Category Management Travel Category Kathy Briski C P
Category Management Travel Category Kathy Briski, C. P. M. , GTP October 18, 2018
Global Procurement Processes Source: www. strategiccomputing. ie ; www. accenture. com
Key Category Management Principles Category Management Cross Functional Team Approach Facts And Data Strong Supply Market Knowledge Corporate Governance Source: http: //www. procurement-academy. com Page: 4 Stakeholder Engagement Transition to Success
Travel Category Profile Drives the Strategy Internal and external drivers are used to develop the subcategory strategies Internal Profile External Profile • Understand internal business drivers and budget forecasts • Survey internal stakeholders to help define category priorities. • Analyze total and sub-category spend • Define category characteristics • Analyze TCO drivers and levers • Evaluate external market capabilities and availability • Understand the predominant business models by subcategory • Match the supplier base to the required activities • Identify key industry trends which affect cost and service • Perform competitive Market Analysis Category Strategy • Sourcing sub-categories with market intelligence and benchmarking for negotiations with incumbents or RFP via traditional bid process • Perform demand management analysis in key maverick spend areas determining a plan of action for behavioral movement, either through better booking choices or utilizing Grace’s preferred travel agency • Capitalize on the implementation of Global Expense Reporting Solution (GERS) for compliance which is an integral part of our ongoing category management system
Travel Category Profile Internal Profile
Internal Profile - Spend The scope of the project includes all global spend within Company. Total Spend: $XXXM Observations • Total spend was obtained using a combination of travel agency data, commercial card data (corporate card, Pcard, and PO System • Date range used was December 1, 2015 thru November 30, 2016, • The majority of spend for airline, hotel and car rental is in North America • Some meeting/events spend is reflected in the commercial card total, and possibly in the hotel spend, but not in airline and car rental spend. • Meeting/events spend is understated due to decentralized program • Divisional Breakdown (based upon Travel Agency data): • Division 1 - Airline 55%, Hotel 47%, and Car Rental 58% • Division 2 – Airline 31%, Hotel 33%, and Car Rental 27% • Corporate – Airline 14%, Hotel 19%, and Car Rental 15%
Internal Spend Profile - Airline Spend by Business Unit (PNR Data) [CATEGOR Y NAME] [VALUE] Top Ten Airlines by Spend (PNR Data) [CATEGOR Y NAME] [VALUE] 160 140 $ in Millions 120 [CATEGOR Y NAME] [VALUE] 100 80 60 40 20 DL Advance Ticket Purchase(ATP) (PNR – Tickets) [CATEGOR Y NAME] [VALUE] 21+ Days [VALUE] [CATEGOR Y NAME] [VALUE] UA AA BA AS WN LH Airlines QF VS Misc Total Observations: § Approx. 70% of spend is with the top 10 airlines with rest of spend spread across multiple airlines § Top carrier is Delta Airlines with United Airlines second § Alaska and Virgin America has recently announced plans to merge § Company currently has XX airline agreements and do not “favor” one airline over the other § ABC books 50% of the airline tickets and DEF books 25% of the airline tickets § In 2015, travelers were booking 35% of the time less than 14 days in advance. Furthermore, 30% of bookings were made 21 day+ out which could lead to changes by the travelers. § Opportunities exist in performing city pair analysis and further Advance Ticket Purchase (ATP) analysis. Note: PNR = Passenger Name Record (Booking Data)
Internal Spend Profile - Airline Domestic Vs. International (PNR Spend) Class of Service – Domestic (PNR – Tickets) [CATEGOR Y NAME] [VALUE] 100. 00 $ in Millions 80. 00 [CATEGOR Y NAME] [VALUE] 60. 00 [CATEGOR Y NAME] 65% 40. 00 20. 00 Economy Coach Business [CATEGOR Y NAME] [VALUE] First Class of Service – International (PNR – Tickets) Observations: [CATEGOR Y NAME] [VALUE] § Approx. 45% of spend is booked domestically while 55% of spend is international. § For Domestic bookings: 65% of tickets booked by travelers are in restricted economy (low fare coach), while 10% are booked in unrestricted coach (refundable). An additional 15% were booked in business but this is misleading since these tickets are connections internationally. § For International bookings: 90% of tickets are booked in business class, however some travelers are booking in economy or coach class. § Savings opportunities exist to reduce the fully refundable coach tickets to restricted coach and to review policy on international business class. § In addition, Boeing is working with airlines to provide reports on ancillary spend. Note: PNR = Passenger Name Record (Booking Data)
Internal Spend Profile - Hotel Spend by BUGHI (Expense Data) [VALUE] Top 10 Domestic Hotel Chains by Spend/Rooms (PNR Data) [CATEGOR Y NAME] [VALUE] 60 [CATEGOR Y NAME] [VALUE] $ in Millions 50 [CATEGOR Y NAME] [VALUE] 40 30 20 10 0 Hilton Marriott $ in Millions Top 10 Int’l Hotel Chains by Spend/Rooms (PNR Data) Hyatt Starwood IHG Hotel Chain Other Total Observations: § Total Hotel spend is $64 M, Domestic - $50 M International - $14 M § The majority of spend is with the top domestic and international Hotel Chains, such as Hilton, Marriott, Hyatt, Starwood and IHG § XXX Company has 800 hotel agreements worldwide § Currently have 2 global hotel chain agreements: Starwood and IHG § Opportunities may include incorporating other global hotel agreements to cover non-preferred spend (Hilton, Marriott and Hyatt) or incorporate a “rate cap” § Majority of hotel spend is on room rate. Additional amenities such as free breakfast, internet, parking are emphasized in the global RFP. 16 14 12 10 8 6 4 2 0 Hilton Marriott Hyatt Starwood IHG Hotel Chain Other Total Note: PNR = Passenger Name Record (Booking Data)
Travel Category – Internal Spend Profile Lodging Domestic vs. International (PNR –Room Nights) [CATEGOR Domestic: Preferred Hotels (PNR – Room Nights) [CATEGOR Y NAME] [VALUE] Int’l: Preferred Hotels (PNR – Room Nights)* [CATEGOR Y NAME] [VALUE] Observations: § Of the total nights booked 80% of total nights are booked domestically, while 20% are booked internationally. In terms of spend: domestic represents 79% of the dollars, while international spend represents 21% § Travelers are booking preferred hotels 85% of the time domestically and 50% of the time § Opportunity to perform a hotel “cluster” analysis on international hotels and work with travelers to educate them on the preferred hotels or determine if other preferred hotels are needed. Note: PNR = Passenger Name Record (Booking Data)
Internal Spend Profile - Hotel 4. 00 3. 50 3. 00 2. 50 2. 00 1. 50 1. 00 0. 50 0. 00 -P ss ba Em W at er fro tin es W on Hi lt Chain Scale Room Night Segmentation (PNR Data) [CATEGOR Y NAME], Midscale 10% [VALUE] 1, 500 Nights 250 Nights $90 Ave Rate $75 Ave Rate [CATEGOR Y NAME] [VALUE] 4, 000 Nights $125 Ave Rate [CATEGOR Y NAME] [VALUE] 500 Nights $250 Ave Rate [CATEGOR Y NAME] [VALUE] 5, 000 Nights $145 Ave Rate $ in Millions nt y S LAX ui te Do s-S ub T le tre L M e ar -D Hi rio CA lto ttn Lo La nd De on fe ns e. CD G Hy at t PH M ar L rio tt. PH X A SE e- PH an c d- ss na i Gr an HX 14 Re on at Sh er Top 10 Hotel Cities (PNR Data – Airport Codes) 16 X $ in Millions Top 10 Hotel Properties by Spend (PNR Data) 12 10 8 6 4 2 0 PHX SEA LAX STL JFK DCA LHR PHL CDG Other Observations: § Phoenix area is the top hotel stay for travelers, followed by Seattle and Los Angeles areas. § Travelers stay in Luxury hotels 5% of the time (500 room nights, average rate $250), Upper Upscale hotels 45% of the time (5, 000 room nights, average rate $145), Upscale 30% of the time (4, 000 room nights, average rate $125), Midscale 10% of the time (1, 500 room nights, average rate $90) and Economy type rooms 10% of the time (250 rooms nights, average rate $75). § Opportunities exist to lower TCO with hotel chain shift downwards (i. e. : Upper Upscale to Upscale and incorporate a per idem cap in the US. § A further opportunity is to review hotel booked data vs. paid hotel rate. The Concur booking and expense tool will enhance this effort. Note: PNR = Passenger Name Record (Booking Data)
Hotel Chain Scales Chain Scale Brand Name Luxury Upper Upscale Midscale Economy For Domestic Hotel Bookings (2018) : Ø Total Tracked Spend: $XXM Ø 45% of spend in Ex-Upscale Upper Upscale. Average Nightly Rate: $145 Ø 30% of spend in Ex-Midscale Upscale. Average Nightly Rate: $125 Ø Business Travel Ex-Economy News: 2018 Corporate Travel Index: $180
Internal Spend Profile - Car Rental GHI Spend by BU (Expense Data) [VALUE] [CATEGOR Y NAME] [VALUE] Top 3 Suppliers by Spend (Expense Data) 6. 00 5. 00 $ in Millions [CATEGOR Y NAME] [VALUE] 4. 00 3. 00 2. 00 1. 00 0. 00 Car Rental Domestic Spend by Type (Supplier Data) [CATEGOR Y NAME], Y NAME] Refuel 2% GPS 1% [VALUE] 250 Nights $75 Ave Rate [CATEGOR Y NAME] [VALUE] Avis Enterprise Hertz Observations: § § Car rental expense reimbursements amounts to $15 M ABC travelers have the majority of spend in this area Top preferred supplier: All 3 suppliers have approx. the same spend Time & Mileage (daily rate for rental car) amount to the majority of cost when renting a car (excluding taxes) which will be the focus of negotiations for the upcoming car rental RFP.
Internal Spend Profile - Car Rental - % of Cars Returned Refueled (Supplier Data) [CATEGOR Car Rental – Charges by Booking Source (Supplier Data) Y NAME] [VALUE] Walkup 20% [CATEGOR Y NAME] [VALUE] [CATEGOR Car Rental – Method of Payment (Supplier Data) Y NAME] [VALUE] [CATEGOR Y NAME] [VALUE] Observations: § Travelers return rental cars refueled 75% of the time § The majority of bookings were done via GDS, on-line booking tool. Other booking occurred directly with the supplier “Walkups” and Web § In terms of payment method, 92% of the bookings were paid by corporate card. § Opportunities exist with utilizing the on-line booking tool and corporate card
Internal Spend Profile - Meals Spend by BU (Expense Data) GHI 5% Top State Spend Other(Expense Data) [CATEGOR Y NAME] [VALUE] Ohio 10% [CATEGOR Y NAME] [VALUE] DEF 40% [CATEGOR Y NAME] [VALUE] Top Merchant Spend (Expense Data) [CATEGORY NAME], [VALUE] [CATEGOR Y NAME] [VALUE] Observations: [CATEGOR Y NAME] [VALUE] [CATEGORY Y NAME] [VALUE] [CATEGORY NAME] [VALUE] [CATEGORY Y NAME] [VALUE] NAME]Duke's $300, 000 New York 20% [CATEGOR Y NAME] [VALUE] Bobby Q $500, 000 AB Catering $400, 000 § The top states are Arizona, California and New York (no surprise). § 2015 analysis indicated that top merchant spend was Starbucks, Durant’s and Bobby Q’s. § Opportunity exists to look at cost over benchmark data and review actual vs. per diem in addition with further analysis and possibly approaching top merchants for Company discount. Moreover, work with Dinova Restaurant Program to ensure that top merchants are approached by Dinova to solicit acceptance into the Dinova Dining
Internal Spend Profile - Meetings/Events Meeting/Event Spend (Expense Data) [CATEGOR Y NAME] [VALUE] SSPN Spend By BU (Expense Data) GHI $2, 000 DEF $8, 000 [CATEGOR Y NAME] [VALUE] Top Suppliers by Spend [CATEGOR Y NAME] [VALUE] [CATEGOR Y NAME] [CATEGOR [VALUE] Y[CATEGOR NAME] [VALUE] Y NAME] Ecilpse [VALUE] $1, 000 $2, 000 Show Produtions $3, 000 [CATEGOR Y NAME] [VALUE] Observations: § Limited spend information. Team doesn’t feel that the spend showing is reflecting the true spend for meetings/events. § Recommend to explore and do a “deep-dive” into meetings/events spend within Company. Determine current process and make recommendations to lower TCO and mitigate risk.
Travel Category Summary of Major Contracts Supplier Corporate Card Description Corporate Travel / Procurement Card Travel Agency Travel management services Airlines Preferred Airlines Hotels Chain Agreements Car Rental Services Booking / Expense Tool On-line Software for booking and expensing travel GDS system for booking travel Airport Parking Risk/Security Airport Parking for Travelers Location of Travelers / Contract Value Term of Contract Agreement End Date Observations • All airline agreements contain no financial commitments. • All hotel sourcing is done yearly thru the hotel sourcing tool. Rates and amenities are accepted via the tool, hence no paper agreements exist and no financial commitments are contained. • Car Rental has not been competitively bid and is on the schedule to be competitively bid this year • All parking agreements contain no financial commitments and cover top cities of Company’s travel pattern
Travel Category Profile External Profile
Airline Industry: Overview 2017 Global Airline Industry: 2017 Revenue estimated to reach $754 Billion. North America is the industry leader. Key Points • 2018 Global Airline Industry revenue estimated to reached $824 Billion. Revenue in Billions Annual Global Airline Industry Revenue $582 $493 $564 $642 $717 $706 $733 $727 $736 • Total airline industry net profit in 2018 will rise to $38. 4 billion, an increase of around 11 percent on the projected figure for 2017. • The bulk of the profit generated next year will come from North America where, according to IATA, airlines in the region are forecast to record a combined net profit of $16. 4 billion. 2008 2009 2010 2011 2012 2013 Operating Revenue $45 2014 2015 2016 Net Income $40 2017 (in Billions) $754 $35 $30 $25 $20 $15 $10 $5 ka as Al es t hw So ut d te ta el D U ni Am er ic an $0 Source: airlines. org, Airline Financials. com, IATA, Wikipedia, Statista. com, Market. Watch. com 2017 • Top five airlines hold an estimated market share of 73%.
Airline Industry: PPI (Producer Price Index) – Scheduled Domestic Passenger Air Transportation The PPI (measures average change in prices over time) for passenger air transportation. Source: http: //www. bls. gov/ppi/ (NAICS 481111)
Airline Industry: Jet Fuel Costs Average Price Per Barrel Fuel is one of the largest contributor to airlines’ operating costs. $140 $120 Key Points $120 $130 $100 $80 $91 • $125 $99 $76 $69 $60 $40 $51 $45 • • $20 $0 2011 2012 2013 2014 2015 2016 2017 2018 • • Sources: Airlines for America: www. airlines. org, www. bts. gov, www. iata. org, ww. statista. com Global airlines reduced their fuel costs in 2017, these costs accounted for only 17. 3% of their expenditures. For 2018: it is estimated at 18. 9% of their expenditures Jet fuel consumption has not increased as much as air travel because airline fuel economy has continued to improve. Air travel fuel economy generally increases as carriers review their commercial fleets to modernize them through purchases or leases of new, more fuel-efficient planes. Current jet fuel pricing is $98. 77 per barrel. Impact on 2018 fuel bill amounts to $47 Billion The Air Transport Association estimates that for every dollar increase in the price of jet fuel (a derivative product of crude oil), US airlines incur an additional $445. 0 million in fuel expenses.
Airline Industry: Air Travel Price Index & Ancillary Fees Air Travel Price Index for JFK, La. Guarda, and White Plains, NY Key Points • The cost of airfare flying out of the JFK has been consistently higher than the national average. White Plains has been higher as well since 2015. La. Guardia, on the other hand, has been consistently below the national average, • Airlines found several ways to grow revenue without raising fares – a la carte pricing: from charging for select coach seat assignments, boarding after elite status members and baggage fees. • 2017 Airline ancillary revenue – ~$82 billion globally, a 22% increase from 2016 The air travel price index measures the percents change over time in prices paid by travelers. Sources: Bureau of Transportation Statistis, Ibisworld. com, Airlines for America: www. airlines. org; Plane Stats. com, Car. Trawler Yearbook of Ancillary Revenue (Idea. Works Company)
Cost of Air Travel Compared to Other Goods and Services Page: 29
GBTA and CWT 2019 Forecast: Airline Pricing Page: 30
GBTA and CWT 2019 Forecast: Top Tips for Travel Buyers Page: 31
Advito 2019 Forecast: North America Airline Pricing Source: Advito 2018 Industry Forecast
Hotel Industry: Overview The US Hotel Industry Revenue reached $166. 5 Billion in 2015. 2017 Global Operating Revenue and Net Income (in billions) Operating Revenue $25 Net Income • The global hotel industry revenue is estimated to exceed $560 billion for 2018 • The US Hotel Industry Revenue is estimated to exceed $200 billion in 2018 $20 $15 • Over the five years to 2020, IBISWorld projects that the industry will continue expanding, with particularly strong growth in the extended-stay hotels, boutique hotels, spa and health retreats and resorts segments. $10 $5 r co Ac tt ya dh yn W H am on ilt H ar rio tt $0 M 2017 (in Billions) Key Points Source: www. IBISWorld. com, Market. Watch. com, Smith Travel Research • US revenue is projected to increase at an average annual rate of 3. 0% to $167. 0 billion over the three years to 2019.
Hotel Industry: PPI – Hotels & Motels, Guestroom Rentals, Full Service The PPI for hotel rooms have continued to climb since 2010 NAICS 721110 All indexes are subject to revision four months after original publication. Source: http: //www. bls. gov/ppi/
Hotel Industry: Overview The US Hotel Industry Revenue reached $166. 5 Billion in 2015. Key Points 2017 Average Hotel Rates • The average daily rate in the US for 2017 was $126. 43 • Top chart represents the monthly average daily rate hotels from 2011 to 2017. • Bottom Chart: Airbnb: Does your Travel Program Allow It? Average daily hotel rate vs Average daily Airbnb rates in 2016(in U. S. dollars) • Hoteliers are looking for ways to sustain their growth as online private accommodations aggregators are flooding the market with new inventory. Marriott, Hyatt, and Wyndham are investing in home-sharing start-ups to combat Airbnb. • For 2019, US hotel prices are forecasted to rise between 1% - 3% • Business Travel News – Average hotel daily cost: $180. 12 New York: Ranked 1 Ø Upper Upscale: $322. 87 Ø Upscale: $335. 91 Ø Midscale: $288. 50 Ø Average Daily Rate: $330. 47 Ø Taxes: $62. 48 Ø Total: $392. 95 White Plains: Ranked 13 Ø Upper Upscale: $191. 99 Ø Upscale: $188. 37 Ø Midscale: N/A Ø Average Daily Rate: $198. 15 Ø Taxes: $26. 50 Ø Total: $224. 65 Stamford, CT: Not Ranked in Top 100 GSA Rate: $127/night Source: Smith Travel Research. com’, Statistic. com, busman. com
GBTA and CWT 2019 Forecast: Hotel Pricing Page: 36
GBTA and CWT 2019 Forecast: Top Tips for Travel Buyers Page: 37
Advito 2019 Forecast: Hotel Pricing Source: Advito 2019 Industry Forecast
SAMPLE Car Rental Industry: Overview Global industry spend is $39. 9 billion of which 26. 3% is business travel. Key Points • • Source: Ibisoworld. com, Auto Rental News, Business Travel News Global industry spend is $39. 9 Billion of which 26. 3 is business travel car rental. 53. 4% is on airport rental and 21. 8% is offairport. Within US, spend is estimated at $28 Billion which was achieved on a smaller overall U. S. fleet size of 2. 187 million vehicles, some 126, 000 fewer units than the industry fleet in 2016. The industry is segmented by business travelers, leisure travelers, car leasing and car sharing Leisure market has grown larger than corporate business market IBISWorld expects industry revenue to expand at an annualized rate of 2. 1% over the five years to 2021 to $47. 9 billion. Hertz and Avis continues to expand offairport locations to compete with Enterprise Investing in technology to compete with car sharing such as Uber and Lyft.
Rental Car Industry: PPI – Passenger Car Rental The PPI for car rental has decreased in 2011 – 2017 but making a small increase in pricing for 2018 NAICS 532111 All indexes are subject to revision four months after original publication. Source: http: //www. bls. gov/ppi /
Car Rental Industry: Market Share The U. S. car rental market is highly consolidated among a small number of major players and is getting smaller. Key Points Top 3 Car Rental Companies By Operating Revenue • Market share: • Enterprise – 35. 5% • Avis/Budget – 15. 2% • Hertzt – 15. 1% • Suppliers offer different brands that focus on specialized markets. $26. 0 Ø Corporate Traveler – On-airport convenience – Hertz, Avis and National 201 Operating Revenue (in Billions) $22. 3 $21. 0 Ø Leisure Market – On/Off-airport Budget, Dollar Thrifty, and Enterprise $16. 0 $11. 0 $8. 9 $8. 8 $6. 0 $1. 0 Enterprise Avis Budget Hertz Source: www. autorentalnews. com; www. ibisworld. com, Business Travel News, 2017 Corporate Travel Index, Market. Watch. com • Additional Non-US regional players include: Ø Europcar (Europe and Asia Pacific) Ø Sixt (Germany and EMEA) • In high risk countries such as India, China, Thailand, Latin America, etc. the business model is to rent a car with driver. Cost is less than a chauffer / limo as a typical rental vehicle is used
Car Rental Industry: Average Daily Rates Key Points • Based upon Business Travel News Corporate Travel Index, the average car rental rate is $47. 02 (including tax, fees, etc) in the US for 2017. • Car rental companies have implemented a variety of new ancillary fees to help preserve some of the lost revenue in recent times, such as tacking on fees to extend a reservation, eliminating 60 minute grace period, or increasing the cost of a two-day rental • “Virtual rental technology” – enables customers to reserve, rent, access and return cars just about anywhere. Zip. Car, We. Car, Connect. • Business Travel News – Average daily cost: $46. 51 which makes up 15% of the total travel costs. New York: Ø Ø Ø Compact: $51. 46 Midsize: $54. 93 Full size: $59. 25 Average Daily Rate: $55. 21 Taxes & Fees: 34. 6% Total: $74. 31 Stamford, CT: Source: , Business Travel News, 2012, 2013, 2014, 2015, 2016, 2017 Corporate Travel Index White Plains: Ranked 1 Ø Ø Ø Ranked 8 Compact: $38. 57 Mid size: $40. 32 Full size: $43. 67 Average Daily Rate: $40. 85 Taxes & Fees: 30. 2% Total: $53. 19 Not Ranked in Top 100
Uber vs Taxi Expense Reports processed by Certify Source: Travel Procurement May 2017
GBTA and CWT 2019 Forecast: Car Rental Pricing Page: 44
GBTA and CWT 2019 Forecast: Top Tips for Travel Buyers Page: 45
Advito 2019 Forecast: Car Rental Pricing Source: Advito 2018 Industry Forecast
External Profile – Summary Market Trends Airline • Top four companies holding an estimated market share of 73% • Growing role of Premium Economy • Airline prices are forecasted to rise between 1% – 2% for the US in 2019. Globally 1 – 2. 6% Industry Challenges Hotel • New Distribution Capability (NDC) • The global hotel industry revenue and US hotel industry revenue is estimated to exceed $560 billion and $200 billon for 2018 • New Technologies consistently entering the marketplace • BTN: The average hotel daily cost: $180. 12 • Marriott, Hyatt, and Wyndham are investing in home -sharing start-ups to combat Airbnb. • For 2018, US hotel prices are forecasted to rise between 1% - 3% Car Rental • Industry Supplier Consolidations (Marriott/Starwood) • Hotel Cancellation Policy • Meetings Commission Rate • Air. Bn. B and Uber/Lyft models • Global Hotel Chains getting into the home rental market • Peer-to Peer Car Sharing / Autonomous Vehicles Market Drivers • Global industry spend is $39. 9 Billion of which 26. 3 is business travel car rental. 53. 4% is on airport rental and 21. 8% is off-airport. • Jet Fuel is the largest cost driver for airlines. • Within US, spend is estimated at $28. 6 Billion • Supply and Demand in the hotel industry • Car Rental prices predicted to increase 1% - 4% in 2019 • Car sharing has continued to emerge • Jet Fuel is up - Current 2018 price is $98. 77 per barrel. Impact on 2018 fuel bill amounts to $47 Billion
Travel Category Strategy
Travel Category Strategy
Travel Category Strategy Travel Priorities Market driven competitive bidding Category Strategies Optimize travel spend by reducing TCO Influence smart /informed travel decisions thru a) appropriate booking tool content and b) compliance Utilization of appropriate procurement channels Traveler communication and training Policy Compliance Utilization of Travel Agency /Online booking Tool Optimize traveler experience / Duty of Care Measures Of Success • Reduce TCO • Increased competition and volume leverage • Utilization of preferred suppliers • Leverage & build key supplier relationships • Reduce TCO • Utilization of Travel Agency & On line Booking Tool • Utilization of preferred suppliers • Improve key performance indicators • Travelers booking thru Travel Agency & On line Booking Tool • Aligning process for meetings/events bookings with business needs • Utilization of Travel Agency & On line Booking Tool • Employee Feedback
Travel Category Projects Category Strategies Quick Wins Optimize travel spend by reducing TCO Influence smart/informed travel decisions thru a) appropriate booking tool content and b) demand management Utilization of appropriate procurement channels Supplier Performance Assessment Contract Analysis Sourcing Events Utilizing the Travel Agency or on line booking tool to book travel Meetings/Events Analysis Traveler communication & training Corporate Social Responsibility / Social Media for the future traveler / Travel Apps
Travel Category Additional Opportunities Category Opportunity Airline 1. ATP modeling 2. Analysis on Non-Restricted Coach tickets 3. Airline City Pair and benchmarking 4. Class of Service Analysis 5. Understanding ancillary fees 6. Incentivize travelers to fly coach instead of Int’l business class Hotel 1. Hotel RFP 2. Obtain additional global chainwide discounts 3. Explore shifting down hotel chain levels 4. Perform hotel cluster analysis of int’l cities 5. Review hotel booked data vs. paid hotel rate 6. Explore including a hotel “cap” (travelers would only be reimbursed to “cap” amount Car Rental 1. Car Rental RFP 2. Educate Travelers when to rent a car vs other modes of transportation (ie Uber/Lyft) Airport Parking 1. Review to determine if travelers are utilizing preferred airport parking suppliers 2. Explore additional parking opportunities in other cities Rail 1. Review raid spend and explore possible preferred suppliers Traveler Risk & Security 1. Competitive Bid with appropriate suppliers. Include Travel, Security and HR Departments Meals 1. Determine any opportunities to lower TCO – such as daily cap, etc 2. Work with Dinova to include additional frequented restaurants Cash Receipts 1. Determine average daily spend for Meals 2. Explore lowering cash receipts to $25. Benchmark with other organizations General 1. Review process to allow consulting/temp/contract labor/new hires/interviewees to book thru Travel (on-line booking tool) Develop policy for all to incorporate 2. Understand Company Corporate Social Responsibility(CSR), specially carbon footprint, and how it fits into the overall travel program. Explore what other large organizations are doing in this area 3. Understand Social Media and how the future travel program will incorporate such tools to cater to the traveler community of the future (younger travelers) Meetings/Events 1. Identify meeting/events spend. Determine current process and make recommendations to lower TCO and mitigate risk Technology 1. Travel Reporting Tools 2. Smart phone apps
Strategic Road Map (Next Steps) 2020 Q 2 -4 2019 Q 1 2019 Q 4 2018 • Implement Quick Wins • Identify timeframe for sourcing events • Start Hotel Sourcing • Commence Competitive Bids for: • Car Rental • Travel Agency • Benchmark airline program • Airport Parking RFP • Traveler Risk & Security RFP • Analyze Meeting/Events Program Challenges & Issues: • Resources • Stakeholder buy-in
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