BSI urges public sector to consider bigger picture
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Responding to reported suggestions* by civil servants on ways to cut public sector travel spend, including booking direct, agency BSI is urging public sector organisations to consider the bigger picture.
The agency 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, says: “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 (travel management companies) in question are failing in their responsibility to communicate its importance.”
Savage adds it is understandable that “when the spotlight is 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 an 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.”
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 other factors, BSI says, need to be taken into account to bring down the overall cost.
Savage says: “If you know that 90 per cent of your travellers use Wi-Fi internet access and three per cent use car parks, negotiation priorities are clear”.
He adds that in many cases booking direct offers 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.”
Leisure rates, and rates booked directly with hotels, says BSI, tend not to pay commission, and with agency commercial models typically rebating all or some of the commission earned - there could be a further a saving which is not visible to bookers and travellers looking to make micro purchasing decisions.
Other savings in the agency process include efficiencies obtained 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,” says Savage.
“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.”
16 July 10
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