The Supplier Mindset in 2025: What Are They Thinking?

What do the American Airlines distribution shenanigans + Marriott downsizing its corporate team + British Airways loyalty program changes have in common? They each give the buyer a fly-on-the-wall view of supplier boardroom commercial strategy discussions. How can we use history to help predict what the future might look like for corporate travel programs in 2025? I’d start by unpicking those shifting supplier sands to uncover what the overall strategy might be. In turn, it will give us a sense of how travel managers should prepare for change in their programs.

Ready? Let’s get inside of the supplier executive’s mind.

It Starts with the Numbers

In most companies it all starts with the numbers.  What’s the “plan”—meaning what will drive revenue and sales, what is the cost output and, therefore, what’s left to recognize in profit (and to distribute in dividends to shareholders). The costs will be summarised in a Profit & Loss format with all the costs rolled up into General Ledger categories such as people, real estate, professional services, T&E, etc.  In that boardroom they’re looking at a very high-level view and would have many excel sheets and documents in support of the final numbers and strategies.

Supplier strategies will, at a high level, revolve around growing revenue and sales, driving efficiency and, finally, improving the company for the future (for example, via product offerings and/or customer and employee value proposition). Each will have an impact on their bottom line and hopefully most suppliers are now thinking of the triple bottom line “People, Planet, Profit.” How they divide investments across all three is where the boardroom debate starts.

To understand the supplier mindset as it relates specifically to business travel, we need focus on supplier growth and efficiency, because those are the two drivers at the heart of the topics causing rumbles across the business travel industry and forcing change for the travel buyer.

Distribution - A supplier’s ability to sell their inventory to the customer

Suppliers look for the value/return per channel. For instance, making a comparison of a brand.com vs a TMC vs an OTA booking.  What’s the cost of acquisition and profit per unit of each? I’d hope they’re also looking at these numbers in their entirety, the full cost of doing business with each sector including how they support the direct bookings. The supplier shifts mentioned earlier—at AA, BA and Marriott—would each have been analyzed for its potential return (financial and otherwise) to decide where to place their strategic bets.

In addition to the already complex money flows that exist across the travel value chain (including the business travel value chain), there’s now keen interest in IT infrastructure, the transaction cost and ability to “merchandise” or better sell a supplier’s product. In short, the supplier saying, we’re happy to reward you where we see value. Value might be financial but could also be brand related, co-creation opportunities, etc.

Payment

For years suppliers have had to absorb (or pass on) credit card merchant fees, that’s a costly business for what can be seen by the supplier as highly transactional. Suppliers will be looking for alternative payment mechanisms, this may also be attached to their channel strategy (see distribution) with proof of concepts in the works around blockchain as the alternative.

Buyer advisory, distribution & payment: Do you know the value chain for each of the categories you manage, e.g. airline to distribution to payment to booking channel to customer? Who are the players and money flows? Can you see the differences and why a brand.com booking may have a perceived higher return? Doing so will be critical to travel management success in 2025.

Loyalty

Who own’s the customer? Every supplier wants to own the customer. Loyalty programs, valued traveler support delivered only via the supplier app and more, all designed to better understand and retain the customer. Now the question is who is the employee more loyal to? Their employer, who pays their salary or the travel supplier who upgrades them and provides access to subsidized vacation options. You’d think the employer would always win but data tells us otherwise.

Buyer advisory: How valuable is your traveler sleeping in room 224 or sitting in seat 13C vs the brand.com customer sleeping or sitting next door? What information are suppliers gathering inside loyalty programs and why might this be beneficial? What benefits do your travelers value and why?

There’s a lot to consider here. Recent history has afforded buyers an inside-the-mind view of the supplier, including commercial strategies for 2025 and beyond. The savvy travel buyers will watch all this closely and spend time to connect the dots and apply the learnings—not just into their sourcing strategy but their overall travel and expense program architecture.