A year after some buyers questioned how low air and hotel rates and demand could go, the quandary for many now is how high prices can rise. Faced with strong demand, reduced inventory and a renewed resolve to turn a profit, airlines are increasing rates faster than some expected, according to an extended Supply Chain report.
Faster-than-expected demand spikes in 2010 likewise prompted higher hotel rate quotesduring the exceptionally difficult negotiating season that for many just wrapped, also according to Supply Chain. Managing the travel supply chain is rarely an easy task, but as detailed in the report, buyers might want to brush up on negotiating strategy and tactics as the pendulum has swung back to favor suppliers.
At a minimum, argues Perspective columnist Robert Langsfeld, buyers should analyze fares paid versus budgeted and alert senior management to any significant variances while there is time to adjust expectations.
Adjusting expectations, policies and programs is exactly what several companies profiled in this issue of Procurement.travelhave done in the face of rising prices, continual budgetary pressures or new corporate environments.
For example, Leading Practices offers insight on potential solutions for hotel rate squatting, or loading into global distribution systems rates for companies that haven't signed contracts. While it might sound like a good deal, the practice can harm corporations by diluting volume promised to contracted preferred hotels.
Global consolidation is the approach Kraft Foodstook as it studied how best to improve service, efficiency and savings, not only at Kraft, but also at newly acquired Cadbury. In less than a year, Kraft's travel management team consolidated travel across all operations in 72 countries with one agency, one global policy and five booking tools selected by region. Finally, it has a single view of travel.
M&T Bank found that it needed to adjust meetings policiesand embrace online attendee management to leverage its consolidated travel and meeting operations and prove its value to the organization.
Finally, in Case Study, read how some green meeting practices at Grant Thorntonsprouted into a more comprehensive green approach to meetings and travel management.