The role of procurement departments has certainly changed over the years, with value, levels of service and duty of care all becoming significant considerations when taking on a new supplier. However, there is one aspect of the procurement process that has stood the test of time and underpins everything that procurement department’s work towards and that’s cost.
I’m often asked to benchmark against existing practices but what is the best way to do this?
Understanding transaction fees and how they relate to your overall spend is a crucial element in selecting a TMC.
Equipping yourself with as much industry knowledge as possible is the best way to get the procurement process off to a good start. If you’re keen to drive online bookings then, by doing research, you should be able to find a realistic online adoption rate expectation. The volume of online bookings your organisation makes will have a direct impact on the fees you pay, as online bookings are usually charged at a lower rate than offline bookings.
Don’t focus exclusively on offline fees.
In recent years there has been a real drive within the business travel industry to increase the amount of bookings made online. With transaction fees for online bookings being typically lower, this has been a great result for travel buyers. However, the same kind of fees should not apply to offline bookings. When it comes to offline assistance, it really is a case of you get what you pay for. It is imperative you work with your TMC to work out how realistic your online adoption rate really is, if you have a lot of multi-sector long haul travel I’d suggest you will be doing more offline than online but if it is simple point to point low cost travel a higher online adoption is probably realistic.
TMCs do not all have access to the same fares and so will not deliver the same online/offline booking ratios. If you really want to know what it would cost to work with each TMC you need to tailor your analysis based on your research and their figures.
Once you’ve done your calculations, based on a tailored online adoption per TMC, you can then work out what percentage of your total travel spend the transaction fees would equate to. The industry average sits at around 5%, so if you’re preferred TMC comes in less than this, with excellent customer service and a great all-encompassing solution as well, then from a cost perspective they are very much worth considering.
Get in in touch and we can show you how much we can help you and make life easier for you.
Give us a call on 0131 467 7000 or email us on firstname.lastname@example.org
The Travel Company Edinburgh
Click here for: Foreign Commonwealth & Development Office travel advice.
Many of the flights and flight-inclusive holidays on this website are financially protected by the ATOL scheme. But ATOL protection does not apply to all holiday and travel services listed on this website. Please ask us to confirm what protection may apply to your booking. If you do not receive an ATOL Certificate then the booking will not be ATOL protected. If you do receive an ATOL Certificate but all the parts of your trip are not listed on it, those parts will not be ATOL protected. Please see our booking conditions for information, or for more information about financial protection and the ATOL Certificate go to: www.atol.org.uk/ATOLCertificate
Book with confidence. We are a Member of ABTA which means you have the benefit of ABTA's assistance and Code of Conduct. All the package and Flight-Plus holidays we sell are covered by a scheme protecting your money if the supplier fails. Other services such as business travel, hotels or flights on their own may not be protected and you should ask us what protection is available. To find out more please go to www.abta.com Our numbers are W9294, C7292, J2696.
The air holiday packages advertised on this website are ATOL Protected by the Civil Aviation Authority, as we act as an agent for licensed tour operators and we can ATOL protect our own tailor-made itineraries for you. The names and ATOL numbers of each tour operators are displayed with each holiday offer shown and when enquiring with us about your holiday we will advise who is ATOL protecting your booking and confirm their ATOL number. Our ATOL number is 9150. You can check an ATOL number here