Analysis by Patrick Tytgadt: in the traditional model the bid disputes the transaction fee, about 1% of the cost. The 99% inside the trip price never enters the bid.
By Patrick Tytgadt, founder and CEO of Loupit
Every company that travels has the same scene: every two or three years, procurement opens a bid, receives proposals from corporate travel agencies, compares transaction fees and picks the lowest one. The contract is signed, the process is considered efficient, and the topic goes back in the drawer.
The problem is that this competition covers roughly 1% of the cost of a trip. That is what the fee is: a small fraction of the total. The other 99% sits in the airfare, the hotel, the car rental and the bus ticket — and those 99% never enter the bid.
What a bid really is
A bid is the moment when real competition for a purchase exists. In the traditional corporate travel model, that moment happens once per contract cycle. After it, every trip is bought through a single channel, with no comparison and usually no record of what was available at that instant.
But travel prices are not annual. They change every day, sometimes several times a day. Dates, availability, fare class, baggage rules and change policies move the final cost far more than any discount on the service fee.
In other words: the company negotiates precisely what barely matters and accepts without discussion what actually defines the spend.
Where the money leaks
With a single channel and no comparison, the same effects always show up:
- out-of-policy bookings made directly on the airline website;
- personal cards used first and reimbursed later, with no prior control;
- loss of visibility over real spend per cost center;
- no way to prove savings, because no comparison was recorded.
None of this is the agency's fault. It is process design.
The bid that forms in every search
The alternative is simple to describe and requires technology to work: every travel search generates its own bid.
In a corporate travel marketplace, approved corporate travel agencies compete for the same trip at the same time. The buyer sees the final price including fee, fare rules, baggage, change policy and availability side by side. The company travel policy filters what can be displayed and approved. And the whole comparison is recorded.
Four steps form that bid:
- Request — traveler or manager submits route, dates and cost center.
- Competition — approved agencies respond with final price and rules.
- Comparison — options appear together, with policy applied.
- Record — the choice and the alternatives are stored for audit.
What changes for procurement
Procurement stops buying a fee and starts buying trips. Negotiation still exists, but it happens every day, in every quote, instead of every two years in a meeting room.
In practice that means three concrete gains: 100% of the cost compared on every purchase, provable savings backed by recorded evidence, and policy compliance without blocking the traveler.
This is the point I have been making in the travel tech market for years: the gain is not in squeezing the fee harder. It is in putting competition back where the money actually is.
FAQ
What is a corporate travel bid?
It is the competitive process that defines who sells travel to the company. Traditionally it happens every two or three years and disputes the transaction fee; in a marketplace it forms in every quote and disputes the final trip price.
Does negotiating the fee no longer make sense?
It still does, but it accounts for about 1% of the cost. Ignoring the remaining 99% is the mistake.
Do we have to replace our agency?
No. Current agencies can be approved and take part in the competition. What changes is having comparison and a record on every purchase.
How do we prove savings to the board?
With the recorded comparison of each quote: chosen option, available alternatives, rules and final price at the moment of purchase.
