the trainer’s end-goal and employee wellbeing.
In many cases departmental thinking exists in organisational departments and buying decisions. Back to my earlier example, L&D sits separately to travel and meetings and is, as a result, bought separately.
Whilst I understand why an organisation might want to have separate teams to run these activities, there’s nothing stopping closer collaboration when buying ‘linked’ services.
2+2=5: the next layer of value
The good news is that the rise in digitisation in businesses is making it much easier to see where this expenditure is taking place. Now the real challenge is in making sure different departments and procurement functions see the potential of linking services to save money and work with forward thinking providers to put the tools and services in place to get at those benefits.
So the next layer of value can come from helping customers work smarter and breaking down silos to get the most value from their budgets.
My contention is that this won’t be achieved through a tradition travel management company (TMC) approach. Aligning with an end-to-end understanding of where savings and value can be achieved, and creating ways for customers to benefit, requires TMCs to move beyond the traditional and deliver the next generation of value to customers and the market.
Interested? Let’s have a chat about your company’s travel, meetings and events objectives - from the stuff that keeps you awake at night, to the everyday experiences of your employees! Call us on 0330 390 0340, or submit your details below.