University of Texas travel manager of intercollegiate
athletics Kevin Maguire has been a longtime advocate of collective buying,
earning a Business Travel News best practitioner nod in 2004 for his success in
hotel consortia negotiations. Maguire repeated that honor this year by leading
efforts for collective buying across travel categories among college athletics
travel programs, an accomplishment some on the corporate travel side now are
seeking to mimic.
While collective buying waned during the strong seller's
market prior to the economic downturn, Maguire began rekindling efforts among
universities and athletic conferences about two years ago. Knowing difficult
economic times made forecasting travel volumes difficult, Maguire approached
suppliers from the standpoint of the buyers seeking similar benefits but with
each responsible for their own volumes.
"I proposed we look at it as an umbrella concept where
everyone has certain goals and you share in the overall benefits," he
said. "If you didn't make your projections, the rest of the group wouldn't
suffer."
Suppliers were eager to jump on board, Maguire said, both
because they sense a growing trend of collective buying in the travel industry
and because they knew college sports provide a fairly reliable source of
travel, less vulnerable to economic downturns. Some have massive programs, with
UT having more than one million room nights in the city of Austin alone, he
said.
"This time, it's almost every supplier out there,"
Maguire said. "We haven't had anyone push back yet."
So far, the Big 12, of which UT is a part, the Pac-10 and a
few other conferences have been the first to engage in collective buying. The
potential is enormous, however, with more than 13,000 colleges that ultimately could
be a part of the movement, Maguire said. "Colleges are like corporations,"
he said. "They want the bell cow to try it out first."
While getting price discounts is certainly a goal in
collective buying, Maguire said these recent efforts just as much have been
about procedures. With airlines, for example, the conferences have focused on
expediting checkin for large teams with massive amounts of equipment and
allowing checked-bag fees to be consolidated to a single charge for easier
payment processing, which expedites the process, according to Maguire.
The approach depends on the supplier, he said.
"Some will not talk about pricing at all to begin with,
but they'll talk about policy," Maguire said. "You pick your first
battle based on the response of the supplier and move on to the other
conversations toward the end."
The conferences also are working together in ground
transportation negotiations. "That's new, because technology has lagged
behind in that category, but now it's there," Maguire said. "If you
have 50 universities or just one, they have the ability to give you reports and
track what you do."
The collective negotiations have focused not on requests for
proposals but on letters of agreement, with each university structuring a
contract within its guidelines. RFPs could be counterproductive, he said. For
example, some universities have massive room-night needs smaller hotels cannot
handle, and the group would not want to automatically eliminate those hotels
for smaller schools through an RFP with rigid guidelines.
Maguire expects to complete negotiations for the first
contracts within a few months. University operations require a legal process
before final approval, he said.
In the meantime, Maguire is passing his knowledge on to
corporate travel buyers who have an interest in collective buying.
"I probably have four or five corporations a week call
me and ask me how to do it," Maguire said. "Everybody seems to want
to do some kind of consortia or collective buying."