• Speaking out: TMC remuneration

The crisis is a chance for TMCS to find a better place in the eco-system, says Festive Road's Paul Tilstone

At the peak of the lockdown in March and April, the value of the TMC was highly visible and much lauded. It always is in times of crisis, and rightly so.

TMCS were processing complicated refunds and vouchers, repatriating travellers and doing their best to support a fast changing and increasingly complex landscape. And they did so whilst their revenues fell through the floor and their human resources were placed on furlough. They deserve huge praise.

But this reminds us that the TMC proposition and business model needs reconsideration. When they are most needed, most valued, their finances don’t always align. And this isn’t just the case during the recent pandemic. As remuneration methods have evolved since the commission cuts of the 1990s, TMCS have arrived at a place where they often provide value which isn’t charged for and charge for services which aren’t valued.

Too few have managed to develop a model which simultaneously celebrates their worth, highlights their differentiation, and provides a robust revenue stream.

This was illustrated by an exercise we undertook a few years ago where we asked

TMCS what makes them different. The vast majority told us “our service, our people and our technology”, but when everyone says the same things make them different, then of course there is no difference.

That isn’t to say it’s true of everyone. We know that some TMCS are already on a path to differentiation and there are some existing cases of alternative financial models. But our new, post-covid world and the changing requirements of travel managers and travellers will surely accelerate the need for TMC development across the board.

Now we’ve started on the return slope, scaling staff at the right pace whilst revenues are returning is going to be a difficult balancing act for TMCS until the technology catches up and online resumes.

This will seriously occupy their time. But it's equally as important for them to take this time to reconsider what makes them different and valuable for the long-term and develop a revenue model that ensures they don’t just survive, but thrive.

If we look to other sectors we can see that subscription and freemium pricing, the business models du jour pre-covid, really showed their appeal during the crisis. If you think about what you consumed in March and April, apart from the food and Gin of course, it was probably via a subscription or freemium model. Just think Netflix or Zoom. We should look to these sectors as our

TMCS become more digitised and consider what other models might work.

There’s no doubt these difficult times will see some TMCS struggle and fade, but those with the will, the skill and the financial position (the bill) to change into something where remuneration is aligned to value will emerge as better partners in the eco-system. You get the sense that this could be a once-in-a-lifetime opportunity to start from a blank sheet of paper, to create something exciting and desired beyond dire times, and yet born out of our biggest crisis

to date. #Beyondthepause

TMCS have arrived at a place where they often provide value which isn't charged for and charge for services which aren't valued”