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?
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?”
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.