CHOOS­ING A TMC

Ar­rang­ing busi­ness travel can be ex­tremely time- con­sum­ing – not to men­tion stress­ful if plans go awry. A travel man­age­ment com­pany can help to ease the bur­den, but at a price. So does it make sense to use one and what should you be look­ing for?

Business Traveller - - CONTENTS - ROBGILL

Your guide to the spe­cial­ist help avail­able for ar­rang­ing travel

How much time have you spent book­ing or re­ar­rang­ing busi­ness trips over the last year? Have your travel plans been se­verely dis­rupted by bad weather, nat­u­ral dis­as­ters, in­dus­trial dis­putes or even acts of ter­ror­ism?

Th­ese are ques­tions that travel man­age­ment com­pa­nies (TMCs) ask when try­ing to per­suade the busi­ness traveller to use them to man­age their travel re­quire­ments.

A decade ago, TMCs used to be known as busi­ness travel agen­cies. Th­ese days, TMC ser­vices ex­tend into ar­eas such as data re­port­ing and anal­y­sis, ex­pense man­age­ment, con­sul­tancy, meet­ings and events man­age­ment, traveller track­ing (al­low­ing com­pa­nies to mon­i­tor where em­ploy­ees are) and cre­at­ing be­spoke tech­nol­ogy such as on­line book­ing tools.

De­spite this di­ver­si­fi­ca­tion of ser­vices in re­cent years, ar­rang­ing and book­ing travel is the bulk of what a TMC does.

WHY USE A TMC?

Ian Lawren­son, direc­tor of sales, Europe, for Hogg Robin­son Group (HRG), says there are four main rea­sons for us­ing a TMC: meet­ing duty-of-care obli­ga­tions to em­ploy­ees when they are trav­el­ling; pro­vid­ing ex­pert ser­vice sup­port, such as 24/7 helplines, to get clients out of “dif­fi­cult sit­u­a­tions”; giv­ing ac­cess to com­pet­i­tive air­fares and ho­tel rates that the in­de­pen­dent traveller can’t book; and al­low­ing vis­i­bil­ity and con­trol over how much or­gan­i­sa­tions spend on travel.

Lyn­d­sey Atkins, mar­ket­ing direc­tor for Reed & Mackay, adds: “Busi­ness trav­ellers are of­ten time poor. A TMC brings value by pro­vid­ing both cost sav­ings and an in­creased level of com­fort and ease, al­low­ing the traveller to fo­cus on work or get some rest.

“Whether this comes in the form of the right seat on the plane, travel alerts or emer­gency as­sis­tance out of work­ing hours, know­ing that you have an ex­pe­ri­enced in­di­vid­ual ready to help you makes a big dif­fer­ence to our trav­ellers.”

Adrian Parkes, chief ex­ec­u­tive of the GTMC, which rep­re­sents most of the ma­jor TMCs in the UK, says: “There are a num­ber of ex­ter­nal fac­tors that can all too of­ten change travel plans and re­quire close man­age­ment. Po­lit­i­cal un­rest, ter­ror threats and ex­treme weather can de­mand that new flights are booked and pro­grammes re­or­gan­ised.

“Man­ag­ing itin­er­ary changes and dis­rup­tion are a key spe­cial­ism for TMCs, en­sur­ing that em­ploy­ees are able to fo­cus on the task at hand rather than spend­ing time re­search­ing new flights.”

If you’re con­sid­er­ing us­ing a TMC, the most im­me­di­ate ques­tions might be: how much is it go­ing to cost, and how am I go­ing to be charged?

Th­ese days, most TMCs – whether they are large or small – use trans­ac­tions fees as a way of charg­ing for their ser­vices, which are a set of fixed rates added to ev­ery travel book­ing at the time of the trans­ac­tion.

A rule of thumb is that th­ese trans­ac­tion fees will be be­tween two and five per cent of an or­gan­i­sa­tion’s to­tal spend­ing on travel, but this de­pends on the level of ser­vice agreed with the TMC.

Gen­er­ally, if you are book­ing the ma­jor­ity of your travel through a TMC’s au­to­mated on­line book­ing tool, the costs will be at the lower end of this scale. But if you pre­fer to make your book­ings by speak­ing to the TMC’s con­sul­tants, known as off­line book­ings, then the fees will come in at a higher level. It’s also worth not­ing that the trans­ac­tion fee can vary de­pend­ing on whether it is an air, rail or ho­tel book­ing.

SPEND­ING TO SAVE

But what do you get for spend­ing this ex­tra money on fees? All TMCs claim that they can get sig­nif­i­cantly lower rates through their deals with pre­ferred air­lines, hotels and other sup­pli­ers than are avail­able on the con­sumer mar­ket.

Pi­eter Rieder, head of UK sales for the ATPI Group, says: “We nor­mally de­liver sav­ings of be­tween six and 17 per cent – thus mak­ing our con­tri­bu­tion to their bot­tom-line pos­i­tive.”

Ian Lawren­son adds: “At HRG we guar­an­tee the best avail­able air­fare or ho­tel rate. If we don’t, peo­ple will go else­where. We have to spend hun­dreds of thou­sands of pounds in an ef­fort to do that.”

TMCs also point out that not all air­fares and ho­tel rates are cre­ated equal: many of the cheap­est pub­lic prices are “un­bun­dled” with re­stric­tions such as no changes al­lowed to flights, or ho­tel rooms with­out com­pli­men­tary break­fast or wifi.

Denise Har­man, se­nior direc­tor of pro­gramme man­age­ment for Carl­son Wagonlit Travel, says: “If you look at cost, a TMC can gain ac­cess to the most com­pet­i­tive rates with added value and more flex­i­ble con­di­tions, such as in­clud­ing wifi and break­fast in the rate of your ho­tel room.”

So what level of com­mit­ment do you need to make in terms of travel spend­ing to use a TMC ef­fec­tively? Most TMCs claim that there is no real en­try point, although some say that a min­i­mum travel spend of £50,000 to £100,000 per year is re­quired to make it worth­while for both par­ties.

Shel­ley Mathews, vice-pres­i­dent of sales, Europe, for Cor­po­rate Travel Man­age­ment (CTM), adds: “It’s hard to de­fine what level of com­mit­ment is needed be­cause this will vary for dif­fer­ent clients, de­pend­ing on the num­ber of trav­ellers, trips, bud­get size and level of ser­vice they want.

“But there does need to be some com­mit­ment, oth­er­wise they won’t get the best from their TMC. It def­i­nitely

Man­ag­ing itin­er­ary changes is a key spe­cial­ism, al­low­ing em­ploy­ees to fo­cus on the task at hand

makes sense for any SME (small to medium en­ter­prise) with a travel spend in ex­cess of £100,000 to use a TMC.”

QUES­TIONS TO ASK

If you are se­ri­ously con­sid­er­ing us­ing a TMC to help you man­age your travel re­quire­ments, what are the key fac­tors to think about when choos­ing the com­pany?

TMCs may seem to of­fer the same ser­vices but there can be dif­fer­ences in the types of or­gan­i­sa­tion they spe­cialise in – some may fo­cus on SMEs or sec­tors such as le­gal or fi­nance, while oth­ers cater for in­dus­tries with very spe­cialised travel needs, such as oil and gas, or ship­ping.

Jo­han Pers­son, UK ac­count man­age­ment direc­tor for Amer­i­can Ex­press Global Busi­ness Travel, says: “A mis­take com­pa­nies make is ap­proach­ing too many TMCs, with­out know­ing what they want. Start by con­sid­er­ing if a TMC can pro­vide the tech­nol­ogy and ser­vices you need, this will make the se­lec­tion process much eas­ier.”

Pers­son iden­ti­fies three main ar­eas to look at when se­lect­ing a TMC: does the TMC have the right tech­nol­ogy now and what plans are there to de­velop this tech­nol­ogy? Can they of­fer a ser­vice that is scal­able, yet fa­mil­iar and per­son­alised? And fi­nally, do they fo­cus on the traveller ex­pe­ri­ence by hav­ing tech­nol­ogy, such as an app, that makes life eas­ier?

Jill Palmer, man­ag­ing direc­tor of tech­nol­ogy-fo­cused Click Travel, ad­vises that a key step to find­ing the right TMC is to check out its on­line book­ing tool be­fore mak­ing any com­mit­ment.

“Is it a good tool? Does it have all the travel con­tent you want? Does it al­low you to book the providers you re­ally want? Does it have live chat be­cause that can be re­ally use­ful for trav­ellers?

“If you’re look­ing for more of a com­pre­hen­sive off­line ser­vice, meet the team that’s go­ing to be help­ing you. Get­ting to know them first makes a big dif­fer­ence, and you can gain an un­der­stand­ing of how they ser­vice their cus­tomers.”

Julie Oliver, man­ag­ing direc­tor of Busi­ness Travel Di­rect, sug­gests meet­ing with three or four TMCs be­fore mak­ing any de­ci­sion.

“En­sure you have an agenda that al­lows the TMC to tell you about them­selves but also al­lows them to dis­cuss how they could work with you and de­liver on the things that are im­por­tant to you,” she says.

“I would al­ways sug­gest ask­ing for pric­ing af­ter the meet­ing, as it will give the TMC a bet­ter idea of what they need to de­liver and price ac­cord­ingly. If price is re­ally im­por­tant, look for a com­pany that of­fers an on­line tool for staff to use at re­duced rates, but that also al­lows you to call an ex­pe­ri­enced travel con­sul­tant to make more com­plex book­ings.”

Ask­ing about a TMC’s ex­ist­ing cus­tomer base is also an im­por­tant fac­tor in de­ter­min­ing their suit­abil­ity, says Andy He­g­ley, UK gen­eral man­ager at Cor­po­rate Traveller, which is part of Flight Cen­tre and spe­cialises in SME clients spend­ing be­tween £50,000 and £2 mil­lion a year on travel.

“How many and what kind of clients does the TMC look af­ter?” adds He­g­ley. “How can they guar­an­tee the best prices on hotels, car hire and air­fares? How do they in­tend to cre­ate time and cost ef­fi­cien­cies for your travel?”

TECH­NOL­OGY FO­CUS

He­g­ley says it is also worth ask­ing about a TMC’s tech­nol­ogy plat­forms and how th­ese sup­port an em­ployer’s duty-of-care re­spon­si­bil­i­ties, while ex­am­ples of suc­cess sto­ries re­gard­ing ex­ist­ing clients can also be use­ful – par­tic­u­larly if they are sim­i­lar types of or­gan­i­sa­tions.

The im­por­tance of a TMC’s tech­nol­ogy can­not be over­stated when choos­ing a provider – par­tic­u­larly when au­to­mated book­ings and other pro­cesses in­cur a sig­nif­i­cantly lower cost for the client. But, on the other hand, a poor on­line book­ing tool will be coun­ter­pro­duc­tive as trav­ellers may sim­ply de­cide not to use it.

TMC book­ing tools have long been crit­i­cised for lag­ging be­hind con­sumeror­i­en­tated travel apps in terms of their cus­tomer ex­pe­ri­ence and us­abil­ity. How­ever, they are slowly get­ting bet­ter and of­fer­ing more “end-to-end” ser­vices.

FCM Travel So­lu­tions (FCM), an­other of Flight Cen­tre’s TMC brands, has de­vel­oped SAM (Smart As­sis­tant for Mo­bile), which fea­tures el­e­ments of ar­ti­fi­cial in­tel­li­gence to pro­vide more per­son­alised in­for­ma­tion to trav­ellers’ mo­bile de­vices, as well al­low­ing them to con­nect to a hu­man con­sul­tant when nec­es­sary.

SAM has just gone live on both the App Store and Google Play, with a free ba­sic ver­sion that al­lows users to add trips man­u­ally and view traf­fic, weather and flight up­dates, as well as lo­cal ground trans­port ser­vices. The pre­mium ver­sion of the app for FCM clients in­cludes auto-synch­ing of travel book­ings, a self-book­ing tool and live chat.

An­other way to dip a toe into the travel man­age­ment wa­ters, with­out mak­ing any firm com­mit­ment, is to try a ser­vice such as Click Travel’s Travel Cloud plat­form. “It’s a com­pletely self-ser­vice model,” says Click Travel’s Jill Palmer. “It’s on­line and free – or­gan­i­sa­tions can sign up to use Travel Cloud and can im­ple­ment pre-ap­proval of trips as well. We be­lieve the au­to­mated on­line ap­proach will be the fu­ture of book­ing travel. Most peo­ple don’t want to phone up to make a ho­tel reser­va­tion.

“Users don’t pay a charge for the stan­dard model of poli­cies and im­ple­men­ta­tion, as

...we re­cover costs through the sup­plier chain, such as com­mis­sion from cer­tain hotels and other sup­pli­ers.”

This kind of op­tion means those who are ner­vous about get­ting locked into a con­tract with a TMC can get an idea of whether they can ben­e­fit from a TMC’s ser­vices.

How­ever, not all TMC de­vel­op­ments are fix­ated on tech­nol­ogy and low­er­ing trans­ac­tion fees to gain new cus­tomers – ser­vice is still an im­por­tant part of their mes­sage and pitch to would-be clients.

Egen­cia, which is Ex­pe­dia’s TMC brand, has launched Egen­cia Ad­van­tage of­fer­ing a range of ser­vices to “sup­port busi­ness trav­ellers through­out their en­tire jour­ney”. Th­ese in­clude air­port lounge ac­cess, traveller risk man­age­ment, visa ser­vices and also help get­ting com­pen­sa­tion for de­layed or can­celled flights within the EU.

There are a grow­ing num­ber of op­tions when choos­ing a TMC – from an in­creas­ingly au­to­mated (and cheaper) book­ing sys­tem to a VIP-style off­line ser­vice with ded­i­cated travel con­sul­tants look­ing af­ter in­di­vid­ual trav­ellers.

In be­tween th­ese ex­tremes, there are plenty of hy­brid mod­els of­fer­ing el­e­ments of both types of ser­vice, which TMCs are hop­ing will tempt or­gan­i­sa­tions who do not have a man­aged travel pro­gramme to give them a try and see if they can live up to their prom­ises about the many ben­e­fits they pro­vide for both trav­ellers and their em­ploy­ers.

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