How Breaking up Silos can Drive Value in a Converged Program Management
July 2023
MICE
MICE
Managed travel programs face a difficult negotiation climate. More than three-quarters of travel managers (77%) say the negotiation climate today favors suppliers more than it did before the pandemic. One in five (19%) say the negotiation climate is the same. Only 4% say the negotiation climate favors buyers more than it did before the pandemic.
While the negotiation climate generally favors suppliers, this is more true with some types of suppliers than others. Of the travel managers who say their company conducted hotel RFPs last year, more than half (55%) say it was difficult to obtain favorable rates. Similarly, two in five travel managers (39%) whose company conducted airline RFPslast year say it was difficult to obtain favorable discounts. However, companies fared better with meetings and extended stay.
While hotel negotiations proved challenging for travel programs in North America and Europe, they were particularly challenging in Europe. Of the Europe-based travel managers who say their company conducted hotel RFPs last year, three-quarters (74%) say it was “somewhat difficult” or “very difficult to obtain favorable rates. This compares to about half (47%) who say so in North America.
Air and hotel negotiations are expected to continue to pose challenges. Asked to pick two spend categories that will prove most challenging when it comes to negotiating favorable rates, pricing, or amenities in the next two years, most travel managers pick air (69%) or hotel (56%). Fewer pick TMCs (25%), car rental (15%), or various types of meetings.
Most travel programs are involved with meetings management. However, travel and meetings are typically not “owned” by the same team. Almost two-thirds of travel managers (64%) are involved with meetings management at their company. However, only one-quarter of travel managers (25%) say the travel team at their company has primary ownership of meetings management.
Even though travel and meetings teams collaborate, they have work to do to fully realize the benefits of this collaboration. These potential benefits include consolidated data, greater savings, and process efficiencies (see p. 22). Only one in in five travel managers (22%) say their company’s travel and meetings programs are “mostly integrated.” While more than one-third (37%) say the travel and meetings programs are “somewhat integrated,” a larger number (41%) say the two programs “mostly work in siloes.”
Travel managers are heavily involved with risk management. More than 9 in 10 travel managers (93%) are involved with ensuring the safety of traveling employees. This includes almost half (46%) who are “very involved.” However, this does not mean travel teams own the function. While one-quarter of respondents (28%) say the travel team has primary ownership, a larger number (65%) say another team does. Typically, this team is housed in a different department from the travel team.
More than two-thirds of travel managers (68%) are at least somewhat involved when it comes to selecting payment providers for travel. Moreover, a surprising number of travel teams actually own this function. One-third of respondents (33%) say the travel team has primary ownership.
Travel programs are largely not integrated with workforce mobility/employee relocation programs. Only 11% of travel managers say the two programs are mostly integrated at their company. A larger number say they are somewhat integrated (36%) or mostly work in siloes (53%).
Every week, travel managers spend a good amount of time collaborating with stakeholders. Thirteen percent of travel managers estimate they spend one to two hours per week collaborating with stakeholders outside of their own department. Almost one-third (31%) spend three to five hours per week. More than half (52%) spend more than five hours per week collaborating with stakeholders including almost one-third (30%) who spend more than 10 hours.
Travel programs meet with some departments regularly – but others on an as needed basis. More than half of travel programs (53%) meet with the finance/accounting department on a regular basis while a similar number (50%) meet regularly with the sustainability/CSR department. Only one-third of travel programs (33%) have regular meetings with the meetings management/marketing team. Only one-third of travel programs (31%) meet on a regular basis with HR.
Companies can negotiate with hotels across multiple categories at the same time. For instance, they can negotiate rates for transient room nights, meeting room blocks, and extended stay in the same RFP. Or, they can negotiate with hotels for room nights and coworking space at the same time. This not only saves time on negotiations. It can enable travel programs to obtain greater discounts by leveraging their “total spend” across multiple categories.
Most travel managers (54%) say their company would achieve greater efficiencies/savings if it could conduct RFPs with hotel properties or chains for multiple products or services at the same time or using the same technology platform. Only 10% say their company would not achieve greater efficiencies/savings by doing so.
Travel managers point to a number of benefits from negotiating with hotels across multiple categories at the same time. Out of five possible benefits, four are indicated by more than half of respondents. These include consolidated data (70%), greater discounts (66%), process efficiencies (57%), and time saved on RFPs (57%)
In addition to conducting negotiations across multiple categories using the same technology, travel programs can allow employees to book multiple categories using the same platform. For instance, employees can book extended stay apartments—or reserve small meeting space or coworking space—using the same technology platform that they use to book travel.
Half of travel managers (47%) say this would increase traveler satisfaction at least “somewhat” at their company. One-quarter (25%) do not know how this would affect traveler satisfaction. Fewer than one-third say satisfaction would decrease (1%) or would not change (28%).
Contents:
Introduction
Key Highlights
Methodology
The Current Negotiation Climate
Where Paths Cross: Travel Program Involvement With “Cross-Department” Functions
Stakeholder Collaboration in the Travel Program
Multi-Category Procurement
Negotiating with hotels across multiple categories at the same time
Respondent profile
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How Breaking up Silos can Drive Value in a Converged Program Management
July 2023
MICE
MICE
Managed travel programs face a difficult negotiation climate. More than three-quarters of travel managers (77%) say the negotiation climate today favors suppliers more than it did before the pandemic. One in five (19%) say the negotiation climate is the same. Only 4% say the negotiation climate favors buyers more than it did before the pandemic.
While the negotiation climate generally favors suppliers, this is more true with some types of suppliers than others. Of the travel managers who say their company conducted hotel RFPs last year, more than half (55%) say it was difficult to obtain favorable rates. Similarly, two in five travel managers (39%) whose company conducted airline RFPslast year say it was difficult to obtain favorable discounts. However, companies fared better with meetings and extended stay.
While hotel negotiations proved challenging for travel programs in North America and Europe, they were particularly challenging in Europe. Of the Europe-based travel managers who say their company conducted hotel RFPs last year, three-quarters (74%) say it was “somewhat difficult” or “very difficult to obtain favorable rates. This compares to about half (47%) who say so in North America.
Air and hotel negotiations are expected to continue to pose challenges. Asked to pick two spend categories that will prove most challenging when it comes to negotiating favorable rates, pricing, or amenities in the next two years, most travel managers pick air (69%) or hotel (56%). Fewer pick TMCs (25%), car rental (15%), or various types of meetings.
Most travel programs are involved with meetings management. However, travel and meetings are typically not “owned” by the same team. Almost two-thirds of travel managers (64%) are involved with meetings management at their company. However, only one-quarter of travel managers (25%) say the travel team at their company has primary ownership of meetings management.
Even though travel and meetings teams collaborate, they have work to do to fully realize the benefits of this collaboration. These potential benefits include consolidated data, greater savings, and process efficiencies (see p. 22). Only one in in five travel managers (22%) say their company’s travel and meetings programs are “mostly integrated.” While more than one-third (37%) say the travel and meetings programs are “somewhat integrated,” a larger number (41%) say the two programs “mostly work in siloes.”
Travel managers are heavily involved with risk management. More than 9 in 10 travel managers (93%) are involved with ensuring the safety of traveling employees. This includes almost half (46%) who are “very involved.” However, this does not mean travel teams own the function. While one-quarter of respondents (28%) say the travel team has primary ownership, a larger number (65%) say another team does. Typically, this team is housed in a different department from the travel team.
More than two-thirds of travel managers (68%) are at least somewhat involved when it comes to selecting payment providers for travel. Moreover, a surprising number of travel teams actually own this function. One-third of respondents (33%) say the travel team has primary ownership.
Travel programs are largely not integrated with workforce mobility/employee relocation programs. Only 11% of travel managers say the two programs are mostly integrated at their company. A larger number say they are somewhat integrated (36%) or mostly work in siloes (53%).
Every week, travel managers spend a good amount of time collaborating with stakeholders. Thirteen percent of travel managers estimate they spend one to two hours per week collaborating with stakeholders outside of their own department. Almost one-third (31%) spend three to five hours per week. More than half (52%) spend more than five hours per week collaborating with stakeholders including almost one-third (30%) who spend more than 10 hours.
Travel programs meet with some departments regularly – but others on an as needed basis. More than half of travel programs (53%) meet with the finance/accounting department on a regular basis while a similar number (50%) meet regularly with the sustainability/CSR department. Only one-third of travel programs (33%) have regular meetings with the meetings management/marketing team. Only one-third of travel programs (31%) meet on a regular basis with HR.
Companies can negotiate with hotels across multiple categories at the same time. For instance, they can negotiate rates for transient room nights, meeting room blocks, and extended stay in the same RFP. Or, they can negotiate with hotels for room nights and coworking space at the same time. This not only saves time on negotiations. It can enable travel programs to obtain greater discounts by leveraging their “total spend” across multiple categories.
Most travel managers (54%) say their company would achieve greater efficiencies/savings if it could conduct RFPs with hotel properties or chains for multiple products or services at the same time or using the same technology platform. Only 10% say their company would not achieve greater efficiencies/savings by doing so.
Travel managers point to a number of benefits from negotiating with hotels across multiple categories at the same time. Out of five possible benefits, four are indicated by more than half of respondents. These include consolidated data (70%), greater discounts (66%), process efficiencies (57%), and time saved on RFPs (57%)
In addition to conducting negotiations across multiple categories using the same technology, travel programs can allow employees to book multiple categories using the same platform. For instance, employees can book extended stay apartments—or reserve small meeting space or coworking space—using the same technology platform that they use to book travel.
Half of travel managers (47%) say this would increase traveler satisfaction at least “somewhat” at their company. One-quarter (25%) do not know how this would affect traveler satisfaction. Fewer than one-third say satisfaction would decrease (1%) or would not change (28%).
Contents:
Introduction
Key Highlights
Methodology
The Current Negotiation Climate
Where Paths Cross: Travel Program Involvement With “Cross-Department” Functions
Stakeholder Collaboration in the Travel Program
Multi-Category Procurement
Negotiating with hotels across multiple categories at the same time
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