Getting TOGETHER

SMES are firmly in the sights of TMCS these days but are they strictly necessary for small travel budgets? Rob Gill assesses the pros and cons of working with a TMC

To misquote Shakespeare, “to tmc, or not to tmc”, that is the question worth considering when it comes to how small and medium-sized enterprises choose to manage their business travel.

During the past few years, travel management companies have increasingly targeted smaller organisations, who may never have considered using a business travel agency, instead relying on leisureorientated platforms to book flights, hotels, rail tickets and more.

TMCS see the SME market as a vast untapped market for their services – and it’s hard to doubt their logic: SMES in the UK employ 16.3 million people with a collective turnover of £2trillion per year.

Previously, larger TMCS have struggled to come up with products to effectively serve the SME market but this is changing rapidly as improved technology and automation reduces the costs of them reaching smaller clients.

Even American Express Global Business Travel, for example, is offering a “bundle” of services to SMES through its Business Travel Made Simple platform.

For an SME new to the concept of managed travel, the choice can be daunting as it’s not just TMCS vying for their business. Technology companies, including online booking tool providers and travel management platforms such as Travelperk, as well as big-name leisure travel brands, including Booking.com, are also making a play for the market.

tmc offerings

Click Travel’s Chief Executive Jill Palmer says SME clients should look beyond whether a company has a “TMC badge” or not, and instead consider the advantages of managing travel.

“There’s a huge benefit to having all your business travel booked in one place,” she says.

“You can implement a travel policy to get travellers

to make the right choices and get reporting to know how much they are spending. It also means PAS don’t have to spend a lot of time booking travel on three different consumer sites.”

Simone Buckley, CEO of Fello, adds that “speed and ease of service” are two of a TMC’S top selling points, alongside the ability to change bookings either online or by calling a consultant familiar with the SME’S requirements.

“They also benefit from 24-hour emergency service, traveller risk management, a single point of payment and credit facility, as well as consolidated reporting of travel spend and booking patterns,” says Buckley.

Other TMCS are also keen to stress that managing business travel effectively goes far beyond making bookings.

“We can bring more value to a business especially when it comes to controlling costs – both in terms of the best rates and ensuring bookings are within travel policy,” says Tyler Buckley, Strategic Business Proposal Manager at Business Travel Direct.

“The value we bring to SME clients is often quite significant compared with larger clients with mature programmes. We can achieve a significant ROI for clients in the earlier stages of managing their travel spend.”

Payment plans

One of the first questions on the lips of any SME thinking about using a TMC for the first time is 'how much is it going to cost us?'

The answer is not always simple as TMCS now offer a plethora of payment options and strategies, which are largely dependent on the level of service required.

The general rule of thumb is the more automated the process, the cheaper it’s going to be. For those wanting a “higher touch” human experience, the cost is always going to be higher.

Click Travel offers SMES use of its online booking tool for free with no transaction fees – the TMC makes its money from suppliers. Click has also just introduced a new upgraded “Plus” package for £399 per year, including extra functions such as the ability to customise travel policy, sync calendars and automate pre-trip approvals.

Similarly, Travelperk offers a basic booking option for free and then charges £9 per trip for a premium plan offering a higher level of service to clients, including priority customer and concierge services.

Earlier this year, travel management company Amber Road launched a new

SME service called TRAQ, which charges clients a monthly flat fee of £29 per traveller, which is only paid if the traveller is active during the month.

While this sort of subscription-based model is becoming more popular, transaction fees remain common among

TMCS specialising in the

SME market, including

Corporate Traveller, which is part of the

Flight Centre Group along with FCM.

“We don’t tie clients into contracts and our payment model is based on transaction fees, but we provide flexible payment options so clients can choose whether to pay by credit card or on account,” says

Andy Hegley, UK General Manager at Corporate Traveller.

Offering flexibility to SMES is also crucial for Gary Mcleod, Managing Director of Traveleads. “When business travel might be sporadic, we would usually recommend the transaction fee route. Once they develop a more regular pattern of travel, we can look at management fees or subscription

One of the first questions on the lips of any SME thinking about using a TMC for the first time is 'how much is it going to cost us?'”

models where we tailor charges against agreed activity,” he explains.

Most SMES recognise that there is a “cost to managing travel”, says Kevin Harrison, Good Travel Management’s Managing Director, with TMCS needing to “demonstrate broader value”, he says.

“There is no such thing as a free travel management service. If there isn’t a fee, it will be somewhere within the pricing model,” adds Harrison.

Size matters – or does it?

Another key question is how much does a SME have to spend on business travel each year to make using a TMC worthwhile? The answer varies, with some suggesting at least £50,000 per year and others being more flexible, depending on the client’s current needs and potential growth.

“A business is never too small for a TMC,” says Brett Gerrett, General Manager, Isleworth Travel Management, which looks after clients with a business travel spend of up to £1.5million per year.

“Clients spending less have access to the same great fares and service that all clients access,” says Gerrett. “And an offline service is perfectly suited to a client with a budget of less than £60k.”

Kyle Daniels, Product Marketing Manager for Clarity, adds: “If we judge companies based on annual spend or number of journeys each year, we aren’t taking into account their ability to grow.

“Everyone has to start somewhere. It’s about having open and honest conversations with prospects to determine if they need a TMC or just a better way of booking their current volume of travel,” says Daniels.

Mark Wilson, Corporate Travel General Manager at Travel Counsellors for Business, adds: “We aren’t interested in the number of transactions a client does. Our operating model flexibility allows Travel Counsellors to operate in a way that ensures a personal service, with a single point of contact for all aspects of travel – SMES value this connection the most.”

Jason Geall, VP Northern Europe for American Express Global Business Travel, says travel management is becoming

“more accessible” to SMES because of “digitally-driven services”.

“Depending on the customer’s factors and circumstances, we already offer services to clients with annual spend from £250,000,” Geall adds.

“And we are continuing to explore new tech-based travel management solutions to help businesses with even smaller spend.”

If we judge companies based on their annual spend or the number of journeys they make each year, we aren’t taking into account their ability to grow”

Alternative routes

Of course, there are other options for those companies keen to better manage their travel but wary of using a TMC.

One of these alternatives is to start using an online booking tool offered by specialist companies such as SAP Concur, KDS or Traveldoo, among others.