How to choose a TMC

Ar­rang­ing busi­ness travel can be ex­tremely time-con­sum­ing, not to men­tion stress­ful if plans go awry. Travel man­age­ment com­pa­nies can ease the bur­den – but at a price

Business Traveller (Asia-Pacific) - - TRAVEL MANAGEMENT - WORDS ROB GILL

Know­ing you have an ex­pe­ri­enced in­di­vid­ual ready to help you makes a big dif­fer­ence to our trav­ellers

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

WHY USE A TMC?

Ben­son

Tang, re­gional di­rec­tor, Asia, for the As­so­ci­a­tion of Cor­po­rate Travel Ex­ec­u­tives (ACTE), says: “In an in­creas­ingly com­plex busi­ness en­vi­ron­ment, cor­po­rates are no longer look­ing for TMCs to sim­ply ful­fil jobs as an or­di­nary book­ing agent. It is crit­i­cal to have TMCs that of­fer full-scale ser­vices.”

Tang iden­ti­fies four main ar­eas that TMCs can pro­vide as­sis­tance to busi­nesses: pro­vid­ing con­sul­ta­tion on how to per­fect their travel man­age­ment pro­cesses; op­ti­mis­ing costs to bet­ter re­flect chang­ing trav­eller be­hav­iour based on firm data; proac­tively pro­vid­ing anal­y­sis and mean­ing­ful data dur­ing a com­pany’s re­quest for pro­posal (RFP) process; and en­hanc­ing trav­eller sat­is­fac­tion within the com­pany’s cost frame­work.

Lyn­d­sey Atkins, mar­ket­ing di­rec­tor for Reed & Mackay, adds: “Busi­ness trav­ellers are of­ten [rel­a­tively] 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.”

Jo Sully, vice pres­i­dent and re­gional gen­eral man­ager, Aus­tralia, New Zealand and South­east Asia for Amer­i­can Ex­press Global Busi­ness Travel (GBT), agrees, adding: “TMCs pos­sess tech­nol­ogy and tools to sim­plify the book­ing and travel process and can pro­vide the abil­ity to track and com­mu­ni­cate with trav­ellers dur­ing times of dis­tress. Such sup­port can sig­nif­i­cantly im­prove trav­eller peace of mind.”

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 trans­ac­tion fees, a set of fixed rates added to ev­ery travel book­ing at the time of the trans­ac­tion, as a way of charg­ing for their ser­vices.

A rule of thumb is that these trans­ac­tion fees will be be­tween 2 and 5 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.

Amer­i­can Ex­press GBT’s Sully says: “We’ve seen in­stances where mid-sized com­pa­nies in Aus­tralia have saved close to A$300,000 [US$217,270] through en­gag­ing a TMC. Through our data and in­sights, we’re able to as­sist com­pa­nies in numer­ous ar­eas that drive cost sav­ings in­clud­ing travel ne­go­ti­a­tions, help­ing to change book­ing be­hav­iour and in­creas­ing com­pany-wide travel pol­icy com­pli­ance.”

ACTE’s Tang adds: “Nowa­days, lead­ing TMCs not only bring cost sav­ings in travel prod­ucts – air tick­ets, ho­tel rooms and so on – to the ta­ble, they can pro­vide 360-de­gree sav­ings through the use of ar­ti­fi­cial in­tel­li­gence and on­line book­ing tools, as well as when it comes to ad­min­is­tra­tive cost sav­ing such as pay­ment and re­im­burse­ment time.”

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 how much bud­get must you com­mit or how much must you spend on travel to make us­ing a TMC an ef­fec­tive so­lu­tion? Most TMCs claim there is no real en­try point, although some say that a min­i­mum travel spend of US$65,000 to US$130,000 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 makes sense for any SME [small to medium en­ter­prise] with a travel spend in ex­cess of £100,000 [US$130,000] to use a TMC.”

Ben­son Tang goes one fur­ther, adding that SMEs in par­tic­u­lar stand to ben­e­fit from em­ploy­ing a TMC pre­cisely be­cause an SME's re­sources are more lim­ited. “A TMC’s role is even more in­dis­pens­able for SMEs, as they have fewer re­sources and/ or travel man­age­ment lead­er­ship,” he says. “Hence, they can rely on the con­sul­ta­tion and ad­vice from TMCs.

“More­over, the econ­omy of scale when it comes to pur­chas­ing power is far smaller for SMEs than for For­tune 500 firms. TMCs can there­fore unite the buy­ing power of their SME clients to ob­tain bet­ter deals for those clients.”

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.

“The key fac­tors to con­sider when choos­ing a TMC are whether they have the ser­vices, tools and tech­nol­ogy to sup­port your spe­cific travel needs,” says Sully. “Trav­eller needs and pref­er­ences vary greatly, which is why we pro­vide a va­ri­ety of ways to reach our travel coun­sel­lors in­clud­ing via app or phone. Our travel sup­port team de­liv­ers lo­cal as­sis­tance by travel coun­sel­lors who know the busi­ness

trav­ellers on an in­di­vid­ual ba­sis, and this is sup­ported by our 24/7 global travel net­work, which can help trav­ellers when­ever and wher­ever they need as­sis­tance.”

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 off line 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 UK-based 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.”

TECH­NOL­OGY FO­CUS

Andy He­g­ley, UK gen­eral man­ager at Cor­po­rate Trav­eller, which is part of Flight Cen­tre, says it is also worth ask­ing about a TMC’s tech­nol­ogy plat­forms and how these sup­port an em­ployer’s duty-of-care re­spon­si­bil­i­ties. In ad­di­tion, 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 is para­mount 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 con­sumer-ori­en­tated 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), one 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 as 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 au­tosynch­ing of travel book­ings, a self-book­ing tool and live chat.

An­other way to dip a toe into 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 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, 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.

In con­clu­sion, there are a grow­ing num­ber of op­tions avail­able when choos­ing a TMC – from in­creas­ingly au­to­mated (and cheaper) book­ing sys­tems right the way through to a VIP-style off­line ser­vice with ded­i­cated travel con­sul­tants look­ing af­ter trav­ellers.

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

TMCs claim they can get sig­nif­i­cantly lower rates than are avail­able on the con­sumer mar­ket

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