Consolidating Travel to Leverage Negotiating Power
Challenge In 2014, three subsidiaries of a parent company were each self-reliant when it came to managing travel. Their independence was necessary in most areas of their businesses; however, managing different travel programs limited their negotiating power with suppliers and vendors. Additionally, they had very little visibility into each other’s travel spend—resulting in lost opportunities to improve cost savings.
Under the guidance of their parent company, they made the wise decision to consolidate their travel into a unified travel program. This significant change consisted of a few goals, including: reducing travel program fragmentation, streamlining policies, and increasing spending visibility with data. Because of value and expertise, American Express Global Business Travel (GBT) was selected to tackle the consolidation.
Solution We immediately got to work and created a strategic project plan with our tenured implementation leaders to consolidate the three travel programs, starting with the US. We then moved on to Canada, and then their Mexico business.
Next, we completed a policy assessment for each company and developed a scorecard that featured both financial and compliance metrics. The three companies are now able to see travel policy-related information at the overarching level, along with the ability to make adjustments at the company level based on their customized compliance requirements. We then put together all three companies’ fragmented hotel programs under one consolidated umbrella.
“It was a great idea on their part. Combining volume gave the companies leverage to build buying power, and in turn, secure lower hotel rates,” said Alexandra, American Express GBT’s Client Manager on the account. “Our group of hotel consultants simply brought a strategic and targeted approach to an area of their business that was otherwise never centrally managed.”
Finally, we developed reporting capabilities that created visibility both at the individual company and overarching level. This methodology allowed the companies to capture segmented data, but with the ability to consolidate, if needed, on the same platform.
Creating better understanding All of these changes required significant training and education for the three companies and their travelers. Training was provided to all three companies together to demonstrate the consolidation and how the travel program would function collectively.
“Educating travelers on the purpose of the consolidation was strategically designed to influence adoption and address change management, “said Alexandra. “We knew each company had somewhat different travel program objectives based on their business so we also provided individual company training. Meeting business objectives while maintaining traveler satisfaction meant it was critical for us to manage the travel program from the bottom up as well as from the top down.”
Results Consolidating into one travel program made not only all three of the companies happy, but their travelers too.
Secured spend savings of 18%¹ in one year driven in part by PREFERRED EXTRAS.
Increased negotiating power by consolidating travel programs, reflecting a 5x¹ increase in individual travel spend
Reached 88%¹ traveler satisfaction, exceeding the first year target.