'Price not key when choosing a travel management company'

Will Green is news editor of Supply Management
4 March 2015

Price should not be the key consideration when choosing a travel management company (TMC), a conference was told.

Nick Hurrell, partner at 3SIXTY Global, told buyers that capability in areas such as security, technology and traveller tracking was more important.

Speaking at the Business Travel Show in London, he said: “I would argue you don’t score price too heavily. Really understand the capabilities of the provider before you get to price.”

Hurrell said a TMC was necessary if you spent more than £100,000 a year on travel. “You can get far better compliance with your policy,” he said. “It’s likely in the long run to be cheaper. You will pay fees but overall the average price will be cheaper.

“A good TMC will give you very strong data. Where you are spending, where you are not spending, where you can do deals.”

Hurrell said there was a choice of around 10 TMCs with global reach but many more with UK expertise. He said the pre-bid process was "probably the most important part of any TMC process" and it was important to decide objectives, such as cost savings or better duty of care, and understand volumes and the business mix.

“Understand what your current costs are,” he said. “If your TMC can’t give you those then perhaps you should not be using them.”

Hurrell said getting recommendations from travel buyers in other firms was a good idea. “Talk to other local companies or departments before you get to a bid, so you get a feel for the market,” he said. “I have always found if you ring up a like-minded company, find out who runs their travel programme, they are always happy to talk.

“Meet potential suppliers well before you get to a bid. Discuss your criteria, discuss what you’re trying to achieve. Where are you going to take us in three years? You could avoid a full RFP.”

When assessing bids Hurrell said it was important to get agreement on evaluation criteria from decision makers and input from stakeholders.

He also urged buyers to agree the contract, including the service level agreement, before awarding it. “If not you are in a weakened position,” he said.

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