Supplier sourcing

For years travel management teams have applied the same formula for driving travel savings.

One thing is for sure, doing more of the same won’t deliver the supplier savings you hope for. A recent study conducted with travel managers across different industries established that 84% of companies currently allow only essential travel. Historically supplier negotiations used a  volume-based contract model, but the significant downtrading due to the pandemic means this model will have to change for most travel programs.  

Identifying shifting trends

Travel priorities have shifted, and businesses will need to understand these shifting trends to maximise their future travel program effectiveness. 

By identifying significant trends, organisations will gain greater traction when reviewing and renegotiating supplier agreements. For example, instead of focussing on securing the lowest fares and rates, now many organisations are prioritising flexible cancellations periods and reduced charges for last-minute changes.  

Others are favouring private jet travel as a safe alternative for business air travel. Pegasus, a Johannesburg-based aviation company is revolutionising air transportation by developing a unique aircraft with the vertical take-off and landing capabilities of a helicopter and speed and comfort of a business jet. What makes this aircraft unique is that it allows for the pick-up and drop off travellers in dense urban areas, which means avoiding the added trip to and from an airport.

Savings through future-focussed changes

Key lessons extracted from our recent collective experience is that travel managers should constantly consider the impact of future-focused changes. Minor changes and shifts in purchasing behaviour will potentially save more money in the long run. For example, environmental and sustainability practices are becoming more prevalent, and in a few years, all companies will need to ensure that they reduce their carbon footprint.

By selecting carbon-neutral suppliers early, travel managers will significantly impact their organisations’ sustainability goals further down the line. Companies such as Amazon and Microsoft have already pledged their commitment to some form of carbon neutrality. In comparison, Starbucks and Amazon’s goal is to reach 50% & 100% carbon neutrality by 2030 and 2040, respectively. Selecting the right partner to achieve these goals is therefore critical now.