Flights | Market, Trends, Growth | Suppliers Analysis

Strategic Sourcing Guide to Flights Procurement

Overview

A changing ecosystem within the Business Travel market also affects the procurement process, cost dynamics and supplier attractiveness for the buyers of Flights. With regional and national boundaries blurring in today's corporate world, companies increasingly find themselves with a latent need to bring together geographically distant teams, customers and stakeholders. Therefore, the demand outlook for Flights is expected to remain strong.

The availability of advanced technologies has prompted travel and event service suppliers to heavily invest in them to improve efficiencies and customer experience. However, most have learnt that technology alone is not a replacement for the human touch when it comes to customer service. As a result, suppliers are spending on both counts - technology and customer service staff. Till the time a formula for perfect balance between the two is discovered, buyers should expect to bear some of this increased OPEX of suppliers.

Travel managers have begun to understand the implications of their colleagues' personal data being handled by a third-party provider, more so after several high-level data breaches. While it is still not possible to completely avoid the data sharing, buyers are more diligent in inserting elaborate data security and confidentiality clauses in their contracts. These developments increase the risks and compliance requirements, which in turn adds to the cost of services.

Flights Procurement Best Practices

It has become imperative for category managers to remain as agile as possible in terms of their procurement practices. However, it is not always easy to quickly spot and implement alternative practices in a category like Flights. To help quick decision making, this report advises on several procurement best practices that have worked well for category managers.

For example, Engage with suppliers that use technologies, such as SMMPs and holograms, to enable buyers to track expenditure and save on travel costs. This will significantly reduce overheads for buyers.

Buyers should incentivize employees that select cost-effective options by providing them with rewards at the end of the year based on the total cost-savings earned. Incentives can be in the form of free upgrades on airlines, hotels, and car rentals.

It is important for category managers to track and measure the performance of suppliers against a set of defined KPIs that are agreed upon during the contract negotiation phase. The performance of suppliers can also be linked to a portion of their fee that can be paid upon rendering of services in a satisfactory manner. For instance, category buyers should assess supplier performance for adherence to allocated travel budgets.

Activate your free account to gain easy access to cutting edge research and insights on consumers, emerging price trends, global and regional suppliers.

Risks in Flights procurement

Flights procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for Flights procurement. Some examples include:

Procurement without consulting the actual users of Flights may result in a mismatch in expectations of the buyer's internal stakeholders versus the actual contract executed
An increase in real estate rates, specially across tier 1 cities has been observed in emerging economies. This will directly increase delivery costs of “Business travel accommodation” suppliers, leading to increased costs for buyers
When requirements of the buyers are not absolutely clear or usage patterns are not stable or predictable, suppliers often build in \"cost buffers\" for unforeseen risks due to a lack of complete understanding on buyer's requirements. This increases the risk of overspending on Flights

For detailed insights and complete access to our report library, activate your free account!

Who should read this report

The report is intended to serve as a one-stop reference guide for Flights procurement strategy and offers a perfect blend of category basics with deep-dive category data and insights. Therefore, it is ideal for category beginners looking for “Flights: Procurement Report 101” as well as for category experts actively tracking the global Flights procurement market.

You may have just initiated your research to design a winning Flights procurement strategy, or you may be a category expert looking for strategic insights and updated data.Either ways, the report has your requirements covered.

SpendEdge Insights Subscription

Unlock SpendEdge's comprehensive procurement report collection with ease through our procurement platform.

Subscribe Now

Key questions on Flights procurement answered by this report

Procurement decisions can prove to be costly in the absence of careful deliberation and evaluation of every available option. In fact, more than 90% of the decision makers we work with acknowledge that timely availability of up-to-date category intelligence can help them make better purchasing decisions. More than 80% of them believe that in-house category intelligence needs to be updated periodically to achieve full benefits. If you have read so far, we are quite sure you agree!!

The Flights procurement report helps take more informed decisions by placing all the critical information and advice at the fingertips of a decision maker. It also specifically answers some of the key questions that we have been routinely asked during our industry outreach initiatives:

What is the spend potential in the Flights market?
What is the correct price to pay for Flights? What are the key trends and factors that influence current and future pricing?
Which selection criteria are the most important for Flights Suppliers Market?
Who are the top Flights suppliers? What are their cost structures?
Which negotiation levers can reduce Flights procurement cost ?
What are supplier margins in Flights market?
What are the best practices for Flights procurement and what are the potential risks?

SpendEdge Insights has helped procurement professionals and sourcing teams manage multiple spend areas and achieve more than $2 billion in savings. Activate your free account today!

Flights Category Insights: What is inside

The Flights market report offers a complete picture of the supply market and analyzes the category from the perspective of both buyers and suppliers. Analysis of the category trends, procurement best practices, negotiation levers and overall category management strategy advisory are interspersed with in-depth data and commentary on spend outlook, pricing ecosystem and supplier landscape drilled down to a region-level coverage.

Data

A key highlight of this report is the in-depth outlook created on Flights procurement spend and pricing trends. The report further delves deep into the aspects of cost structure, total cost of ownership and supplier margins for Flights. A dedicated section to supplier profiles and evaluation helps decision makers cast a wider procurement net and identify gaps in existing relationships.

Insights

Along with specific category and supplier intelligence, the publication also includes curated insights on Flights market trends, price influencers and inherent risks. These insights help the decision makers prepare for market shaping trends in advance and create alternative strategies for changes in the market conditions.

Advisory

Additionally, the report also advises on the best practices and strategies to manage the Flights category efficiently. Negotiation levers and opportunities are explained in detail along with quantification of their potential. Benchmark KPIs for supplier and buyer performance management are also aggregated to better organize the category objectives. Other themes of advisory include ideal procurement organization structure, enablers to achieve KPIs or category objectives and ideal SLAs to have with suppliers.

Category Ecosystem

Buyer and supplier ecosystem
Competitiveness index
Buyer and supplier power
Threat of new entrants and substitutes

Global and Regional Sourcing Insights

Category spend
Spend growth
Dynamics
Opportunities

Pricing and Cost Analysis

Pricing outlook and data
Drivers of pricing
Cost structure and inputs cost
Total cost of ownership
Pricing models and margins

Cost Saving Opportunities & Negotiation Strategies

Buyer and supplier side levers
Quantified cost saving opportunities
Negotiation strategies and quantified outcome

Procurement Best Practices, Strategy and Enablers

Procurement excellence
Sustainability and innovation
KPIs and category enablers
Risk management and outsourcing

Vendor Analysis

RFx essentials and selection criteria
SLAs
Supplier evaluation metrics
Detailed supplier profiles

Our research is complex, but our reports are easy to digest. Quantitative analysis and exhaustive commentary is placed in an easy to read format that gives you an in-depth knowledge on the category without spending hours to figure out “what does it mean for my company?”

❮ ❯

Category Research Framework

SpendEdge presents a detailed picture of Flights procurement solutions by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key category influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.