The AOP Category Cost Drivers Series is a new content offering created in partnership with ProcurementIQ.
Today we will uncover the primary cost drivers impacting travel risk management services.
The top cost driver of travel risk management services is wages. While service prices fell from 2018-2021 due to the rapid decline in demand for business travel, the complexity of the work has increased in response to pandemic-driven travel conditions.
Although business travel was not expected to significantly increase until the fall of 2021, the most recent data available via Procurement IQ suggests that the recovery is ahead of schedule. Over half of all business travelers had already taken their first post-pandemic multi-day business trip by August 2021. As noted in their category report, “Even as hybrid work models become increasingly common, business travel, and thus travel risk management services, will not be rendered obsolete.”
How to Use this Information
Business travel is expected to increase at a sharp rate between now and 2024, even with the elevated risk. As a result, the cost of travel risk management services (especially with any specialized requirements) is expected to increase as well. Procurement is encouraged to sign long term (3-5 year) contracts now, locking into today’s lower rates and holding them for as long a term as the provider will agree to.
We have partnered with ProcurementIQ to dig into their treasure trove category intelligence reports, with new insights every Friday. To dig deeper into travel risk management services, and over 1,000 other indirect spend categories, visit procurementiq.com.