Travel – Why It’s A Seriously Important Spend Category

Last week we ran a webinar with hotel booking platform Roomex. (You can access it here still if you missed it, free on registration). The topic was digitalisation in the travel industry, that being a sector that has been affected more than virtually any other by digital developments. Think Uber, TripAdvisor, Airbnb, online airline booking with dynamic pricing … even the ability to check whether your plane or train is on time before you leave home!

The travel category is sometimes seen as not particularly high priority, but I argued in the webinar that procurement leaders should take it seriously. Why? Well, apart from the fact that a lot of money is spent by many organisations on travel services, in administration as well as headline costs, there are reputational issues for procurement. To illustrate that, I told this story during the webinar.

When I was European Procurement Director at Dun & Bradstreet Group (it owned lots of different firms back in those days), I got a call from the PA to probably my most senior stakeholder across our European businesses. Her boss – let’s call him “David” - had flown back from Vienna the previous evening on business, and, she said, he was very annoyed. Was he right in thinking we had a corporate deal with BA? Because he wanted me to take some action …

OK, I said, what went wrong? Flight delayed? Was he bumped off the plane? Did it break up over the channel and he had to swim back to Gerrard’s Cross?

No, she said. He was very upset though, because they’d served him Apple Strudel as part of his supper on the flight. And it was served cold. VERY cold.

Are you sure it wasn’t meant to be cold, I enquired. I rather like cold Strudel, personally.

No, she said, David was sure. It was unsatisfactory service from BA and he expected me to take action …

So you can listen to the webinar to find out what happened next! But the serious point is this. It may have been a trivial event, but travel was important to David and virtually every senior manager in the business. To some extent, people like that will judge the competence of procurement on the experiences they have, related to the spend categories that they care about.

I might put our strategic IT outsourcing deal much higher up the priority list compared to how well the cleaning contractor performs, or indeed the temperature of the Strudel, but if you want key stakeholders to feel good about procurement, then the contracts and suppliers that they interact with are important. So that’s another reason to look carefully at travel.

Back to the webinar - in terms of hotels, the old days of big discounts for corporate room-night deals are less significant now, and the whole issue of employee self-service is key. So we talk about that in the webinar too. Indeed, one of the strengths of the Roomex platform is that it can manage the whole end-to-end administrative process effectively and efficiently, while coping with different options for booking, which give travellers considerable flexibility.

So do listen / watch the webinar on playback at your leisure; its available here. And remember that your CEO, fairly or unfairly, might just be judging you on their schön Apfel Strudel ….

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