Is Travel Procurement Converting on DE&I?

By Chris Davis

For the first time in more than two years, many travel managers are expecting a travel bidding-and-sourcing cycle that looks something like pre-pandemic processes, with annual requests for proposals, supplier negotiations and performance-based contracts. For some, though, the slowdown in business travel caused by Covid-19 afforded them the opportunity to reshape their procurement process with an eye toward diversity and inclusion, with deeper and more detailed assessments of suppliers' diversity initiatives, the makeup of their management teams and their supply chains and the relationship with their business travelers.

It's a strategy with as many goals as approaches. Some companies find it sufficient to gear a certain percentage of their travel volume to women- or minority-owned suppliers. Others, especially large companies, are approaching travel procurement as part of a companywide procurement strategy that assesses would-be supplier partners in all facets of industry, with executives dedicated to diversity efforts heavily involved in the sourcing process. Still others—maybe even a slight majority, if the results of a recent BTN survey are reflective—aren't yet doing much of anything on this front.

As such, assessing diversity, equity and inclusion efforts within travel procurement processes can be a bit of a moving target, as there remains wide variance among companies not only in goals and technique but also intention. Still, there seems to be a level of industry consensus that those efforts have gained momentum in many companies during the pandemic and in the wake of the 2020 protests after the death of George Floyd, and in many cases those efforts have gained sophistication and rigor.

 RELATED: Sourcing Diversity in the Travel Supply Chain

For the first time in more than two years, many travel managers are expecting a travel bidding-and-sourcing cycle that looks something like pre-pandemic processes, with annual requests for proposals, supplier negotiations and performance-based contracts. For some, though, the slowdown in business travel caused by Covid-19 afforded them the opportunity to reshape their procurement process with an eye toward diversity and inclusion, with deeper and more detailed assessments of suppliers' diversity initiatives, the makeup of their management teams and their supply chains and the relationship with their business travelers.

It's a strategy with as many goals as approaches. Some companies find it sufficient to gear a certain percentage of their travel volume to women- or minority-owned suppliers. Others, especially large companies, are approaching travel procurement as part of a companywide procurement strategy that assesses would-be supplier partners in all facets of industry, with executives dedicated to diversity efforts heavily involved in the sourcing process. Still others—maybe even a slight majority, if the results of a recent BTN survey are reflective—aren't yet doing much of anything on this front.

As such, assessing diversity, equity and inclusion efforts within travel procurement processes can be a bit of a moving target, as there remains wide variance among companies not only in goals and technique but also intention. Still, there seems to be a level of industry consensus that those efforts have gained momentum in many companies during the pandemic and in the wake of the 2020 protests after the death of George Floyd, and in many cases those efforts have gained sophistication and rigor.

RELATED: Sourcing Diversity in the Travel Supply Chain

When Covid-19 hamstrung business travel, "it got quiet, and when things get quiet, other things get louder," said Susan Lichtenstein, senior vice president of global travel strategies for Partnership Travel Consulting and a founder of the Travel and Meetings Society, an industry task force that examined diversity issues, among others.

"When it got quieter in the travel field, the social voices rose up, including in our industry," Lichtenstein said, noting TAMS' efforts coincided with the Floyd protests. " And this gave companies an opportunity to look at other things in their companies. Like, what are we doing? How are we doing? … Because those opportunities started to rise up, those conversations are now changing."

Some of those changes are impacting travel sourcing strategies. According to an April BTN survey of 163 business travel buyers, about 59 percent agreed or strongly agreed that their organization considers potential partners' DEI initiatives when considering doing business with them. TCG Consulting managing director Desiree French said her experience is roughly similar, and though some clients look to apply basic diversity and procurement principles to the process—determining travel suppliers that can be classified as woman- or minority-owned, questioning suppliers in RFPs, and deploying mechanisms to track and collate their answers—others have taken the next steps to a more sophisticated process.

"Some of them will have kind of a standard question," French said, but others have progressed to asking questions that reflect deeper relationships with suppliers on the topic. "How are you promoting [diversity efforts] within? How will you partner with us to promote it? If we're truly going into a partnership, how are we going to manage it together?"

French cited one client who during the sourcing process requested one supplier to partner with the organization on an internal week-long DE&I event for employees. "One got involved with them and came to their corporation … and talked about what they're doing and how they're handling their customers when they're coming on board. They literally went and took the time and attended this event to promote it within the client organization as well."

When Covid-19 hamstrung business travel, "it got quiet, and when things get quiet, other things get louder," said Susan Lichtenstein, senior vice president of global travel strategies for Partnership Travel Consulting and a founder of the Travel and Meetings Society, an industry task force that examined diversity issues, among others.

"When it got quieter in the travel field, the social voices rose up, including in our industry," Lichtenstein said, noting TAMS' efforts coincided with the Floyd protests. " And this gave companies an opportunity to look at other things in their companies. Like, what are we doing? How are we doing? … Because those opportunities started to rise up, those conversations are now changing."

Some of those changes are impacting travel sourcing strategies. According to an April BTN survey of 163 business travel buyers, about 59 percent agreed or strongly agreed that their organization considers potential partners' DEI initiatives when considering doing business with them. TCG Consulting managing director Desiree French said her experience is roughly similar, and though some clients look to apply basic diversity and procurement principles to the process—determining travel suppliers that can be classified as woman- or minority-owned, questioning suppliers in RFPs, and deploying mechanisms to track and collate their answers—others have taken the next steps to a more sophisticated process.

"Some of them will have kind of a standard question," French said, but others have progressed to asking questions that reflect deeper relationships with suppliers on the topic. "How are you promoting [diversity efforts] within? How will you partner with us to promote it? If we're truly going into a partnership, how are we going to manage it together?"

French cited one client who during the sourcing process requested one supplier to partner with the organization on an internal week-long DE&I event for employees. "One got involved with them and came to their corporation … and talked about what they're doing and how they're handling their customers when they're coming on board. They literally went and took the time and attended this event to promote it within the client organization as well."

“While it may not quite be a central decision-making factor today—as diversity & inclusion becomes further entwined with sustainability/[environmental, social and governance], employee well-being and experience—we see that this topic will continue to increase its leverage as part of the decision-making process for corporates.”

- BCD Travel’s Yvette Bryant

Taking New Steps

Still, most respondents to BTN's survey said their organizations haven't taken steps to help ensure a diverse supplier base. When asked if their organizations work to ensure that a certain percentage of travel supplier partners are owned by women, people of color and/or marginalized individuals, 51 percent said they didn't. About 28 percent said they did, and another 12 percent offered an open-ended answer, some noting future plans to do so, others noting efforts outside of a specific percentage, but some made clear they had no intention of doing so.

But the tides may be changing, regardless of the latter group's efforts. "We have seen a large increase in both the number of questions we're asked around diversity and inclusion as part of the TMC RFP process as well as the types of questions and the topics within D&I that they address," BCD Travel senior vice president of diversity & inclusion Yvette Bryant told BTN via email. "This is also starting to become a consideration as part of the sourcing process for supplier programs too."

But turning intentions and questions into decisions and actions for many organizations can be a big step. While about 41 percent of respondents to BTN's survey indicated that their organizations do assess would-be suppliers' DE&I stances in RFPs—44 percent said they do not, the rest didn't know—only a fraction of them indicated that information could serve as disqualifying or affirming to the supplier.

Taking New Steps

Still, most respondents to BTN's survey said their organizations haven't taken steps to help ensure a diverse supplier base. When asked if their organizations work to ensure that a certain percentage of travel supplier partners are owned by women, people of color and/or marginalized individuals, 51 percent said they didn't. About 28 percent said they did, and another 12 percent offered an open-ended answer, some noting future plans to do so, others noting efforts outside of a specific percentage, but some made clear they had no intention of doing so.

But the tides may be changing, regardless of the latter group's efforts. "We have seen a large increase in both the number of questions we're asked around diversity and inclusion as part of the TMC RFP process as well as the types of questions and the topics within D&I that they address," BCD Travel senior vice president of diversity & inclusion Yvette Bryant told BTN via email. "This is also starting to become a consideration as part of the sourcing process for supplier programs too."

But turning intentions and questions into decisions and actions for many organizations can be a big step. While about 41 percent of respondents to BTN's survey indicated that their organizations do assess would-be suppliers' DE&I stances in RFPs—44 percent said they do not, the rest didn't know—only a fraction of them indicated that information could serve as disqualifying or affirming to the supplier.

But stances toward DE&I and procurement at some companies are being led by an overall corporate sourcing strategy and effort. Especially at larger companies, the decision as to whether a potential supplier's DE&I efforts are disqualifying or advantageous won't necessarily be made by the travel department alone.

"As the resource dedicated to diversity & inclusion continues to increase, so does the stakeholder ownership and accountability for integration across business functions—and that includes travel," according to BCD's Bryant. "While it may not quite be a central decision-making factor today—as diversity & inclusion becomes further entwined with sustainability/[environmental, social and governance], employee well-being and experience—we see that this topic will continue to increase its leverage as part of the decision-making process for corporates."

The broadening of DE&I efforts and the formalization of the role within corporations will have a direct effect on the suppliers they choose for their managed travel program, Lichtenstein said.

"If you go on LinkedIn job postings, you will see at least one out of 10 jobs is for a new diversity leader," she said. "Those leaders will then help the companies determine their suppliers in the future. You must have somebody dedicated to this with a voice that's loud enough and assertive enough in a way that people embrace it inside a company."

But stances toward DE&I and procurement at some companies are being led by an overall corporate sourcing strategy and effort. Especially at larger companies, the decision as to whether a potential supplier's DE&I efforts are disqualifying or advantageous won't necessarily be made by the travel department alone.

"As the resource dedicated to diversity & inclusion continues to increase, so does the stakeholder ownership and accountability for integration across business functions—and that includes travel," according to BCD's Bryant. "While it may not quite be a central decision-making factor today—as diversity & inclusion becomes further entwined with sustainability/[environmental, social and governance], employee well-being and experience—we see that this topic will continue to increase its leverage as part of the decision-making process for corporates."

The broadening of DE&I efforts and the formalization of the role within corporations will have a direct effect on the suppliers they choose for their managed travel program, Lichtenstein said.

"If you go on LinkedIn job postings, you will see at least one out of 10 jobs is for a new diversity leader," she said. "Those leaders will then help the companies determine their suppliers in the future. You must have somebody dedicated to this with a voice that's loud enough and assertive enough in a way that people embrace it inside a company."

The formalization of DE&I efforts and the attention paid to it by corporations in turn will drive suppliers to develop more comprehensive strategies to appeal to would-be clients, said TCG Consulting president Graham Ruskin.

"It's a focus beyond the spend. It's, "What do I expect from my supplier?' " Ruskin said. "Similarly, sustainability used to be a checkbox. Now organizations are facing a lot of pressure to say, tell me more about sustainability, and that will drive a company toward further emphasis on sustainable travel. With DE&I, we're seeing the supplier say, 'How do I align with what the industry has said is very important to us?' That's where we're seeing … all the major players putting an emphasis on this, whether it's C-level positions or whether it's updating policies. That's kind of the piece that is tipping the scale."

The ways in which these trends will play out at companies of varying sizes and throughout the world remains to be seen, as travel procurement strategy hasn't traditionally been marked by its embrace of rapid or profound change. But that change does appear to be happening, and buyers and suppliers alike likely will have to adapt to a new reality.

"If we could do the right thing all the time and make money, the gorgeous world we're going to live in," Lichtenstein said. "We're at the time of our society right now where it's time to do the right thing."

The formalization of DE&I efforts and the attention paid to it by corporations in turn will drive suppliers to develop more comprehensive strategies to appeal to would-be clients, said TCG Consulting president Graham Ruskin.

"It's a focus beyond the spend. It's, "What do I expect from my supplier?' " Ruskin said. "Similarly, sustainability used to be a checkbox. Now organizations are facing a lot of pressure to say, tell me more about sustainability, and that will drive a company toward further emphasis on sustainable travel. With DE&I, we're seeing the supplier say, 'How do I align with what the industry has said is very important to us?' That's where we're seeing … all the major players putting an emphasis on this, whether it's C-level positions or whether it's updating policies. That's kind of the piece that is tipping the scale."

The ways in which these trends will play out at companies of varying sizes and throughout the world remains to be seen, as travel procurement strategy hasn't traditionally been marked by its embrace of rapid or profound change. But that change does appear to be happening, and buyers and suppliers alike likely will have to adapt to a new reality.

"If we could do the right thing all the time and make money, the gorgeous world we're going to live in," Lichtenstein said. "We're at the time of our society right now where it's time to do the right thing."

“If we could do the right thing all the time and make money, the gorgeous world we're going to live in. We're at the time of our society right now where it's time to do the right thing.”

- Partnership Travel Consulting’s Susan Lichtenstein