To achieve the best deals when negotiating with travel suppliers, buyers should firstly think about how the partnership could be mutually beneficial.
Speaking at the Business Travel Show in London on Thursday, Angelina Bunting, head of supplier relations at corporate travel management company Reed & Mackay, said buyers should list down any additional opportunities that they could deliver to the supplier.
“With hotels, ask yourself, do you use more deluxe rooms instead of standard rooms or do you spend a lot on food and beverages when you’re in the hotel? With air travel, do you use business seats than economy? Will you spend extra on ancillary things like wifi? Any extras are valuable to the supplier, “ she said.
“All these can be used as leverage and you might get better results on your core travel route or bedroom rate if you can bring added value to the supplier.”
She said buyers should open regular dialogue with their supplier to the point where they understand what the supplier’s objectives are and how they could potentially help them to achieve those objectives.
“It’s a really basic example but you may have a lot of meetings and events and through a hotel supplier you establish that a big objective for them is that they’ve just invested a lot of money on upgrading their event space and they need to start earning some revenue from that,” she said.
“You realise you have two or three meetings a year and you bring the two together and start talking to each other on a strategic level about how you can work together and I think that really helps build that long-term partnership.”
She explained that these long-term relationships could help both parties through tricky supply and demand cycles.
She said a couple of years ago both Aberdeen and Dubai were suffering a shortage of hotel rooms and the industry had so much leverage over buyers they would say: “It’s that price or nothing. You aren’t prepared to pay? There is a line of people who will pay more.”
Bunting said: “However, now both cities have the complete reverse – there is too much supply versus demand – and buyers will remember if you were supportive or not when the pendulum was swinging the other way.”
She said at the heart of optimising leverage was preparation – collecting data, using it to understand what exactly is needed from the supplier, what the supplier might need, and coming up with a clear brief before starting a dialogue.
“Understand your company culture and who your travellers are before you even start talking to a supplier. It’s really important to know what your objectives are – are you trying to cost save or is it about traveller satisfaction?” she said.
“Then outline what you expect the supplier to deliver to you and what you can possibly deliver to them. But understanding and articulating well what your expectations are and where opportunity is for flexibility, and what is a mandatory requirement, is absolutely key,” she said.
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