BSI Urges Public Sector to Consider Bigger Picture
16 July 2010
Responding to reported suggestions* by civil servants on ways to cut public sector travel expenditure BSI is urging public sector organisations to consider the bigger picture and suggests that the comments made by civil servants in the report demonstrate a failing on behalf of their travel agencies to communicate the importance of compliance and duty of care.
BSI’s Head of Business Development Public Sector, Steve Savage, said: “Compliance to a preferred agency or hotel programme is not just about individual rates. If bookers of public sector travel are under this impression then the TMCs in question are failing in their responsibility to communicate its importance.
“We understand that when the spotlight is firmly placed on public sector travel expenditure bookers and travellers tend to wear a procurement hat but this approach does not address the bigger picture.
“Booking direct with hotels or via other non-agency channels not only poses a potential security risk due to difficulty in locating employee in the event of an emergency or disaster, but also dilutes the negotiation leverage agencies exert on the hotel supply chain to deliver sustainable rate savings.”
BSI works with many TMCs at varying levels of integration to ensure that clients receive specialist management of hotel and meetings spend. Regular benchmarking of rates and consideration of the ‘total cost of stay’ – i.e., the cost of travel from offices to and from hotels, breakfast, parking charges and other required extras are taken into account to bring down the overall cost and effectively negotiate future rates and added value. Mr. Savage said: “If you know that 90% of your travellers use Wi-Fi Internet access and 3% use car parks, negotiation priorities are clearly set allowing effective management of policy and negotiated terms post stay, therefore closing the circle of control and management of ‘Total Cost of Stay’. BSI also negotiates with properties outside of an existing preferred programme if better value can be sourced elsewhere”.
According to Mr. Savage, in many cases booking direct with hotels or sourcing Internet rates offer only short-term savings. “A low rate is only a good rate if you can always book at that rate. In most cases, Internet rates have restrictive terms such as pre-payment, zero cancellation policy or multiple night stay requirements. In addition, such leisure rates, and rates booked directly with hotels, pay no commission. Agency commercial models typically rebate all or some of the commission earned – a saving which is not visible to bookers and travellers looking to make micro purchasing decisions.”
Over recent years BSI has demonstrated a key differentiator to the TMC agency world with a strategic approach of sourcing the best available rate from multiple distribution channels unlike GDS-reliant agencies. Savage went on: “Our non-reliance on GDS rate channels means that the client’s negotiated rate becomes the maximum rate the client is likely to pay with alternative rate channel interrogation delivering enhanced savings where available”.
Ultimately, BSI is not just about making hotel bookings. Other savings that are not visible to bookers and travellers are linked to the process efficiencies delivered to public sector organisations through the outsourcing of payment settlement processing.
“Individual expenses claims, credit card reconciliations and invoice processing place a significant financial and administrative burden on public sector organisations. Outsourcing these services to an agency like BSI delivers far greater savings than can be achieved by surfing the net for a one-off £5 rate saving.”
Mr Savage concluded: “By using BSI’s bill back service, organisations benefit on two fronts. Firstly, heightened visibility and control of spend and, secondly, process cost efficiencies associated with a single consolidated payment for multiple transactions compared with processing many individual transactions as a result of a direct booking policy.
*Source: www.publicsectortravel.org.uk, article by Mark Frary, published 9/7/10 - ‘Civil servants urge public sector to shun TMCs and source travel directly’