During the process of building a travel management platform, many corporate travel management leaders often face a crucial question: How to construct the travel supply chain?

The construction of a corporate travel supply chain is a complex engineering system, involving multiple aspects, including but not limited to supplier selection and management, technology platform setup, process design, and risk management.

Today, we will focus on supplier selection, providing comprehensive answers for corporate travel managers regarding the major travel expenses—air tickets and hotel bookings.

Travel resource backgrounds are complex, determining the complexity of the travel supply chain.

In addition to our official website and flagship stores, we have a diverse range of sales channels for flights and hotels, including OTA platforms, B2B distributors, block booking agents, TMCs, agents, and travel agencies. This means that businesses have multiple options when building their travel supply chain, but it also comes with plenty of "traps" to navigate.

Channels may perform "addition and subtraction" on the base prices provided by airlines and hotels based on their own business models and market strategies, leading to the varied prices we see across different platforms. We often observe: On the same platform, the price of a flight can increase by 5 minutes; four people searching for the same hotel can see four different prices; consumer-end prices may be cheap, but business-end prices can be shockingly high; the flight price seen is 563 yuan, but when booking, it increases by 34 yuan, which turns out to be an added insurance cost...

In this scenario, companies seeking resource solutions should not rely solely on a single platform but should consider all available booking channels, including direct collaborations with hotels and airlines, and through diverse booking strategies like B2B distributors and flagship stores. They also need the ability to identify and leverage these price fluctuations.

Therefore, the complex background of the business travel industry necessitates a robust resource integration capability for the travel supply chain. Companies must consider these channels comprehensively to ensure both employee travel needs are met and costs are controlled.

How Large Enterprises Can Build a Travel and Expense Supply Chain?

1. Airline tickets

Option 1: Sign agreements to enhance resource utilization under the agreements

The company has entered into a large customer agreement with airlines, allowing them to enjoy preferential prices over other channels, with discounts ranging from 3% to several dozen percentage points, particularly evident in舱位over 60%. On average, each ticket offers savings of 29 to 59 yuan (the exact amount varies according to the agreement policy). Additionally, the ticket prices typically include value-added services such as express check-in, free ticket changes and cancellations, airport transfers, additional baggage allowance, and lounge access.

By optimizing the platform's flight sorting and booking control measures, companies can increase the usage of their agreements, thereby negotiating more favorable prices and flexible booking conditions with airlines. Essentially, when used effectively, airline agreements can become increasingly cost-effective.

"Employees traveling in economy class often constitute a larger portion of most companies. However, airlines typically offer different promotions for business and first class, with business class potentially receiving higher discounts compared to economy. Companies can analyze their travel data to allocate promotions wisely. If they find that business class usage is low, they may consider transferring some business class promotions to economy, which not only better serves the majority of employees but also enhances resource utilization efficiency."

This is what our large customer operations can do for businesses. They can assist in deeply analyzing travel data, optimizing policy allocations, ensuring every dollar invested yields substantial returns. With the professional support of large customer operations, companies can devise travel supply chain solutions that meet employee needs and are cost-effective.

Option 2: Prioritize the use of the agreement while reasonably utilizing third-party resources as a supplement.

Under maximum assurance of the use of corporate contract prices, companies can also integrate third-party resources such as airline websites, flagship stores, and TMCs to enrich their travel supply chain, serving as a supplement to the large customer contract.

For instance, certain companies permit employees to purchase tickets from the official flagship store only when the price difference between the official website and the third-party agreement exceeds 29 yuan. This not only ensures the priority of the agreed-upon prices but also aids the company in negotiating better terms and maximizing the value of the airline's cooperation.

Option 3: Select the appropriate service provider based on specific scenario requirements.

Corporate clients, when arranging travel for large events like conferences or annual meetings, often need to ensure sufficient flight seats and suitable cabin classes. It is crucial to confirm in advance whether the service provider can offer the required resources, including real-time seat availability and access to discounted fares. For group travel of 10 or more, it is recommended to communicate with the service provider, as this is usually more cost-effective than individual bookings.

Some businesses may find that the price on their itinerary is lower than the actual amount paid for their flight tickets. This is usually due to additional fees, such as mandatory insurance, being included in the ticket price by online platforms but not displayed on the itinerary. To prevent compliance issues during reimbursement, it is recommended that companies inquire about the composition of the consultation fees in detail before booking, to ensure transparency.

Hotel

Step 1: Based on the differential standard and accommodation requirements, enter into an agreement with a hotel group for a discounted rate.

Meeting corporate travel needs hinges on identifying hotels that align with employees' travel standards, are located in cities they frequently visit, and offer moderate prices with sufficient coverage.

Large hotel groups are often the ideal choice for such needs. According to data from Hotel Observer Network, the chain rate is expected to reach around 50% by 2025. Currently, the average market share of the top groups in the chain hotels has already exceeded 60%.

By establishing a national group agreement with hotel chains, the company not only benefits from the discounted rates offered by the agreement, but also gains additional value-added services at the same price. Particularly in first-tier and sub-provincial cities, as well as provincial capitals, where the rate of hotel chains is high at 49.58% and 40.81% respectively, hotels booked through the group agreement may meet over 50% of accommodation needs.

Travel policies vary across different industries; for instance, manufacturing companies may have strict accommodation budgets, making high-end hotels unsuitable for their needs. Businesses should choose hotel brands that align with their travel standards, and hotel groups offer a wide range of brands across different price points, providing flexible options.

Step 2: Enter into agreements with individual hotels in residents' cities to meet the unmet demand for high occupancy but underserved accommodations.

In cities with frequent business travel, companies can establish partnerships with individual hotels that meet their travel policy standards, sign agreements for negotiated rates, thereby avoiding the inconvenience of employees being unable to find accommodations.

Step 3: Establish partnerships with third-party aggregation platforms to supplement the remaining un-covered hotel resources.

For hotels with low occupancy rates and scattered accommodations, businesses can establish partnerships with third-party aggregation platforms, such as the CPS Corporate Consumption Supply Chain Platform. These platforms, by integrating resources from various hotels, distributors, and room block agents, ensure comprehensive service and product coverage, addressing the resource needs for hotels not yet covered in bookings.

"To excel in the supply chain, it's about meeting the demands of the majority of travelers, which is the foundation of building a robust supply chain. This involves focusing on the needs of frequent travelers, those on regular flight routes, and residents of permanent cities, while also providing refined service optimizations for mid-to-high-end customers with ongoing service demands. Thirdly, it's about identifying and supplementing the resources that have yet to be met, thereby enhancing the coverage and service quality of the entire supply chain. In this way, both the company and its employees are satisfied. Effective supply chain optimization should be balanced."

III. The Journey of Travel and Supply Chain Construction for a Certain Agri-Food Group

The Group is a private enterprise conglomerate primarily engaged in modern agriculture, animal husbandry, and the food industry, with an annual travel expenditure of up to 140 million. The travel management model includes OTA, airline three-party agreements, and self-signed hotel bookings. Service response times are slow, allowing only online ticket reservations, while other services must be completed offline. Each subsidiary of the group has its own self-signed hotel agreements, making maintenance difficult. The service provider's system fails to offer multi-supplier price comparisons, rendering it ineffective in reducing the group's travel costs and failing to meet the company's informationization development requirements.

In response to the group's call to "tighten our belts," the administrative office and digital technology department have collaborated to build a group travel platform, integrating and managing travel supply chain resources. The platform directly connects with airlines and hotel groups and can freely interface with various types of corporate travel supplier resources to facilitate comparative procurement, achieving cost savings of approximately 5 million in reservations.

Flight Services: ①Signed large customer agreements with over 20 airlines, including Air China and Eastern Airlines, to meet the travel needs of most employees; ②Supplemented TMC distribution prices and airline official website prices, enabling the launch of airline flagship stores and special deals, with an 11% increase in full-day low-price coverage and the same flight coverage, a 10% decrease in full-day high-price flights, and a 33% flat commission rate; ③Applied for specific discounts on key routes and expanded channel collaboration models, achieving a cost reduction of 2 million yuan in flight bookings.

Hotel: ①Signed agreements with 14 hotel groups, exceeding 19,000 locations, meeting the majority of staff accommodation needs; ②Through business travel data analysis, prioritized the signing of the top 200 independent hotels for consumption, achieving ultra-low discounts; ③Connected with the aggregation platform CPS, supplementing with 600,000 hotel resources, achieving a 3 million yuan reduction in hotel booking costs.