Four steps to prepare for travel procurement in 2021

Four steps to prepare for travel procurement in 2021

By Harry John

By Harry John

17 November 2020

While traveller safety remains the priority, reduced travel levels present buyers with the opportunity to consolidate spending and accelerate sustainability

Business travel had all but stopped at the height of the pandemic. Today the industry remains largely grounded, with the vast majority of companies having cancelled or suspended international and domestic trips.

Much remains up in the air, although the positive news from several late-stage coronavirus vaccine trials will have given travel managers cause for optimism.

Until an effective vaccine is widely available, there will be opportunities for category managers to add value. With employees travelling less, spending on transport and accommodation can be consolidated and sustainability initiatives accelerated.

There was much else to discuss besides sustainability when Procurement Leaders hosted a call between two multinationals recently, to compare their 2021 business travel plans. Four themes emerged from the exchange, as outlined below.

1) Travel restrictions

The discussion highlighted differences in the way organisations have restricted travel to all but the essential trips, in response to the Covid-19 outbreak.

The global travel manager for a speciality chemicals company explained how the business has put in place “severe travel restrictions.” Any domestic or international trip must now be considered essential by the company’s senior leaders. Pre-Covid-19, employees had to obtain approval from their line manager alone. Now senior management or members of the executive committee are involved in the authorisation of all trips.

The global travel spend lead for a pharmaceuticals company said they have no set definition of ‘essential’ travel, but employees’ line managers must approve all intercontinental travel.

Where air travel is required, within Europe, the pharmaceutical company’s staff fly business class. This is because European carriers guarantee an empty middle seat with business class tickets, the spend lead noted. At the time of writing, US carrier Delta Airlines also guarantees an empty middle seat with any booking. For that reason the pharmaceutical company is booking as many US flights as possible with Delta.

2) Evaluating suppliers’ Covid-19 safety measures

Ensuring the safety of those staff who continue to make essential business trips is a top priority. Both participants indicated they were working with their travel management providers to display information comparing hotels’ and airlines’ safety measures via their online platforms, to help guide employees to the safest travel options.

Yet they noted it was a struggle for the travel management companies (TMCs) to access and relay the most up to date information, because of the frequency with which travel suppliers are changing their policies and launching new health and safety initiatives.

In addition to working with their TMCs, the pharmaceutical company’s travel spend lead has built an intranet page displaying supplier hotels’ safety standards. The spend lead asks travellers who visit those hotels to provide feedback on whether their practices match their pledges, again to help employees to choose the safest option.

3) Planning for reduced spending in 2021

Respondents to Procurement Leaders’ Category planning during Covid-19 survey indicated businesses will cut their 2020 budgets in the travel category more than any other.

Both participants on the call said they were using 2019 figures as reference for their 2021 plans, because 2020 has been such an unusual year. They expected to spend around 50% of their 2019 travel budgets during 2021.

With the number of people booking hotel rooms expected to remain relatively low into early 2020, the pharmaceutical company has consolidated its hotels spending. “Availability will be less of a problem [in the near future],” the company’s spend lead predicted. Employees making bookings at hotels with fewer than 300 room-nights now do so through the company’s TMC, which reportedly offers pricing from a range of aggregators including Expedia and booking.com.

4) Demand management

Both participants indicated their companies are thinking critically about the long-term necessity of business travel. Partly in response to the pandemic and partly to meet the challenge of doing business more sustainably. “Sustainability must be worked on more seriously in travel,” said the chemical company’s global travel manager.

Aviation is responsible for 12% of CO2 emissions from all transport sources, and 2% from all human-induced emissions, according to figures from not-for-profit the Air Transport Action Group. Travel emissions vary by industry, but any organisation with an international travel programme has a responsibility to explore ways of reducing its environmental impact.

To that end, the pharmaceutical company’s spend lead is designing a “purposeful travel” strategy, to get staff to think more carefully about the impact of their travel on the environment over the long term.

The company is working with a travel management consultancy to encourage staff to make more sustainable choices. This includes building popups into the company’s online booking tools, which prompt travellers to think twice about their preferences. In practice this means encouraging more travel by train and asking staff to replace return-trips of one or two days with virtual meetings.

But buyers are likely to face difficulties in reducing travel demand. Following months of social distancing, “people are desperate for live interaction,” the spend lead noted.

Virtual conferencing software has helped to keep teams connected throughout 2020. But there are doubts over whether it will replace in-person meetings and events in the long term, assuming a lifting of travel restrictions. Many employees are experiencing ‘zoom fatigue’, and executives put a premium on face-to-face meetings.

Indeed, Global Business Travel Association’s (GBTA’s) September 2020 coronavirus poll suggestsmost travel executives (42%) expect business travel to fully recover within three years of scientists discovering an effective coronavirus vaccine.

Yet the pandemic has raised questions about whether ‘normal’ business travel was really necessary. Then there is the question of sustainability. A return to pre-Covid travel habits will not help companies meet their climate targets.

The pharmaceutical company’s spend lead is tackling entrenched attitudes towards business trips with straightforward pragmatism. Encouraging travellers to think twice about travel, they ask the question: “will your project fall apart if you don’t make the trip?” Unless making the journey has a material impact on a project or a deal, they say, “don’t do it.”

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