Challenge complicate travel procurement

IN MANY organisations,
travel purchasing
typically sits in the
‘indirect procurement’
category; the purchase is
important to the company
but is not always seen
as business critical, says
Chris Pouney, director
of business travel for
Severnside Consulting, a
TMC with offices in London
and Dubai.
“For oil and gas clients,
however, and some other
industries such as mining
and shipping, travel
is absolutely a ‘direc
procurement activity’
and unless it’s managed
effectively, then the
profitability and reputation
of the organisation are
under serious risk.”
The implication, says
Chris, is that travel
suppliers – and in
particular TMCs – are
placed under tremendous
pressure to get it right.
High emphasis is
placed on quality of
staff, availability and
robustness of systems
and processes.
He points to the
complexities of travel
patterns in the sector,
which require an advanced
level of expert travel
management.
“Crews may be on rigs
for month-long rotations,
and when they come off
they need to get home
as quickly as possible.
Oil and gas clients will
have intricate crewrotation
plans set up
months in advance but
needs may change at a
moment’s notice. Airlines
have developed highly
complex products that are
only normally available
to expert TMCs in this
sector.”
Tracking mechanisms are
another priority as staff
safety is paramount. Chris
says TMCs must be able
to locate travellers at any
time of the day or night,
and have robust and
tested plans to support
and evacuate personnel at
short notice.
Further, visas and
work permits are critical
and relationships with
embassies and high
commissions must be
delicately managed.
“When looked at
internationally, we need
suppliers who understand
local market nuances,
such as local fares and
safety, yet operate to
global standards and
can report, sometimes
hourly, in line with global
standards.”
Among the challenges for
corporate clients working
in the oil and gas sector
is a global corporate
directive that restricts oil
and gas travellers from
using European Unionbanned
air carriers, says
Costa Papoutsis, Wings
Travel Management’s
head of business
development: oil and gas
for sub-Saharan Africa.
Many domestic carriers
that travel on routes to
oil and gas sites, often
located off the beaten
track, do not qualify for
EU regulations and are
therefore blacklisted,
creating access issues for
workers.
Costa says traditional
oil and gas travel is
rotational, in line with
28-day work cycles.
A rig worker’s
replacement has to arrive
onsite before that worker
can leave, in back-to-back
fashion.
“In some regions there
is no alternative but to
amend travel policy or
to seek more expensive
alternatives,” he says.
Visa issues
Within the African
region, this critical
travel becomes more
challenging.
 Government visa
departments are slow and
it is expensive to process
work visas. After every
trip, the traveller has to
re-apply and go through a
bureaucratic process that
changes often.
 Long-term visa validity,
such as the ten-year visa
one would get in First
World countries, is not
available.
In some instances, even
when visas are obtained
from national embassies
outside of the home
country, like Tanzania, the
traveller may be forced to
re-purchase an entry visa
on arrival.
Travellers may
experience additional
concerns when having to
visit an ATM to withdraw
local currency for the fees,
while Passport Control
holds the passport.
Often visas, which can
only be applied for 48
hours ahead of travel,
are delayed, resulting
in multiple flight ticket
changes.
These types of
challenges are outside
of normal travel policy,
causing frustration and
added expenses for
travel buyers. That is
why it is essential for
TMCs to understand and
have proven solutions
for crucial travel within
the African continent,
says Costa. “Travel
is project-driven with
cost centres that are
price sensitive. These
budgets are set without
the understanding of air
ticket yield management,
logistical abnormalities
being more the rule than
the norm. Hotels are still
a scarcity in key locations,
driving up the prices due
to their being at maximum
capacity.”
Travel procurement
specialist, Alan Reid, who
is associated with a global
energy business, adds: “It
used to be quite quick to
get an Angolan visa but
the country requires more
and more documentation
all the time.
“A Nigerian visa is
costly. For Tanzania,
leisure travellers do not
need a visa but business
travellers do, and the fee
is applied inconsistently.”
Complex ticketing
Destinations frequented
by travellers in this sector
are often off the normal
business travel network,
says Alan.
 Those in Africa come
with a specific set of
challenges, with flight
issues springing to the
fore. Periodical shortages
of flight frequencies, a
shortage of seats and, as
a result high fares, spring
first to mind.
He illustrates with an
example. “Flights to and
from Luanda on a Friday,
when there are shift
changes of oil and gas
workers, are problematic.
This affects both workers
bound for Johannesburg
and Europe. Flights are
full, so there is little
discounting.”
Air services are often
scheduled at inopportune
times, so that it is difficult
to get a full day’s work in a
destination, necessitating a
stay-over, which escalates
trip costs.
For instance, Alan
says, travellers from
Johannesburg to Windhoek
can take an early flight out
but return flights take place
in the late afternoon and
– taking airport time into
account – this cuts into
the day. Flights to Tanzania
from Johannesburg depart
mid-morning arriving midafternoon,
once again
wasting the better part of
a day.
Alan says it is his
impression that the airlines
are willing to lay on more
flights but these are at the
behest of governments and
bureaucratic negotiations.
Travel to West Africa,
he says, is affected by
ageing and congested
airports with “woeful
infrastructure”.
Trips entail hours getting
through customs and
immigration on arrival and
departure.
On the plus side, says
Alan, is the appearance
of more and improved
hotels in Africa, more
international hotel brands
and better hotel rates.
“It will be interesting to
see what effect these new
brands have on corporate
agreements.”
Credit cards could also
be more widely used, he
suggests.