I was remiss the other day in alerting you to the fact that we were once again quoted in the USA Today. (Link here.) The article focused on group travel awards and whether they will come back after the last couple of years of pressure from the government on “boondoggles” and some of the negative press around companies spending money on rewards program when they were taking government bailout funds.
I think they will – with changes.
After the conversation with the reporter I thought it might be a good idea to put together some info on group travel. Specifically the way in which is it sold/purchased.
It's Not Easy
If you’ve never run a group travel program before – be warned – they can be complicated to buy and it is tough to understand the various pricing structures. Travel is probably the hardest “award” to buy and the hardest award to fulfill.
Fulfilling a travel award is tough because the buyer has to rely on a huge number of suppliers – from hotels, to DMCs (destination management companies), individual activity providers, caterers, airlines, transportation companies, and any other potential provider that might be connected to getting your award earners from point A to point B and back. So many moving parts relying on humans make for one messy package. Trust me – until you’re across the table from someone who doesn’t speak English in a foreign country trying to negotiate an Executive VIP pick up at private airport for the CEO of the company that pays you $5,000,000 for a group travel program you don’t know what stress is like.
Travel Awards Pricing
If you think about all the people needed to put together a group travel program you can just image the billing and purchasing nightmare that accompanies it. That is one of the main reasons you need an agency to coordinate and connect with vetted suppliers and quality people. I don’t recommend you try to run a group trip (especially in a foreign country) without help from a professional. Some locations such as Vegas are pretty wired for groups so you may not need an agency to manage it but trust me – there are so many ways to make a buck in the travel biz it’s worth it to get someone you trust and who knows the industry to work on your behalf.
That said – it is also my responsibility as a voice of transparency to alert you to the fact that there are a lot of agencies that are less than ethical – or at least playing fast and loose about working in your interest versus theirs.
Group Pricing/Purchasing Options
I created a PDF document you can download (for free of course) that summarizes the four most common ways group travel is priced/bought and the pros/cons associated with it. This is by no means exhaustive – simply a good overview of the major ways most agencies will quote a trip for you the buyer.
In the document I highlight per person pricing, cost plus, management fee and the dreaded “combo.” If I can say one thing – don’t go with the combo. There are so many ways to hid margin and push around numbers in that format you’ll never figure out what your really paying for a program.
Some offer the best in transparency – some the worst. Some are more manageable – some less. Some make it real easy on the buyer – some make the buyer do a lot of work. There isn’t a perfect method of buying travel.
My recommendation is Management Fee – with a healthy dose of client oversight and a good performance agreement. That’s the way to get the best price and the best outcome IMHO.
Value Is Difficult to Assess – Trust is Critical
But understand – without some idea of what’s going on there are a multitude of ways to get you to pay more than you should. Travel is a service business – and service businesses are notoriously hard to pin down on “value.” You can look up TVs on the internet and get a good idea of a price – but trusting your top performers to a destination management company is much harder to quantify.
My recommendation – Find an agency you trust. Check with their clients. Not just the ones they give you (we all know that references are skewed.) Check their web site and see who else they may have operated a trip with and call them direct. Ask for the travel purchasing person – or the VP of Sales/Marketing (those folks typically are responsible for group travel programs for sales people or important customers.)
Remember – the agency should work for you and you should pay them fairly. That’s just good business and that’s just good human behavior.
Check out the document and hit me in the comments if you think I’ve missed something.