UK TMC pricing guidance

BRITAIN’S Business Travel Association (BTA) has issued a new document providing guidance on how Travel Management Companies (TMCs) should be remunerated by their clients.

Developed after a consultation period with TMCs and corporates late last year, the guidance builds on a white paper outlining the pros and cons of different models and calling for greater clarity and transparency from the industry.

The document provides insights for customers into the difference between transaction fee, subscription fee and management fee models, outlining key considerations and baseline parameters to help define commercial relationships going forward.

“We hope it will become a vital reference document, not just during contractual negotiations, but one which helps to ensure continuous quality on a daily basis,” said BTA CEO Clive Wratten.

The industry devastation wrought by COVID-19 had been a catalyst for the project, with the industry recognising that outdated models needed change.

The document compares the various industry pricing models with mobile phone agreements - such as a Transaction Fee model equating to a “pay as you go” phone contract.

By contrast a Subscription Fee model is to be thought of as like a monthly phone contract with prescribed limits on call minutes, texts and data.

Finally a Management Fee TMC pricing model is compared to an enterprise mobile phone contract where an organisation buys plans and phones for all its staff.

The guidance aims to help determine which model is best suited to particular customer types, with Wratten saying the new standards are “designed to be a benchmark that can be adopted across the business travel ecosystem, and provide consistency and best practice for all stakeholders”.

View the doc at thebta.org.uk.