"Why is preparing a travel agency RFP so important?

In the LinkedIn group 'Procurement Executives - Best in class,' I started a survey titled 'Are You and your company happy with your current Business Travel Agency?'

The options are 'absolutely,' 'so so,' or 'considering to change agency.'

The survey is still running for a few more days, and already today, the results are

interesting, if not staggering: Only 25% are 'absolutely' satisfied with their

business travel agency!

Even 'so so' is not a meaningful situation, meaning 75% are considering changing their business travel agency.

Therefore, I thought it's time to outline some principles regarding the 'Business Travel Agency tender.'

The most important statement: Yes, all companies with, let's say, more than €50,000 in annual travel expenses need a business travel agency!

The effort described below must be made by companies with total travel costs in excess of €250,000 to €500,000 per year. Below that, they can sometimes rely on recommendations from colleagues or others.

I have seen companies of all sizes fail in my projects when they tried to do

without the expertise and specialized technology of business travel agencies.

Most often, it starts with a 'top-down' approach.

A CEO or similar comes up with the idea: 'We already book our vacation trips

online by ourselves. It must be possible for business trips too, and we can

save the costs.'

As costs, they often consider the transaction fees, for example, for a train

journey, which can become apparent when these fees make up 20-30% of the value of the train ticket.

If you want to know more about what makes a travel agency valuable, I recommend my articles (all available under my name on LinkedIn), such as 'What has changed in the travel agency business, do we still need business travel agencies?' or ' otherwise I would repeat myself here.

So, we are convinced that we need the business travel agency, not a 'so so'

version, but the best available in the market for your company.

The next step is selecting the participants, and you should take the time to get a

broad overview.

Now, it becomes classic procurement. The first overview can be gained through an RFI - Request for Information, based on which you can decide who should participate in the actual tender (RFP) or you invite a large group for the RFP.

This can include up to 10 different companies, ranging from large chains to 'Online First' agencies to independently owned travel agencies, which - at least in the German-speaking region - are all part of franchise or partnership systems and can, therefore, offer state-of-the-art technology and global consolidation.

In any case, if your company has travel costs of €500,000 or more, you need a

position in the company that is strategically familiar with business travel

management - here is a reference to my article 'What is the difference between

STM and OTM.'

I refer to this position as 'STM' - Strategic Travel Management.

Because when you address a large group of providers with an RFI or only an RFP, you need intimate knowledge of business travel management and the specific needs of your company!

Once again, I will not present all the individual points of an RFP document here -

interesting templates are available, for example, from the VDR - German Travel

Management Association.

My RFPs usually consist of about 60 questions that are coordinated with the

various departments in the client's company.

In addition to the procurement department, this includes the finance department,

HR, IT, corporate security, sustainability officer, executive assistant, and

frequent travelers.

The process is known from a procurement perspective and is similar to other

tenders.

For the evaluation, you again need the knowledge of the STM position and a

coordinated scoring system.

My clear advice is to weight approximately 80% on quality and 20% on price.

Keep in mind that the 'costs' of the travel agency will not account for more than

4-6% of your total travel expenses, but they will have a significant impact on

all travel and travel-related processes.

As is usually the case in procurement, you will narrow down from 10 to three

'finalists' and then have a 'Beauty Contest' for which all areas of your

company that have been involved in the RFP should take the time to participate.

Above all, you should also get to know the potential account management and

'Head of Operations' in these - always personal - meetings, as they will be the

ones taking care of you later!

If your company currently does not have an STM position, I am more than willing to offer my services.

I accompany about 3-5 tenders per year and, as a result of the process, have

often initiated, trained, and introduced positions ranging from part-time 'STM'

to full-time 'Travel Managers.'

This is my last article for now, as a necessary procedure on my right hand will

prevent me from writing fluently for several weeks.

My mind and the knowledge that I gladly share will remain unaffected. ??"

#RFPTMC #RFITMC #WhyTMC #Tender