Travel supplier sourcing encompasses more than just vetting suppliers; it’s an ongoing and dynamic process. A recent BCD Travel survey reveals that while cost containment is top of mind, travel buyers employ multiple approaches to source and manage their suppliers. This includes leveraging technology and managing contract negotiations.
Travel buyers rate cost savings as their top concern
BCD’s survey of 132 buyers from around the world indicates 42% of travel buyers reported an increase in travel spend, while 29% witnessed a decrease. Either way, when it comes to supplier management and sourcing, nearly 70% of travel buyers rate cost savings as their top concern.
Other key priorities include:
- Data collection (38%)
- Compliance control (36%)
- Supplier consolidation (31%)
Travel buyers: Saving money isn’t the only priority; saving time is too.
Travel buyers engage in various strategies to cut costs, including supplier consolidation, renegotiating existing agreements and using reshopping tools; each used by approximately 40–50%. Also, two-thirds of companies mandate preferred suppliers (64%), while one-third prioritize lowest rates regardless of supplier status (35%).
Saving time is also a high priority. Contract negotiation and management are identified as the most time-consuming task, cited by over half of travel buyers (52%). For a quarter of respondents, reducing the level of effort is important, which may involve simplifying the Request for Proposal (RFP) process or leveraging AI.
It takes a village
Travel sourcing doesn’t occur in a vacuum. In addition to travel risk management, procurement, finance, security, and HR are most often involved in sourcing travel suppliers. Third parties are also consulted to assist with travel sourcing: six in 10 buyers (61%) lean on their TMCs, while roughly three in 10 (only 28%) engage external consultants.
Despite this broad approach, challenges lay ahead. Beyond high costs/rate volatility, other concerns when it comes to sourcing suppliers are fragmented content across channels, complex RFP processes and technological limitations.
What does the future look like?
To help meet these challenges, new changes in supplier sourcing methods are anticipated to take root:
- Buyers expect to seek more additional services (air: 38%, hotel: 30%, car rental: 15%) and greater flexibility in cancellation and exchange policies (air: 23%, hotel: 30%, car rental: 13%)
- More multi-year agreements (46%)
- Continuous sourcing (45%)
- Supplier and platform consolidation (40%)
- Adoption of new payment methods (36%)
The increasing use of AI and automation (61%) in particular, may allow sourcing teams to breathe a little. While AI focuses on analyzing raw data, automating contract orders, evaluating supplier performance and more, travel buyers are freed up to explore critical strategic initiatives.
“BCD enables travel managers to take decision making to the next level,” said Teri Miller, executive vice president, Global Client Team at BCD. “We streamline supplier data throughout the trip lifecycle, providing real-time information. This empowers travel managers with actionable insights, leading to improved budgeting, enhanced compliance, and more assured decisions.”
How can you optimize your travel sourcing supplier program?
The quality of your suppliers determine the quality of your travel experience.
Advito, BCD’s consulting division, has sourcing and supplier spend management solutions designed to help build and optimize managed air and hotel programs. Solutions are powered by data and driven by people with the expertise to achieve new levels of savings, sustainability, and satisfaction.
