The next phase of travel and events
Historically the management of meetings, incentives, conferences and exhibitions (MICE) and traditional corporate travel has been disparate and siloed. This is despite the fact that often when employees travel, they do so in order to attend a meeting or event. This whitepaper outlines the state of the market to date and sets out the new phase of travel and events as a jointly managed venture. This new phase will see organisations reap the benefits of better visibility, consolidation of data across both MICE and corporate travel, resulting in better compliance and overall cost of program reduction.
In the MICE sector, requests for proposals (RFPs) can be time consuming and difficult to negotiate. However, as is common in an industry with so many moving parts, there's a real chance to consolidate things to save time, effort, money and so much more.
By conducting a meetings RFP at the same time as a travel RFP, procurement, marketing and in-house event managers have a value-added prospect - one that allows them to work more tightly to their budgets and improve service efficiency for stakeholders.
In essence, you're offering the seller more volume with your RFP. While some consider travel and events to be a seller's market - making price negotiations inflexible - consolidation gives the seller more volume and therefore more incentive to take another look at winning your business.
In addition, jointly procuring travel and events can offer further benefits to your organisation by offering end-to-end duty of care solutions as well as enhanced reporting on your travel and event spend.
As a result, consolidating travel and meeting RFPs is becoming an increasingly attractive prospect for buyers and sellers, with technology proving a great facilitator to brokering an attractive deal.
Keeping up with the trends
Research from the Global Business Travel Association (GBTA) found the barriers that previously stood against the prospect of consolidation are now beginning to tumble, thanks to technological resources.
One-half of travel buyers have either consolidated their meetings, events, and/or travel programs, or are currently in the process of doing so. Businesses have recorded a 14 per cent growth in consolidation of their meetings, events and travel programs over the past five years, with a 28 per cent increase in completed consolidations.
The GBTA study showed that almost all buyers with these consolidated programs have united their travel (96 per cent) and meetings (94 per cent) programs. However, only 43 per cent have done so with their event programs - a trend that will surely rise as SMM programs and technologies show greater value prospects.
What's more, four out of five buyers said they find every aspect of program consolidation appealing, with GBTA Vice President of Research Joseph Bates saying "it's no surprise they are increasing in popularity".
When we look at the biggest roadblocks to buyers and the common advantages of bringing travel and event RFPs together, it's easy to expect these figures to increase even more, as buyers find a new avenue to add value to their MICE events.
Are buyers needs being considered?
The wish list of buyers who are yet to consolidate their travel and meeting RFPs allows us to see notable areas of improvement.
GBTA found that the three biggest desires for buyers were:
- Accurate hotel rates to be displayed in their global distribution systems,
- An ability to search for hotels that will receive and negotiate RFPs, and
- The ability to see the hotel rates and amenities secured by other companies.
By reducing duplication, these hurdles can be confronted only once through consolidating RFPs for both travel and events. What's more, there are various other advantages that beg the question: why aren't more buyers doing this yet?
Are there any benefits to consolidating these RFPs?
Buyers conducting an RFP are faced with time and budget challenges. There could be delays in getting approval from internal superiors, proposals from the seller that are not fully compliant with their overall travel and meeting requirements, and the frustration of managing unforeseen circumstances and reconciling this with the budget.
When we look at some of the benefits people quote when consolidating meeting and travel RFPs, solutions become clearer.
The most commonly cited driver for consolidating RFPs among GBTA's respondents was to improve visibility and transparency of meetings, events and/or travel costs. This bore fruit, too, with almost four in five businesses saying they have been successful in this endeavour thanks to bringing their meeting and travel RFPs together.
Other oft-quoted and popular benefits of fully consolidating these two programs include the ability to:
- Better leverage negotiation strategies,
- Maximise spend,
- Find better negotiated rates and dynamic pricing,
- Increase efficiency, and
- Improve the final service for stakeholders.
How important is duty of care?
Understanding the legislative requirements around your duty of care and navigating this is a challenge many organisations face today.
Procuring your events and travel together and including duty of care requirements in a tender is the best way to ensure safety for your employees when they travel abroad, whilst giving management the peace of mind that the organisation is protected in the event of the unexpected.
The added layer of TMC expertise in procuring event travel will help your organisation to assess:
- the likelihood of the relevant hazards or risk occurring,
- the degree of harm that might result from the hazard or risk,
- what the person knows about the hazard or risk and the ways of eliminating or minimising the risk, and
- suitability of ways to eliminate or minimise the risk.
In 2008, the GBTA partnered with iJET Intelligent Risk Systems to develop the Travel Risk Management Maturity Model™ (TRM3™).
According to iJET, these key process areas (KPAs) are the main components of any TRM program. At the lower levels of program maturity, these KPAs would be implemented within the travel program.
However, at the higher levels, these processes are integrated into broader organisational risk management and business resilience programs.
To begin managing travel related risks, employers need to review KPAs in relation to their own TRM program.
This structured analysis will help to identify where the gaps are in any given travel risk management plan.
This is where organisations managing their travel and events jointly move into ‘best in class’ for events travel management and meeting their duty of care requirements.
Knowing what's going on with reporting processes
Reporting on events travel spend is another area where organisations who procure events and travel as a joint activity can truly reap the benefits both in hard and soft dollar savings as well as efficiency gains within their business.
With consolidated reporting managed by an experienced account manager, in conjunction with your events management provider, your organisation will benefit from:
- clear interpretation of your events travel spend and smart recommendations for change,
- consistent policy management to drive compliance,
- improved purchasing power through consolidated expenditure, and
- reduced complexity and improved transparency on travel expenditure.
A dedicated account management team in partnership with your events provider will also ensure your program runs efficiently, meeting the Service Level Agreement (SLA) in each market. This can be undertaken whilst continually evolving your travel program strategy and conducting regular reviews to help your company maximise its travel budget.
With in-depth understanding of all aspects of the travel industry, including current global airline and hotel trends, traveller risk management, payment solutions and the latest technology solutions, you’ll be set apart from the rest.
Your account manager and events management provider will advise your organisation on booking processes, travel patterns, policy setting and company behaviour. By connecting your event management provider's data from an event management system such as Cvent to your travel expense data, your organisation will achieve insights and savings that were previously impossible.
Working in the real world - The Marriott example
The difficult landscape for negotiating price on an RFP is a good instance of how consolidation can help. In 2015, Marriott International saw its group booking rates increase by 5 per cent as they used an increased appetitive for incentive travel and events to boost their revenue.
It left buyers with less leverage when negotiating a price. In fact, Marriott's CEO Arne Sorenson explained it perfectly: "Meeting planners are worried about securing availability more than negotiating hard on rate.
"Our [group] booking window is lengthening, so we've got a bit more business on the books today for 2016 than we did a year ago."
Marriott International is not the only hotel in this position, either. In a seller’s market, buyers need to influence the decisions of venues to give them a better incentive to agree to your terms. Bundling travel and event RFPs is a proven way to do just that.
By consolidating travel and event RFPs, event planners and buyers have a better pitch, with more volume for the hotel, meaning they have extra leverage when bartering a rate. This is on top of the clarity, efficiency and visibility that comes with consolidation.
What’s holding you back?
By bringing your travel and event RFPs together, you're giving the seller a harder decision to make: is this opportunity for more volume, revenue and potential market share worth negotiating on? Can we have greater confidence of the safety and security of our employees whilst also achieving greater visibility on travel spend to assist with supplier negotiations? By improving your RFP offering, businesses are pushing them more firmly to answer with a resounding "yes".
Of course, this applies for businesses who are planning to broker both a corporate event and a travel package, giving them a better negotiating strategy. If that is the position you're in, there's only one question left to ask yourself ... "What are you waiting for?"