category management travel category · category management new procurement operating model page: 3...

Category Management

Travel Category

Kathy Briski, C.P.M., GTP

February 6, 2018

Global Procurement Processes

Source: www.strategiccomputing.ie ; www.accenture.com

http://www.strategiccomputing.ie/

http://www.accenture.com/

Category Management New Procurement Operating Model

Page: 3

• Prior to 1990’s, procurement was a back-office function

whose primary objective was purchasing and ensuring cost

savings

• Starting in the mid 1990’s, technology created options and

new processes, giving way to an era of strategic souring

(eSourcing)

• Today, to take the organization to the next level, the first

critical step is to advance skillsets, mindsets, and modes of

operation - shifting focus to category management in order

to achieve breakthrough value.

• Category Management – Strategic operating model by

shifting tactical work away from the category manager and

delegating it to a qualified execution-focused team, it allows

the category manager to focus on stakeholder management

and category strategy development, the two key strategic

elements.

Source: http://www.sig.org

Strategic Sourcing vs Category Management

Page: 4

Key Category Management Principles

Page: 5

Category Management

Cross Functional

Team Approach

Strong Supply

Market Knowledge

Transition to

Success

Stakeholder

Engagement Facts And Data

Corporate Governance

Source: http://www.procurement-academy.com

http://www.procurement-academy.com/




• 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

Internal Profile

External Profile

Internal and external drivers are used to develop the subcategory strategies

• 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

Category Strategy

• 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

Travel Category Category Profile Drives the Strategy

Travel Category Profile

Objectives & Key Outcomes

Balance the optimization of the traveler experience while reducing the Total Cost of Ownership for the travel spend.

Vision

2011 Annual Spend: $XXX

Addressable/More Research: $XXX

Savings Target: $XX

Annual Spend & Savings Target Current # of Suppliers: ~XXXX

(XX Airline / XXXX Hotels / Car Rental)

Target # of Suppliers: N/A

Supply Base

Scope

Travel Category Cross Functional Team Charter

Deliver cost savings opportunities thru sourcing projects

Help control business travel costs thru demand management

Provide travelers with optimized and consistent service levels

Short Term Work Plan

Effectively manage supplier relationships

Meet the demands of the changing travel environment

Develop sustaining CFT operating model

Travel related expenses:

Airline

Hotel

Ground Transportation

Car Rental

Towncars/Limos

Airport Parking

Meals

Meetings/Events

Travel Management Company

Travel Policy Issues

Demand Management

Out of Scope: Relocation Services

Activity April May June July Aug Sept

Identify CFT

Members

CFT Kick-off

Establish Team

Rhythm

Develop Category

Profile

Review with

Business Partners

Presentation to

Leadership

Work

Opportunities

Internal Profile - Spend

The scope of the project includes all global spend within Company. Total Spend:

$XXXM

• Total spend was obtained using a

combination of travel agency data,

commercial card data (corporate card, P-

card, 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%

Observations

Spend by Business Unit (PNR Data) Top Ten Airlines by Spend (PNR Data)

Advance Ticket Purchase(ATP) (PNR – Tickets) Observations: Approx. 70% of spend is with the top10 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

-

20

40

60

80

100

120

140

160

DL UA AA BA AS WN LH QF VS Misc Total

$ in

Mill

ion

s

Airlines

[CATEGORY NAME] [VALUE]







21+ Days [VALUE]

Domestic Vs. International (PNR Spend) Class of Service – Domestic (PNR – Tickets)

Class of Service – International (PNR – Tickets) Observations: 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.


Internal Spend Profile - Airline




[CATEGORY NAME] 65%





0.00

20.00

40.00

60.00

80.00

100.00

Economy Coach Business First

$ in

Mill

ion

s

Spend by BU (Expense Data) Top 10 Domestic Hotel Chains by Spend/Rooms (PNR Data)

Top 10 Int’l Hotel Chains by Spend/Rooms (PNR Data) Observations: Total Hotel spend is $64M, Domestic - $50M International - $14M

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.


Internal Spend Profile - Hotel




GHI [VALUE]

0

10

20

30

40

50

60

Hilton Marriott Hyatt Starwood IHG Other Total

$ in

Mill

ion

s

Hotel Chain

0

5

10

15

Hilton Marriott Hyatt Starwood IHG Other Total

$ in

Mill

ion

s

Hotel Chain

Domestic vs. International (PNR –Room Nights) Domestic: Preferred Hotels (PNR – Room Nights)

Int’l: Preferred Hotels (PNR – Room Nights)* 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.


Travel Category – Internal Spend Profile Lodging

[CATEGORY NAME]

[VALUE]

[CATEGORY NAME]

[VALUE]





Top 10 Hotel Properties by Spend (PNR Data) Top 10 Hotel Cities (PNR Data – Airport Codes)

Chain Scale Room Night Segmentation (PNR Data) 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.


Internal Spend Profile - Hotel

[CATEGORY NAME]

[VALUE] 500

Nights $250 Ave Rate

[CATEGORY NAME]

[VALUE] 5,000 Nights

$145 Ave Rate

[CATEGORY NAME]

[VALUE] 4,000 Nights

$125 Ave Rate

Midscale 10% 1,500 Nights $90 Ave Rate

[CATEGORY NAME], [VALUE] 250 Nights

$75 Ave Rate

0

2

4

6

8

10

12

14

16

PHX SEA LAX STL JFK DCA LHR PHL CDG Other

$ in

Mill

ion

s

0.000.501.001.502.002.503.003.504.00

$ in

Mill

ion

s

Hotel Chain Scales

Chain Scale Brand Name

Luxury

Upper Upscale

Upscale

Midscale

Economy

Ex-Upscale

Ex-Midscale

Ex-Economy

For Domestic Hotel

Bookings (2017) :

Total Tracked

Spend: $XXM

45% of spend in

Upper Upscale.

Average Nightly

Rate: $145

30% of spend in

Upscale. Average

Nightly Rate: $125

Business Travel

News: 2017

Corporate Travel

Index: $177

http://www.extendedstayamerica.com/

Spend by BU (Expense Data) Top 3 Suppliers by Spend (Expense Data)

Car Rental Domestic Spend by Type (Supplier Data) Observations: Car rental expense reimbursements amounts to $15M

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




GHI [VALUE]



Refuel 2%

GPS 1%

0.00

1.00

2.00

3.00

4.00

5.00

6.00

Avis Enterprise Hertz

$ in

Mill

ion

s

Car Rental - % of Cars Returned Refueled (Supplier Data) Car Rental – Charges by Booking Source (Supplier Data)

Car Rental – Method of Payment (Supplier Data) 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 - Car Rental



[CATEGORY NAME]

[VALUE]

[CATEGORY NAME]

[VALUE]

Walkup 20%

[CATEGORY NAME]

[VALUE]

[CATEGORY NAME]

[VALUE]

Spend by BU (Expense Data) Top State Spend (Expense Data)

Top Merchant Spend (Expense Data) Observations: The top states are Arizona, California and New York (no surprise).

2015 analysis indicated that 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 - Meals

[CATEGORY NAME]

[VALUE]

[CATEGORY NAME]

[VALUE]

DEF 40%

GHI 5%

[CATEGORY NAME]

[VALUE]

[CATEGORY NAME]

[VALUE]

New York 20%

Ohio 10%

Other [VALUE]



Bobby Q $500,000

AB Catering $400,000

[CATEGORY NAME]Duke's

$300,000






[CATEGORY NAME], [VALUE]

Meeting/Event Spend (Expense Data) Top Suppliers by Spend

SSPN Spend By BU (Expense Data) 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.

Internal Spend Profile - Meetings/Events

[CATEGORY NAME] [VALUE] [CATEGORY NAME]

[VALUE]



DEF $8,000,000

GHI $2,000,000

[CATEGORY NAME]

[VALUE]

[CATEGORY NAME]

[VALUE]

Show Produtions $3,000,000

Ecilpse $2,000,000

[CATEGORY NAME]

$1,000,000

[CATEGORY NAME]

[VALUE]




[CATEGORY NAME]

[VALUE]

[CATEGORY NAME]

[VALUE]

Travel Category Summary of Major Contracts

Supplier Description Contract

Value

Term of

Contract

Agreement

End Date

Corporate

Card

Corporate Travel /

Procurement Card

Travel

Agency Travel management services

Airlines Preferred Airlines

Hotels Chain Agreements

Car Rental Car Rental Services

Booking /

Expense

Tool

On-line Software for booking

and expensing travel

GDS GDS system for booking

travel

Airport

Parking Airport Parking for Travelers

Risk/Security Location of Travelers /

•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

Observations

External Profile – Summary

Market Trends

Airline

• Top four companies holding an estimated market

share of 68.8%

• Airline prices are forecasted to rise between 1% –

2.3% for the US in 2018. Globally 0 - 3.5%

Hotel

• The global hotel industry revenue is estimated to reach $554.6 billion for 2017

• The US Hotel Industry Revenue is estimated to reached $199.7 billion in 2017

• BTN: The average Hotel daily rate is $256.63 up

4.3% from 2016

• For 2018, US hotel prices are forecasted to rise

between 2% - 4%

Car Rental

• 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.

• Within US, spend is estimated at $28 Billion

• Car Rental prices predicted to increase 1% - 5% in

2018

Market Drivers

• Jet Fuel is the largest cost driver for airlines.

• Jet Fuel is up - Current 2018 price is $85.5 per barrel.

Impact on 2018 fuel bill amounts to $38.1 Billion

• Supply and Demand in the hotel industry

• Car sharing has continued to emerge

Industry Challenges

• New Distribution Capability (NDC)

• New Technologies consistently entering the marketplace

• Industry Supplier Consolidations (Marriott/Starwood)

• Hotel Cancellation Policy

• AirBnB and Uber/Lyft models

Airline Industry: Overview

• 2017 Global Airline Industry revenue estimated to reached $754 Billion. Estimate for 2018 is $824 Billion

• 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.

• Top four companies holding an estimated market share of 66.6%.

• Low profit margins and intense price competition Major operators such as American Airlines, Delta and United will reap synergies from their mergers, leading to higher profit margins. However, profit margins will still depend on volatile fuel prices and the airlines’ ability to successfully hedge against any adverse movements. New fuel-efficient aircraft will aid this cause and increase operator competitiveness in the global market.

• Business customers account for a significant portion of domestic flying. Companies tend to pay for travel when business activity is strong and profit levels are high. When corporate profit is down, demand for air travel also declines. However, when it increases, demand improves.

Key Points

Source: airlines.org, Airline Financials.com, IATA, Wikipedia, Statista.com,

MarketWatch.com

2017 Global Airline Industry: 2017 Revenue estimated to reach $754 Billion. North America is

the industry leader.

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Operating Revenue Net Income

$582

$493 $564

$642 $706 $717 $733 $727 $736 $754

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Reven

ue

in

Bil

lio

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Annual Global Airline Industry Revenue

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)

http://www.bls.gov/ppi/

http://www.bls.gov/ppi/

Airline Industry: Jet Fuel Costs

• 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 $85.5 per barrel. Impact

on 2018 fuel bill amounts to $38.1 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.

Key Points

Sources: Airlines for America: www.airlines.org, www.bts.gov, www.iata.org, ww.statista.com

Fuel is one of the largest cost contributor to airlines’ operating costs.

$91

$120

$130 $125

$76

$45

$51

$69

$86

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$140

2010 2011 2012 2013 2014 2015 2016 2017 2018

Av

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rice P

er

Barr

el

http://www.airlines.org/

http://www.iata.org/

Airline Industry: Air Travel Price Index & Ancillary Fees

Sources: Bureau of Transportation Statistis, Ibisworld.com, Airlines for America: www.airlines.org; Plane Stats.com, CarTrawler Yearbook of Ancillary Revenue (IdeaWorks Company)

Air Travel Price Index for Atlanta,GA Key Points

The air travel price index measures the percents change over time in prices paid by travelers.

• The cost of airfare flying out of the Atlanta, GA has

been consistently up higher than the national average

(although a couple times lower), but in 2017 showing

consistent parallel with 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

http://www.airlines.org/

The Four Largest U.S. Carriers Have Grown Aggressively at Each Other’s Hubs Growth (%) in Daily Domestic ASMs* at Competitors’ Hubs & Focus Cities: 2010 to 2017

Page: 27

Meanwhile, Smaller Carriers Have Been Expanding Rapidly at Large-Carrier Hubs Growth (#) in Daily Domestic Seats* at Competitors’ Hubs & Focus Cities: 2010 to 2017

Page: 28

Cost of Air Travel Compared to Other Goods and Services

Page: 29

CWT/GBTA 2018 Forecast: Airline Pricing

Source: CWT/GBTA 2018 Global Travel Price Outlook

Advito 2018 Forecast: North America Airline Pricing

Source: Advito 2018 Industry Forecast

Hotel Industry: Overview

• The global hotel industry revenue is estimated to reach $554.6 billion for 2017

• The US Hotel Industry Revenue is estimated to reached $199.7 billion in 2017

• 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.

• US revenue is projected to increase at an

average annual rate of 3.0% to $167.0 billion

over the three years to 2019.

Key Points

Source: www.IBISWorld.com, MarketWatch.com, Smith Travel Research

The US Hotel Industry Revenue reached $166.5 Billion in 2015.

$0.00

$5.00

$10.00

$15.00

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2016 Global Operating

Revenue (in billions)

http://www.ibisworld.com/

The PPI for hotel rooms have continued to climb since 2010

Hotel Industry: PPI – Hotels & Motels, Guestroom Rentals, Full Service

Source: http://www.bls.gov/ppi/

NAICS 721110.1 All indexes are subject to revision four months after original publication.

Hotel Industry: Overview

• The average daily rate in the US for 2017 was $126.72

• Bottom chart represents the monthly average daily rate of US hotels from 2011 to 2017.

• The U.S. hotel industry reported occupancy rose 0.6% during the week of 21 – 27 January. ADR rose 3.9% to $124.72 and RevPAR increased 4.5% to $72.55 during the week.

• Business Travel News – Average hotel daily cost: $177.36 Atlanta: Ranked 25

Upper Upscale: $164.61

Upscale: $147.45

Midscale: $121.16

Average $196.61 ($165.18 + $31.43 tax)

Year over Year Change: 4.8%

• For 2018, US hotel prices are forecasted to rise between 2% - 4%

Key Points

Source: Smith Travel Research.com’, Statistic.com

The US Hotel Industry Revenue reached $166.5 Billion in 2015.

U.S. 2017 Average Hotel Rates

Airbnb: Does your Travel Program Allow It? Average daily hotel rate vs Average daily Airbnb rates in 2016(in U.S. dollars)

Page: 35 Source: Busbud.com 2016

CWT/GBTA 2018 Forecast: Hotel Pricing


Advito 2018 Forecast: Hotel Pricing


Car Rental Industry: Overview

• 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.

• Within US, spend is estimated at $28

Billion

• 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 off-

airport locations to compete with

Enterprise

• Investing in technology to compete with

car sharing such as Uber and Lyft.

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.

SAMPLE

Rental Car Industry: PPI – Passenger Car Rental

NAICS 532111 All indexes are subject to revision four months after original publication.

Source: http://www.bls.gov/ppi/

The PPI for passenger car rentals had been decreasing since 2011, with a small increase in 2014, why?

Car Rental Industry: Market Share

• Market share:

• Enterprise – 35.5%

• Avis/Budget – 15.2%

• Hertzt – 15.1%

• Suppliers offer different brands that focus on specialized markets.

Corporate Traveler – On-airport convenience – Hertz, Avis and National

Leisure Market – On/Off-airport Budget, Dollar Thrifty, and Enterprise

• Additional Non-US regional players include:

Europcar (Europe and Asia Pacific)

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

Key Points

Source: www.autorentalnews.com; www.ibisworld.com, Business Travel News, 2017

Corporate Travel Index, MarketWatch.com

The U.S. car rental market is highly consolidated among a small number of major players and is getting smaller.

Top 3 Car Rental Companies By Operating Revenue

$22.30

$8.80 $8.70

$1.00

$6.00

$11.00

$16.00

$21.00

$26.00

Enterprise Hertz Avis Budget

2016 O

pera

tin

g R

evenue (

in B

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ns)

http://www.autorentalnews.com/

http://www.ibisworld.com/

Car Rental Industry: Market Share

• 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. ZipCar, WeCar, Connect.

• Business Travel News – Average daily cost: $47.02 which makes up 15% of the total travel costs.

Atlanta: Ranked 40 - $34.09 for mid size car.

Key Points

Source:, Business Travel News, 2012, 2013, 2014, 2015, 2016, 2017 Corporate Travel

Index

The U.S. car rental market is highly consolidated among a small number of major players and is getting smaller.

Uber vs Taxi

Source: Travel Procurement May 2017

Expense Reports processed by Certify

CWT/GBTA 2018 Forecast: Car Rental Pricing


Advito 2018 Forecast: Car Rental Pricing


CWT/GBTA 2018 Forecast: Recommendations

Travel Category Strategy

Market

driven

competitive

bidding

Policy

Compliance

Utilization

of Travel

Agency

/Online

booking

Tool

Optimize

traveler

experience /

Duty of Care

Measures Of Success

Optimize travel spend by

reducing TCO

• Reduce TCO

•Increased competition and volume leverage

• Utilization of preferred suppliers

•Leverage & build key supplier relationships

Influence smart

/informed travel

decisions thru a)

appropriate booking tool

content and b)

compliance

• Reduce TCO

• Utilization of Travel Agency & On line Booking Tool

•Utilization of preferred suppliers

• Improve key performance indicators

Utilization of appropriate

procurement channels

•Travelers booking thru Travel Agency & On line

Booking Tool

• Aligning process for meetings/events bookings with

business needs

Traveler communication

and training

• Utilization of Travel Agency & On line Booking Tool

•Employee Feedback

Travel Category Strategy

Travel Priorities

Ca

teg

ory

Str

ate

gie

s

Optimize travel spend by reducing

TCO

Utilization of appropriate

procurement channels

Travel Category Projects

Category Strategies Projects

Influence smart/informed travel decisions

thru a) appropriate booking tool content

and b) demand management

Traveler communication & training

Data Analysis to Identify

Sourcing Events

Meetings/Events Analysis

Utilizing the Travel Agency or on line booking tool to

book travel

Corporate Social Responsibility / Social Media for the

future traveler / Travel Apps

Quick Wins

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

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 Depts

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. 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)

Q2 2018

3Q 2018

2019

2020

Challenges & Issues:

• Resources

• Stakeholder buy-in

• 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

category management travel category · category management new procurement operating model page: 3...

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