17 February 2005 | Cara Whitehouse
Travel is fast becoming a commodity, with too much focus on price and not enough on total value, according to Jenny Prescott, sales director at British Travel International.
Prescott made her comments during a debate on whether procurement departments should take over corporate travel buying.
She warned that businesses risked cutting costs too far, particularly if their travel buying is managed by an outsourced company that could win a share of savings.
She also noted that almost two-thirds of corporate travel is now bought by procurement departments. This figure has risen from 15 per cent in the 1970s when most business travel was bought by travel or HR managers.
One supplier complained that deals were falling apart because purchasers concentrated purely on bottom-line costs.
But Matthew Roper, managing director of consultancy Buying Support and chairman of the CIPS Swindon branch, stressed there is significant value to be added by procurement.
Skilled supplier evaluation, along with a total-cost approach, experience in contract management and an ongoing drive to decrease the transaction costs across all purchases were among the benefits that could come from procurement's input.
He emphasised that for purchasers to be successful travel buyers, their aims must be long-term, taking into account strategic factors as well as traditional considerations of unit price.
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