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Selecting a Travel Management Company

Covid-19 decimated the financial health of the TMC community and resulted in a tidal wave of layoffs and furloughs that swept through agents and executives alike. Ironically, after the crisis of repatriating employees and canceling trips died down, the ongoing challenges to business travel presented by Covid-19 have delivered a strong argument for the vital role of the TMC partner as the center of the managed travel ecosystem.


Heading the list of TMCs' modern value propositions is ensuring traveler safety. As travel re-emerges, tracking the spread of Covid-19 and evaluating viral risk for given markets—whether through their own in-house services or via third-party risk specialists—will be a core competency expected of TMCs, with Covid monitoring now as important as tracking political unrest, terrorism and natural disasters. 

Beyond traditional duty-of-care functions, TMCs also will need to serve as a source of essential information about the cleanliness and hygiene protocols implemented by airlines, hotels and ground transport providers to help protect travelers from infection. Information on such measures will be essential and must be incorporated into the workflows of TMCs' booking tools. 

Sourcing this crucial data and providing it to travelers in a clear, accurate and accessible way will take considerable heavy lifting behind the scenes, including implementing new tech connections and training agents to provide support. Much of that cost will be passed along to corporate travel buyers in the form of higher fees and/or increased handle time for bookings, and buyers requiring high-touch service could be especially impacted by those costs. 

As TMCs get a handle on their new value proposition, buyers going to market for a new TMC should prepare themselves for structural changes when it comes to service and fee models. Even if a buyer isn't going out for bid, existing contracts could be opened for new negotiations. 

The pandemic brought several long-simmering issues with corporate travel management contracting and service models to the forefront. For TMCs, booking fees went suddenly dry, revealing the inherent vulnerability of transaction-based pricing structures to a demand shock. 

Under terms of existing contracts between TMCs and buyers, booking voids and cancellations were not counted as transactions, leaving the TMC to shoulder the risk for cancellations. When the pandemic ground travel to a standstill, that risk came crashing down on TMCs, which simultaneously faced a surge in demand for cancellations and a choking off of revenue from new bookings—not exactly a recipe for success. 

After that hard lesson on the perils of transaction-dependent income streams, travel management companies may begin pushing for cost-plus pricing, where a client pays its TMC's direct expenses plus a fee that comprises the TMC's overhead costs and profit. Some major TMCs that had such arrangements in place before the onset of the Covid pandemic said the model worked quite well through the crisis, aligning both parties' interests to provide incentive to work together in sorting through the chaos. 

But while cost-plus pricing might work well for large corporate and enterprise clients, it likely is too complex for smaller or midsize clients, who may be better served with some form of subscription model, in which the client pays a set fee—typically monthly—based on its number of employees, in return for unlimited bookings, support and other TMC services. 

To maintain close support while ensuring agents aren't overwhelmed with service requests, some TMCs have begun exploring a tiered subscription model, in which a corporate client selects from among a variety of service levels. Under that model, each tier would have a monthly cap on the number of free support calls and bookings, with higher-priced tiers offering higher limits, before marginal costs would kick in. 

Beyond exposing pricing issues, the Covid-19 outbreak presented a pressing problem for corporate buyers—the risk that their dedicated agents and account managers would be furloughed or even laid off as TMCs struggled with their own bottom lines. 

The prospect of losing a key agent was so dire for some corporates that they opted to pony up to fund agent costs rather than risk having that crucial link in their travel management chain severed by layoff or furlough. Moving forward, ensuring TMC resource continuity will be a key goal—and a price many corporates are willing to pay. 

Despite the challenges inherent in the "new normal" of corporate travel management, TMCs are eager to win new accounts by proving their ability to serve the demands of the post-Covid industry. And with the pandemic sparking renewed interest in corporate travel programs from organizational executives, travel buyers may enjoy unprecedented backing from corporate leadership as they reimagine their relationship with their TMCs.

Benefits Of Using A TMC

1. Cheaper Flights and Hotels

While it is true that a TMC company will require payment for their services, often on a subscription basis or by charging a fee for the services you use, the reality is that they can still save you considerable amounts of money. This is especially true if you travel regularly, or have employees who travel regularly.

A travel management company will have business connections across the entire travel industry, allowing them to gain favourable rates for hotels. They also have the expertise needed to look for cheap flights in the right place and book flights at the right time. As a result, overall travel costs can be significantly reduced.

2. Expert Advice and Insight

Any experienced travel management company will know the travel industry inside out and will have learned some tricks along the way. With this in mind, they will be able to provide expert advice on how to best spend your money, what the best travel routes are, and what you need to know before you visit certain destinations.

In many cases, businesses will work with a TMC company that specialises in dealing with clients in the same industry as them. This can be extremely useful, as some industries have very specific or nuanced travel needs. Prior experience can help the travel management company to optimise your travel strategy and steer you away from common pitfalls.

3. 24/7 Help and Support

Another great thing about working with a travel management company is the availability of support. With most companies, this will be available around the clock, or close to it. This means that if something goes wrong, if you need to make a sudden change, or if you need urgent advice, there will be someone on hand to help you.

Without using a travel manager, you will need to handle any issues with travel internally. This could mean you struggle to find support outside of your core business hours, or that you are personally responsible for providing support for every corporate traveller in your organisation, even if they need help at unsociable hours.

4. Assistance With Travel Policies

Business travel should be as consistent as possible, but you also need to keep travelling employees happy and safe. For these reasons, it is imperative that you establish a travel policy. With a clear policy in place, everyone knows where they stand, acceptable and unacceptable behaviours can be outlined, and rules on expenses can be established.

Not only can a travel management company assist you with creating a robust policy, they will also be able to help to enforce it, such as by only recommending travel options that meet all of the requirements.

5. Consolidated Reporting

When it comes to reporting of your travel expenses, most travel management companies will consolidate information into a single report, helping to bring the important information together in one place. This then makes it easier to keep track of your travel expenses and identify whether or not your spending in this area is too high.

In addition to consolidating reporting in this way, the best corporate travel management experts will go the extra mile, helping you to actually analyse the information in your reports, so you can make adjustments to your strategy.

6. Travel Alerts or Warnings

With many businesses, once travel is arranged, it is put out of mind until nearer the time. However, with a travel management company, any travel plans can be more actively monitored and managed. One of the ways this manifests is through the use of travel alerts or warning messages, which are sent to flag up important information.

For instance, alerts may be sent if there is disruption on the planned travel route, allowing you to prepare for all eventualities. Finding out this information in a timely manner can also provide huge financial benefits.

7. The Use of Modern Technology

It is important to understand that a modern travel management company will provide you with the necessary tools and systems to book your travel easily. This could, for example, mean they will provide you with computer software, or a mobile app, which will allow you to submit your travel plans or requests at any time of the day.

The use of cutting-edge technology enables far greater efficiency in this area. If you are managing travel arrangements yourself, the entire process can take up a significant amount of time. By contrast, using a mobile app or computer software package to make a request to your TMC company can usually be done in a few short minutes.

8. Greater Peace of Mind

Travel management can be complicated and it is surprisingly easy to overlook something, whether it is sorting out visa requirements, making sure business travellers have the right medical coverage, or organising airport transfers. A key benefit of working with a TMC company is the peace of mind it affords.

Your chosen business travel agency will work with you to understand your needs and then make sure everything is taken care of. Their expertise in the field makes it far less likely that anything will be accidentally overlooked


9. More Time For Other Tasks

Finally, a major reason why so many organisations turn to a travel management company is because it frees up more of their time, which can then be spent on other tasks that are crucial to business success. Travel management is a multi-faceted discipline, and finding the cheapest flights, the best hotels and arranging transfers all takes time.

Not only will a high-quality TMC company be able to handle these responsibilities on your behalf, they also have existing business relationships with vendors, offering them much faster access to the best possible rates.

Source : Business Travel News / Revfine

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