Industry Research

How To Play In The Sandbox Of Managed Travel

Posted on July 16, 2014 by - Also by this author

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Business travel procurement experts Craig Banikowski gave attendees at the International LCT Show a point-by-point primer on how to prepare for the RFP process for chauffeured transportation services.
Business travel procurement experts Craig Banikowski gave attendees at the International LCT Show a point-by-point primer on how to prepare for the RFP process for chauffeured transportation services.

LAS VEGAS, Nev. — Landing a big service contract with a corporation takes more work than ever before, as the RFP process involves more details and rules, according to a panel at the International LCT Show in February.

Chauffeured transportation operators of all sizes must take the time to know and follow the protocols of the companies they seek to supply, the panelists told attendees.

The Business Travel Manager’s Super Panel, held Feb. 17, provided the latest information on the corporate request-for-proposal (RFP) process among companies and organizations that procure bulk business travel services. For limousine operators, such contracts can net steady revenues for years to come if handled correctly. The presentation gave operators insights from executives who make multi-million dollar purchasing decisions.

The panel brought together two procurement experts on business travel who have extensive experience dealing with chauffeured transportation services, and moderator Scott Solombrino, Dav El CEO-turned-BostonCoach CEO. All three are also closely tied to the Global Business Travel Association:

  • Craig Banikowski, head of global travel and procurement in Amgen who previously ran procurement programs for Hilton and Janus Hedge Fund of Colorado. His career spans many travel services for major corporate companies, outsourcing services,  travel expense management, consulting, planning, team leadership, project management, procurement purchasing, expense control and vendor communication. He also is the former past President and CEO of the GBTA.
  • Kevin Maguire, former President and CEO of GBTA, is the director of travel of inter-collegiate athletics for the University of Texas at Austin, which made $180 million net to the university.
  • Moderator Scott Solombrino, President of the GBTA’s Allied Leadership Council, a GBTA board director and board director of the National Limousine Association. The GBTA is the largest business travel association in the world, representing 7,000 members across six continents. It advocates on behalf of vendors and suppliers that serve tens of millions of people who get on planes for business.

Process Heavy: How, Not Why
One of the biggest challenges for chauffeured transportation operators is how to master the RFP process in the big league of major corporations and organizations that expect extensive documentation when evaluating bids from vendors. Procurement officers prefer specifics, Banikowski said. “RFPs are here to stay. We are required at Amgen to get specific forms completed, making sure every piece of business is monitored and managed.”

Vendors should try to be as succinct, cogent and clear as possible in RFPs, and avoid any vagueness. “How do they meet the needs in terms of insurance, maintenance, driver qualifications, and drug testing?” Banikowski asked. Instead of submitting an essay on “why you are the best supplier,” vendors should stick to answering specifics, he said.

When his company reviews bids and RFPs, the process extends beyond just travel service. It also looks at audit, compliance, legal, safety and security. “We are entrusting some of our most expensive individuals to your car service,” Banikowski said. “It’s critical that insurance programs meet the needs of the organization. Litigation is expensive to our bottom line.”

Drug testing and documentation is a key requirement of a RFP, given that it only takes one incident to cause major liability issues and internal questioning of the contract. Under no circumstances can CEOs be put into vehicles driven by chauffeurs who have taken drugs, Banikowski said. “There is a lot of rigor in what we do. You have to make sure it’s accountable. Let us know what your processes are and that they are understandable. Client companies need to be comfortable with a prospective vendor’s processes, and how they are underwritten and audited.”

Priorities
Despite the need for quality ground transportation, the service is not as high a priority in travel procurement because it ranks below airlines and hotels in spending, Banikowski said. “When you look at the biggest components such as meetings and events, hotel and airlines, there are only so many hours in so many days to get bids done and manage a category, especially when you have three major ones for companies trying to expand globally. The amount of work expands.”

Sports and athletic-related travel procurement officers, likewise, see chauffeured transportation as important but not as big of a “silo” as other travel services, Maguire said. But, “colleges and pro-sports are recognizing chauffeured car as a better solution than rental and private cars. If you are a major university and recruiting someone, do you want to show up in a rental car or a chauffeured car?” That can factor into recruits’ decisions, since a chauffeured car presents a better image, he added.

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