Travel Agency Category Procurement Intelligence Report

Travel Management market around the world is undergoing rapid transitions that have a massive potential to influence the way companies strategize for Travel Agency procurement and the cost they have to incur. 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 Travel Agency is expected to remain strong.

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.

To simplify the corporate travel and events process and enhance the end-to-end experience of users, suppliers are innovating with tools that aggregate the multiple fragments of this process such as booking, management of disruptions, customer service and spend within a single interface.

Travel Agency procurement best practices are moving towards a level of sophistication which is typically seen in traditional procurement categories. Category managers now have an attractive opportunity to adapt the best practices seen within this category as well as those being leveraged in other non-related categories. This report summarizes the best practices picked from across multiple categories that could work well for category managers involved with Travel Agency procurement strategy.

For example, 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.

Suppliers often charge substantial fees for cancelation and rebooking. Buyers should negotiate for low prices on these aspects to realize direct cost-savings.

Category buyers should invite bids from all potential service providers that have the ability to meet the overall requirements. Bids must be evaluated based on pre-defined parameters such as financial strength, reputation, service offerings, geographical presence, and track record. Buyers can use standard scorecards to evaluate service providers and provide necessary feedback to rationalize the given scores. This helps in the effective documentation of decision-making processes.

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