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Global Travel Management Services: Cost Saving Opportunities by Technavio
[January 31, 2017]

Global Travel Management Services: Cost Saving Opportunities by Technavio

According to the latest procurement intelligence report from Technavio, the global market for travel management services is expected to grow at a CAGR of 7.3% over the next five years due to the outsourcing of travel management services by several large organizations.

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Technavio has published a new report on the global travel management services market from 2016-2020. ...

Technavio has published a new report on the global travel management services market from 2016-2020. (Graphic: Business Wire)

The research report titled 'Global Travel Management Services: Procurement Intelligence Report 2016-2020' provides an in-depth analysis of category spend, best procurement practices and cost saving opportunities, aimed at helping organizations achieve superior business performance. The report also provides insights on pricing, supplier positioning and top companies, enabling sourcing professionals to improve their competitive advantage through procurement excellence.

"During the forecast period, the travel management services market will be driven by the rapid growth of business activities in emerging markets such as India, China, Malaysia, Indonesia, Mexico, and Brazil," says lead Technavio procurement specialist Angad Singh for category spend intelligence. "In addition, several large organizations are increasingly outsourcing their corporate travel management to TMCs, to achieve cost savings and gain greater visibility on their corporate travel spend," adds Angad.

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Technavio sample reports are free of charge and contain multiple sections of the report including the market size and forecast, drivers, challenges, trends, and more.

Cost saving opportunities in the travel management services market

The adoption of various cost-optimization levers helps buyers of travel management services realize direct cost savings and enhance category management and value benefits (including reduced procurement complexities).

Technavio procurement experts have segmented the cost saving opportunities in the travel management services market into the following value-enhancement opportunities:

  • Adoption of technology
  • Supplier Competition
  • Adoption of negotiation strategies
  • Optimization of procurement practices
  • Bundling of services

Adoption of technology saving aspects

Implementation of technologies such as mobile applications for booking and tracking of travel schedules and promotions, automated expense management, and use of artificial intelligence for predictive analytics, results in efficiency and cost-savings to the extent of 10%.

Corporate travelers attach considerable importance to travel convenience. For instance, they prefer having access to real-time, customized information about their travel schedules. Thus, companies prefer to engage with suppliers that can offer mobile alerts and tracking features that provide corporate travelers with real-time updates.

Optimization of supplier competition saving aspects

The key focus of large organizations with respect to corporate travel services is to reduce spend and eliminate hidden costs associated with bookings and value-added services. For instance, a single platform for booking and tracking travel requirements helps organizations centralize spend and plan travel in a cost-effective manner. Competitive bidding comprising of price discounts and value-additions helps organizations realize cost-savings to the extent of 12%.

Buyers look to engage with suppliers that can customize services in response to travel and hospitality requirements. For instance, suppliers must be able to address changes in the location of business conferences and traveling dates at short notice.

Bundling of services saving aspects

One of the most opportunistic strategic cost saving levers in the global travel management services market is the need for reduction in management complexities. Organizations prefer to engage with TMCs that offer one-stop solutions for all their travel needs.

Some value-added services such as concierge assistance, VIP arrangements, interpreters/translators, virtual payment options, and visa assistance are becoming increasingly popular among corporate travelers. Buyers prefer engaging with suppliers that offer such services and cater to their unique requirements leading to cost-saving to the extent of 10%.

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About Technavio

Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.

Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.

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