Survival of the fittest

Neil Armorgie, CEO WIN Global Travel Network, owned by the Advantage Travel Partnership, explains why he’s not at all worried about the future of travel management companies, despite the many disruptors.

"There is lots of talk about the disruptors in the business travel sector. Surely the best price is directly online? How can TMC’s survive in the face of potentially restricted access to airline stock? Technology meets the corporate accounts requirements and there is no need for an intermediary, as this will only put up cost, AI does away with the need for human intervention at all.
But then along comes the real disruptors to travel – the Beast from the East, airline strikes and terrorist activity.

So, you have booked direct or via an OTA, good luck trying to get through to a human to cancel or change. The sheer volume of calls means that if you do get through at all, you will be waiting hours and by then the alternatives are limited. However, if you have booked through a TMC they are monitoring their travellers and their flights, rebooking alternatives, booking overnight stays and talking to their clients about the best options.

Corporate travel is not just about the transactions. If it were, TMCs would have disappeared years ago. The modern TMC has evolved and will continue to do so. There is so much more than just booking travel – this is only a small part of the process and offering.

The modern TMC is a centre of excellence in all things business travel related. Yes, a corporate travel buyer is looking to them to be able to access the best available fares but the TMC is able to provide so much more; options and choice through one point of contact not just one supplier; the TMC can negotiate on behalf of an account and is able to benchmark rates to ensure best in market prices; they are also able to access closed user special fares, not available online to the wider market; often more importantly in these troubled times a TMC can keep track of their traveller wherever they are in the world, providing duty of care and peace of mind.

The service also includes dealing with cancellations and changes (the average booking can often change between 3 and 10 times between the initial booking and the travel date and on average 10% of bookings are cancelled altogether). This is then all backed up by payment solutions to enable transparent, quick and easy settlement of transactions and the provision of in-depth data to keep the travel manager informed for budgeting purposes and to enable identification of areas where costs can be reduced or eliminated. Not to mention around the clock support. TMCs and their support teams provide immediate assistance when it is needed most. Ultimately the major commodity that the corporate account is saving is time and with this worry.

Then there is technology: how is a travel buyer able to stay abreast of all the travel market developments? The TMC is the expert and is able to fight through the noise undertaking the filtering process to provide the most cost effective and suitable solution. Our recent whitepaper Man vs Machine: Harnessing Technology to Empower Your People included research which demonstrated that 76% of ITM buyers are looking for help from a TMC to keep them appraised of the latest technology.

Clearly, all this comes at a cost. This is a fully-fledged professional service and what professional service does not? We can all write a will online, but do we choose to? We can all do our own conveyancing when buying a house, but do we? We are all willing to pay for service. None of us flinch (well not too much) when we have to use a solicitor, so why should corporate travel be any different?

As travel management has evolved into full ‘traveller management’ then so has the way TMCs are remunerated. A straight transaction fee for booking has been replaced with menu pricing depending on what elements of the service the corporate client requires and this will evolve further into a suite of choices. If the client only wants a basic online booking process and reporting with limited or no other support, then this cost will clearly be different to a holistic travel management with full end-to-end care of the traveller from inquiry to booking, to changes, to travel and then returning home.

The TMC realises that everyone is trying to take cost out of their business. The TMCs who are succeeding are strategic partners to their corporate accounts. The smart travel buyer will use the TMC as an extension of their business and focus not on the 5% (which the TMC fee typically represents of the whole transaction) but on the 95% where real savings can be made in their travel policy.

So, to paraphrase Mark Twain, reports of the death of the travel management company have been greatly exaggerated. They are not just surviving, but are actually thriving."

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