Continous sourcing, a new concept to improve negotiation strategy

Although only 11% of travel managers globally have implemented it, continuous sourcing is a new approach to sourcing that has already proven successful in generating savings and flexibility in the travel program. This is according to a survey conducted by ACTE Global, in collaboration with HRS.

The study, called ‘A new horizon in hotel sourcing’, includes the opinions of travel managers from companies with small (up to $5 million per year, 32% of the total), medium ($10 million/14%) and large (over $10 million/44%) programs.Most of the travel managers surveyed handle sourcing in-house, although a significant portion use consultants. Only about one-third are very satisfied with their current negotiation approach, while most say they are only moderately satisfied.Among the issues that travel managers are most concerned about are fragmentation, price increases and the lack of a competitive advantage;or the lack of transparency of data, as well as the amount of time and labor involved in the procurement process.

To get the most out of their travel programs, a small but growing number of travel managers have completely turned their methods around to embrace the so-called "travel management system";‘continuous sourcing’, whereby the rates and needs of the hotel program are audited throughout the year, not just once a year.

Early adopters say it has given them financial savings, increased program flexibilityand improvedtraveler satisfaction. Some say it reduces theworkload by spreading the process over the entire year.

Currently, only 11% of travel managers have implemented ‘continuous sourcing’. The percentage is higher in North and South America (17%), while the EMEA region barely reaches 7%.Travel managers cite expected cost reductions (65%), improved traveler satisfaction (57%) and increased program flexibility (43%) as the main reasons for considering continuous sourcing.

Many of those who have implemented this methodology confirm the benefits. Six out of ten managers (64%) report increased traveler satisfaction, and half have seen more savings (52%), as well as flexibility in addressing traveler requests (52%). In addition, four in ten (44%) saw increased employee compliance.

One of the main barriers to adoption of continuous sourcing is training: 42% of travel executives who have not implemented it are unaware of how it works. Nearly one-third (31%) cite lack of time or resources.

All travel executives who have not implemented it do not know how it works.