In another great post on PurchasingBIZconnect, Dave Hannon reveals that NASA recently completed an investigation of some excessive conference expenses made by – be ready to be shocked – their procurement department. The expenses in question involved over $60,000 worth of snacks for 317 procurement employees over a three-day period – an alarming rate of $66 per person per day!
In the post and his comments, Dave correctly points out the inevitable problems that arise when competition is not sought for travel and meeting spend. And that got me thinking about an experience I had recently.
On a business travel engagement, my hotel room was provided for me at no cost. Food, however, was my responsibility.
No big deal, right?
Well, when you want room service, you’re essentially dealing with a sole source situation. And, like most sole source situations, you pay more than a reasonable price for what you get!
In fact, I had a very simple pasta dinner one night at the hotel. This dinner, which would have cost less than $20 in a restaurant, cost nearly as much as a night in the room.
I was so shocked at the cost of the dinner for how modest it was, I had to take a picture of it.
While most larger companies do negotiate room rates with hotels, I would bet more than a few don’t touch food as a line item to be discounted. And therein lies a significant component in the overall cost of travel. Remember, the cost of my pasta dish was nearly equal to the cost of a night in the room!
So, when you negotiate your next accommodations contract, try to negotiate a discount or rebate on room service. Saving 5% or more on room service may be the cherry on top of a successful travel procurement program!
To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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