Ragge said savvy organisations looked at travel from an end-to-end perspective © 123RF
Ragge said savvy organisations looked at travel from an end-to-end perspective © 123RF

Procurement can get more value out of travel

24 October 2017

By focusing on employee experience and employer branding as well as cost savings, procurement can get more value out of business travel, according to Tobias Ragge, CEO of hotel booking service HRS.

He was speaking at ProcureCon Europe in Berlin, on a panel with Christian Heid, VP corporate sourcing manager; marketing, travel & consulting at DHL. 

Ragge said that “procurement was just the beginning” for business travel, and that more “savvy” organisations looked at business travel from an “end-to-end perspective”, tying into wider aims around organisational culture.

Siemens was just one example, he said, in that the firm abolished travel approvals in a move towards an “ownership culture”.

“The biggest opportunity, aside from cost, is tying procurement to the employer brand and employee experience,” said Ragge. “The war for talent is on, and travel touches every desk. [Travel] can be used to express the company trusts people and has a culture of empowerment. Procurement can be part of that employer branding strategy going forwards.”

Heid said that booking business travel is often much harder than booking personal travel, thanks to “clunky” tools.

“When you travel for the company it suddenly becomes much harder, with old tools,” he said. “Whereas in your personal life you can use tools like Skyscanner.” He said the opportunity was there for procurement to encourage compliance via better tools

Both Heid and Ragge agreed that the success of travel buying should be measured on softer benefits like duty of care and traveller satisfaction, as well as cost savings. 

The travel market is particularly challenging for buyers because it is so fragmented, said Ragge, especially in the accommodation space.

In the hotel market, only 25% of hotels are run by chains, he said, compared to the airlines market where 250 carriers cover 95% of overseas flights. That means the hotel market is a buyers’ market, he said, with the opportunity for 20-35% savings.

However, given some business travellers choose to book their own travel and find their own deals, this spend is not well managed in many businesses.

“Hotels are a black hole for company expenses,” Ragge said. “If you can’t manage your spend, you can’t optimize it.”

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