What is the role of the independent business travel consultant in today’s market, asks Alex Blyth, and when should a travel buyer consider using one?
THERE WAS A TIME when buying business travel was simple. Travelling executives went to a set number of destinations, flew in business class, and stayed in hotels, which charged an upfront, all-inclusive price. The job of a travel buyer and manager was to pick the right suppliers and negotiate a good price with two or three of them. But business travel has changed as the world economy has grown and executives are finding themselves jetting off to far-flung destinations outside of Europe and North America to places such as China, India and South Africa.
A baffling array of new airlines and hotel groups entered the market, and suddenly unbundling services and fares became a trend, with little thought for the corporate travel manager. On top of all these changes, there is now pressure for travel managers to report on the environmental and social impact of their company’s travel. Add to that the global downturn, smaller budgets and tighter deals, and a travel buyers’ job seems to be a growing pain.
The result has been that, increasingly, corporate travel managers are unable to cope, and are bringing in external business travel consultants. Paul Tilstone, chief executive of the Institute of Travel & Meetings (ITM) observes: “We have seen an increasing use of the skilled, knowledgeable consultant. Some look for advice and assistance with specific elements of their travel management; others are totally outsourcing travel management to them.”
Few travel managers will admit that they use these consultants – they like to claim credit for the results themselves – but the practice is quietly becoming more and more widespread. So, what exactly can these consultants do, how useful are they, and how do you pick the right one for your business?
A CONSULTANT’S ROLE
Broadly speaking, there are three types of business travel consultancy: the small specialists like Corporate Travel Partners and Bouda, which are usually owned and run by one or two experienced and senior travel industry experts; the large generalist procurement consultancies such as 4C Associates, which have travel divisions; and the main travel management companies (TMCs),such as HRG, that have independent consultancies attached to them.
Consultants perform a wide range of roles, as Robert Daykin, managing consultant at Corporate Travel Partners, explains. “In 2008 we spent 15 months with the Home Office completely re-engineering its travel programme so it cost 10 per cent less than when we started. We’ve advised BT on its travel policy. We worked with RBS, implementing its travel agency programme in Europe, Asia- Pacific and Australia.”
Cost-cutting is important but as Lesley Turvey, senior partner at 3Sixty Global, explains, today’s travel managers look for more than this from their consultants. “Traditionally, the focus has been cutting spend,” she says.
“However, our remit is widening to incorporate global consolidation, TMC selection, travel policy reviews, process re-engineering projects, corporate cards and interim management.”
Ultimately, a consultancy provides you with skills, expertise or resources that you lack internally. For this you can expect to pay around £450 per day for a junior consultant up to £1,500 per day for those at the top of the profession. Clare Murphy, co-founder and director at Bouda, urges her clients to look beyond the headline cost. “Our pricing is flexible,” she explains. “We can charge a daily fee, project fee or savings share. The focus should always be on return on investment.”
Indeed, most of these consultancies predict that their clients receive five times their investment within the first year of working with them. HRG even guarantees it.
POTENTIAL BENEFITS
It might be tempting to try to plug these gaps in skill, expertise or resource with in-house people.
However, many travel managers find a consultant preferable for several reasons. An external, impartial party can bring much needed perspective to the often highly emotive issue of corporate travel.
Colin Brain, director at Management Solutions says: “Next to motoring, travel is usually the most contentious of administration issues. We believe that using an independent and unbiased consultant takes the internal politics out of the travel debate.” Not only does this add weight to final decisions, but it also makes it more likely you will reach the right decision. Your external consultant can bring fresh eyes and decades of experience to seemingly intractable problems, and often a formal benchmarking process that gives you the objective facts you need to make difficult decisions. In the same way they can help you stay ahead of the technology curve in the fast-moving world of travel.
Furthermore, a consultant can be an invaluable partner in negotiations with suppliers. “It’s a sellers’ market out there,” says Chris Pouney, managing director at Severnside Consulting.
“Hotels and airlines have honed their skills in yield management, and if not managed effectively, costs can increase massively. A good consultant knows ‘where the bodies are buried’ and can advise on how to structure requests for proposals and subsequent negotiations to make the most efficient use of everyone’s time, ultimately saving you money.”
Brain gives some examples of what all this can do to the bottom line: “One corporation wanted to reduce costs by 10 per cent. The company’s spend on travel the year before we were appointed was £11 million, and we reduced spend by £2.25million whilst actual travel increased. At a law firm we introduced an expense management system, which in just the first year enabled it to bill out more than £1 million to clients for their employees’ time.”
GETTING IT RIGHT
Not every relationship between travel consultancy and client works out as well as that. It is essential to select the right consultancy and then to manage the relationship effectively. Some will advise you to stay away from those connected to TMCs, but Paul Dear, director of client consultancy at HRG, is keen to stress the independence of this part of the group. “We are completely independent from our TMC,” he says. “Only around half of our clients are also clients of the TMC, and our consultancy recommendations are not in any way influenced by that side of the business.”
So, what should you look for? While it might seem obvious to look for consultants with experience of your sector, it might not, in fact, be the best approach. Pouney at Severnside Consulting says: “Traditionally, consultants were selected if they had the right experience or right cultural fit, but I’m now seeing companies selecting consultants specifically because they don’t know the corporate’s sector at all. They want consultants to challenge the status quo and bring in ideas from other sectors.”
You do, though, want consultants with experience in producing results.
The best guide to this is references, but qualifications such as the Certified Management Consultant award, from the Institute of Consulting, can also be useful, as can membership of travel organisations such as the Global Business Travel Association (GBTA), ACTE and ITM.
MANAGING RELATIONSHIPS
All too often buyers invest all their time and effort into supplier selection and fail to focus on managing the relationship. Karen McKenna is director at SSSource, a virtual business travel marketplace, which runs courses on how to manage relationships with consultants.
She offers this advice: “Begin with absolute clarity on why you actually need one and what you want from them. Use this to provide a clear brief with specific objectives. Spend time telling them about your business. They need to know all the ins and outs to understand it.”
She continues: “Agree a detailed workplan. Insist on frequent and regular progress reports, including an outline of their methodology, presentation of interim findings and progress, preliminary reports and final report and evaluation. Meet regularly to identify completion dates of phases and tasks. Give clear feedback to the consultant throughout the project.” Get all of that right and your consultant should be able to improve your travel processes, increasing executive productivity and cutting travel costs.
Finally, be prepared to be surprised by what they discover. “A few years ago I was working with United Utilities,” recalls Corporate Travel Partners’ Daykin. “It was a six-week project advising them on their travel policy, but while I was there I noticed a way they could save money, and it ended up saving them £750,000.”
10 BUSINESS TRAVEL CONSULTANTS TO CONSIDER
Severnside Consulting
Key contact: Chris Pouney, MD
Number of staff: Two
Founded: 2010
Location: Midlands, but provides consultancy to corporates in South America, China and the US.
Main clients: Typically large global organisations with a travel spend of $50 million up to $500m.
Services: Programme transformation, policy benchmarking and travel programme ‘supercharging’.
Contact: 01299 488003
www.severnsideconsulting.com
4C Associates
Key contact: Ed Ainsworth, MD
Number of staff: 70 (roughly 10 in travel division)
Founded: 2000
Location: Hammersmith, London
Main clients: Travelex, WorldPay, Cadbury, Mothercare and BG Group.
Services: Advice on how to get more from supplier relationships through cost reduction, outsourced procurement and e-procurement.
Contact: 020 7605 1600
www.4cassociates.com
Management Solutions
Key contact: Colin Brain, director
Number of staff: Two permanent and two part-time
Founded: 1989
Location: UK, with associates in France, the US, Canada and Brazil.
Main clients: EMEA, DFID, the European Bank of Reconstruction and Development, Abbot Group, the Commonwealth Secretariat, BT and more than 100 similar organisations.
Services: Review and research, recommendation and selection, implementation, project management and monitoring, technology and automation processes, and finance and credit.
Contact: 020 8444 7788
www.ms-uk.com
HRG CONSULTANCY
Key contact: Paul Dear, director of client consultancy
Number of staff: 30
Founded: 1996
Location: Global from New York to Brisbane, with the majority of its analysts in London.
Main clients: Oil and gas, pharmaceuticals and finance.
Services: Helping large corporates gain control of their travel procurement, understand what they are spending where, and consolidating it into one, more powerful budget.
Contact: 01252 881000
www.hrgworldwide.com
BUYINGTEAM
Key contact: Chris Gayner, head of marketing
Number of staff: More than 200
Founded: 1994
Location: UK, North America, Benelux, France, Germany, Spain and Switzerland.
Main clients: BG Group, Universal Music, WM Morrison, Siemens, British Council, Adecco, Kingfisher, Manpower, CSM, Man Group Plc, 3i, British Airways, Prudential, BDO, AGCO, and Friends Provident.
Services: Advice on all aspects of procurement, including travel.
Contact: 020 3465 4500
www.buyingteam.com
BOUDA
Key contact: Clare Murphy, director
Number of staff: Six
Founded: 2009
Location: Amersham, Buckinghamshire
Main clients: Corporates across all sectors.
Services: Bouda provides outsourced travel management services. It designs, evaluates, sources and implements intelligent travel strategies, covering travel technology, policy and process; it can also assist corporations in re-energising flagging self-booking programmes.
Contact: 077950 97405 and 07824 362578
www.bouda.co.uk
3Sixty Global
Key contact: Lesley Turvey, senior partner
Number of staff: Five
Founded: 2009
Location: London
Main clients: Oil and petroleum, finance, automotive, pharmaceutical and educational sectors.
Services: CSR programmes, expense management, sourcing management, travel policy, travel programme optimisation and global consolidations.
Contact: 08456 808 360
www.3sixty-global.com
Corporate Travel Partners
Key contact: Robert Daykin, managing consultant
Number of staff: Three
Founded: 2000
Location: UK
Main clients: BT, Sony Ericsson, Lloyds TSB, RBS and Royal & Sun Alliance.
Services: Travel programme optimisation.
Contact: 01403 248 464
www.thectp.co.uk
Sirius Management
Key contact: Tom Stone, MD
Number of staff: One, plus four associates.
Founded: 2003
Location: Surrey
Main clients: From blue-chip multinationals to SMEs.
Services: TMC, airline, hotel and ground-transport sourcing, and programme auditing and consolidation.
Contact: 01932 566 888
www.sirius-ts.com
Advito
Key contact: Kelly Flynn, communications director
Number of staff: 14,000
Founded: 1975
Location: Dallas, Texas
Main clients: Ingersoll Rand, Novo Nordisk and NetJets Europe.
Services: Travel management strategy, sourcing management, travel policy and governance, CSR, plus automation.
Contact: www.advito.com