BLOG COMMENT - Car Hire. Pardon me?

Who truly understands car hire except those who are in the business of hiring out cars? On one side you have the 'premium' companies such as Avis and Hertz and then, well, everyone else! Unlike airlines the car hire companies offer the same directly comparable means of transport but at different prices. Why? How? After many years in the TMC business I still haven't a clue. Well not really! I expect the bigger companies are global and have a bigger inventory but should they cost so much? OK, so they can (or could) afford to pay middle men incentives to promote them. And they could always leverage their coverage and reputation but even so the price gap is simply too high. So what are they doing about it? I guess they are doing what everyone else is doing i.e. reducing their overheads and becoming more competitive. Or are they? Who knows? Car Hire has started to shift away from travel procurement anyway. Good job too if everyone else understands as little as me.

BLOG COMMENT - Branson's Bile

Submitted by Mike Platt on Thu, 2012-09-13 16:59. It is regretable that Richard Branson seems to have thrown all his toys out of the cupboard over the West Coast rail service. I know he can be petulant but this is taking it to extremes. To my mind the process went that the government went to tender, people bid, bids were evaluated and the successful candidates notified. Quite stanard and quite reasonable. Now I know the government ties itself up in rules and regulations which are further exacerbated by European legislation and this is what I presume Mr Branson is trying to manipulate. I personally have been through all this during the MOD travel tender and, although they thought about it, none of the other contenders considered they would gain in the long or short term by formally objecting to the process. For once I am four square behind the government on this. The fact that the man is Richard Branson should not be enough to drive anyone into a U-turn on a decision based on price and service. If they fail? Well then a review might be necessary and MR B will have his chance again.

BLOG COMMENT- Off the rails

Selling rail tickets is a real pain....if you are a TMC. First there is the illusion that rail is cheap and second, the illusion that it is easy! I swear it would be easier to accurately predict the weather than consistantly find low prices in peak periods! Poor old TMCs have to provide this service if they wish to offer a full 'one stop shop' package of products. There is no point in saying you will provide lucrative air products and then suggest they do what they like with rail. It just does not fit and invites segmentation of all services. Meanwhile their online rail booking specialist 'partners' sit like vultures on the sidelines ready to zoom in after the kill. These operators such as Trainline and Evolvi in Europe have set up their services to support direct sell at a price. TMCs can only sell at that price plus some. Each tries to negotiate what that 'plus' will be and uses their current 'one stop' offering as a compelling bargaining chip. And the traveler? I can here him now."What,you expect me to pay these people a fee for a RAIL ticket? I can get what I need at the station". They have a point, they can get it at the station if they have the time/inclination to search for it. Rail commision used to pay for a lot of this but that too is diminishing. Oh what joy is net pricing. Then you have the American buyer with their fascination for transaction fees. In the USA most travel is by air but when they buy in Europe they seem to get amnesia over the subject. The travel type percentages are radically different here but they really do not recognise this as an issue. It is. Transaction fees work in the USA. In Europe they don't. The European market is crawling with these fees but they do not really work and TMCs find all sorts of ingenious ways to get round them. Everything from declaring rail bookings as 'free' but hiking air rates to compensate or perhaps outsourcing rail to an online self book service (at higher rates)and charge a small ticketing fee. Somebody really has to do the Maths here and either pay up centrally or give up on your TMC all inclusive service.

BLOG COMMENT - TMCs (Agents)

The vast majority of TMCs (even the larger ones) still rely heavily on supplier income despite what they may say. Could you survive and thrive on what you pay them? I don't think so. There are ways and means now to get the definition of these 'incentives' changed so they are not included in any corporate deal. Agents have needed to do this in order to fund central and associated costs plus earn sufficient ROI.

BLOG COMMENT - Government Buying

I wonder why it is that Governments buy so very badly? Is it that they want to be so straightforward and politically correct? Or is it that they know no other way to buy? I played a major part in winning an enormous UK government contract and I still persuade myself that I do not want the answer. I am as near as you can get into being in denial as you can without being blatant about it and it makes me feel bad. The process is difficult. In fact, when you get the invitation, the first thing you feel urged to do is throw it in the bin. Why? Because it is so frighteningly 'open' that it discourages one from bidding in case you expose all your benefits to competitor scrutiny. So bad that you fear that following such a track will lead to ultimate demise! You see you have to bite the bullet and bid. Yes, they have processes and yes, they do have disclosure laws but YES, there are ways around this. Governments are complex and very political. they need to be seen to be following processes despite their fear of ridicule, which is why you need to feed them what they need rather than what they want. So bid with impunity. Just provide with integrity. Then you will be OK.

BLOG COMMENT - Buyers and airlines

The Bald airline facts about business travel. 1/ In the main companies will not mandate travel i.e. they will not say ‘you must use this airline’. They will ask you to but very rarely will they mandate it. It is not in global company nature to do so. 2/ It is practically unheard of for corporations to insist (and follow through) on their travellers using their loyalty miles for business purposes. This has a bearing on fact no 1. 3/ If a corporation is told by a national airline that they no longer have a deal then at least half of their travellers will still fly on that airline. 4/ Buyers may bluster and dictate to airlines but they seem unable to do so in their own business. Procurement is very low in the political pecking chain of any corporation. Internally people may endorse procurement tacitly but not authoratively. 5/ Whilst this situation remains it will be very difficult and perhaps foolhardy to direct connect with just one major airline. I wonder how long it will take before somebody calls the buyers bluff.

A Travel Policy’s Biggest Barrier

What is the biggest issue that stands between a policy and its successful delivery? Is it a lack of knowledge or ability in order to create one? Is it uncooperative or unable suppliers or intermediaries? Is it poor uptake or availability of appropriate technology systems? Or is it simply that end users either cannot or will not comply with edicts and have ways of getting around them?

Depending on your own experiences you could say one, some or all of the above but I think you might be missing something even more important. What is this something? It is what I call the three ‘P’s of internal Politics, Procedures and Processes and these have nothing to do with suppliers, intermediaries or individual travellers.

I have seen so many companies invest huge resources and money to create detailed and potentially rewarding travel programmes only to waste much benefit due to the three ‘P’s. Many of them choose not to identify this as the cause as it would not be considered ‘Politically’ correct to do so especially as the issues usually start at board level. A shame really as board level is where any rectifying needs to start.

So what am I actually saying? I believe that internal politics, inflexible procedures and lack of communication processes are the biggest road blocks when it comes to the delivery of a negotiated and delivered travel programme. I am also saying that non compliant travellers are not the biggest villains, it is more likely the messages they are receiving (or in some cases not) from much higher up the business chain of command.

Taking a closer look at any company’s board you can see why problems could occur. Rather like a herd of elephants you have the strong patriarch and around him a chain of command with different interests and abilities. Again, like any herd there is a fair amount of head butting and scheming going on. They all represent different interests from finance to sales, operations to procurement and some hold more sway than others.

Eventually these ‘band of brothers’ agree a policy. But do they really? You can be certain that there will be winners and losers but when it comes to something as emotive as travel they seem less inclined to feed their solidarity down the line. In some areas there can be a visible lack of zeal and that is all it takes to undermine a policy. Particularly when there are so many practical ways of getting around it.

Many companies end up with a policy that has been presented by procurement who are by no means top dog (or elephant!) at the board table, which is not satisfactory to all and then they have to communicate it to a sometimes incredulous work force. This is where we come to the second closely linked ‘P’ of procedures. Who is allowed to say what to whom and what are the ‘P’ for processes for doing it. How much can you or can’t you say about your decisions? How much should you justify them? How much should you mandate them?

Let us say those wise old elephants have at least given tacit support to the policy. Who is going to sponsor it and keep on the agenda as the process develops? Who is going to go to senior directors and ask them to pull their folk into line? How are those messages going to transmit through a company that, possibly, apart from payroll has no appropriate method for these types of communication?

My message to corporations is a simple one. Sort yourself out at the top. Put into place procedures and processes and only then consider the creation of a policy that is going to be committed to and enforced across the whole employee base. This will save you more than any supplier or intermediary will.