Sourcing the travel category is the same as most other procurement categories – you need to start with good spend data. The trick with travel data is knowing where to get it and how to use it. Let’s start by dividing the travel category into its major food groups: airlines (or just “air”), hotels and rental car. These sub-categories each have different places to get useful sourcing data. For the impatient reader:
- For airline spend – get it from your firm’s travel management company (TMC, a.k.a. travel agency)
- For hotel spend – use a combination of your firm’s TMC booking data and your corporate card data
- For rental car spend – get it from your contracted rental car supplier
Here’s more on each of the sub-categories:
The best place, by far, to get useful sourcing data for your air spend is your firm’s travel management company (TMC). I’m assuming that your travelers are booking most of their trips through the approved TMC, either by calling the travel agency, or by using its corporate online booking tool, such as GetThere, Orbitz for Business, or your travel agency’s own version of these types of online booking tools.
The key is that you, the sourcing manager, can only get your travelers’ booking data when your travelers use your approved booking channels. You’ll never get booking data for travelers when they use public internet booking sites like Orbitz (related to, but different from Orbitz for Business), Expedia, or their uncle’s travel agency. It’s worth repeating: you need your travelers to book air travel where you can get the data.
What about corporate credit card data, you ask? Well, for airline sourcing, it’s a fairly poor source. If you have little or no booking data from TMCs, you’ll have to make do with your corporate card data, but it won’t be easy. The main reason is that credit card data generally lacks the details needed for airline sourcing (dominant fare class, logical O&D, one-way or round trip indicator). While card data is getting better, especially in the U.S., it is a distant second choice.
For this category, you need to combine your TMC data with your corporate card data. Why? Roughly 50% of all corporate hotel reservations are made outside of approved corporate booking channels. Your travelers may book all their airline tickets with your company’s TMC, but half the time they’ll go to the hotel’s website or call center to make the hotel reservation – so you lose the visibility of half of your hotel bookings. Fortunately, credit card data is fairly good for hotel sourcing. It usually has what you need to identify the hotel (hotel name, address and phone number) and the total amount charged.
Unfortunately, unless your credit card company can provide you the detailed break-out behind each hotel charge (called “folio” data), you won’t get a key piece of data – the room rate. That’s why, for hotels, you need to merge your credit card data with your TMC booking data – the TMC data will always have the booked rate. Part of scrubbing hotel data involves merging these two data sources and imputing the likely room rate for those cases where an exact match is not possible. (I’ll cover data scrubbing in a future post).
The best place, by far, to get solid spend data about your car rentals is from your contracted car rental supplier. The booked data from your TMC and the charged data from your corporate credit card will lack necessary details, mainly the time and mileage charges. Again, I’m assuming that most of your travelers use your firm’s contracted rental car supplier. Most business travelers do, if for no other reason that they want whatever liability protection your company offers when using the approved rental car firm.
Remember, every traveler is a travel buyer. You need to get your travel buyers to buy through the approved channels. This means booking with your company’s approved travel agency or online booking tool, and paying with your firm’s corporate credit card. Do this, and you’ll have much more – and better – travel spend data. Up next: Travel Data Scrubbing