What Corporations Need from TMCs
by Michael BilligWhat’s the greatest challenge facing travel-management companies (TMCs) today in their quest to establish and strengthen working relationships with corporations and their travelers? To a number of agency executives fresh off four days of high-profile networking with their corporate counterparts at the 2010 National Business Travel Association (NBTA) Convention & Exposition in Houston, it’s the need to prove their value to their customers… every day.
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Mark van Iersel, executive director-marketing and partner recruitment for GlobalStar Travel Management, said, “Travel (management) companies really need to re-think their value-added (attribute) to the traveler, to the travel manager, to the finance manager… in fact, to the entire decision-making (segment) of the client company.”
In light of the “globalization of the business-travel buying process,” van Iersel said this “commodity” is inexorably moving away “from travel managers toward professional procurement managers.” Because of the increasing “complexity,” as well as “regionalization” of the process, successful business travel agencies have to be able to help the client company:
o Gain visibility into global travel spend for analysis and financial management;
o Leverage worldwide purchasing power;
o Establish better systems to track employees and strengthen security;
o Improve efficiencies, reduce costs and boost productivity;
o Achieve consistent application of corporate policies and increase travel-policy compliance; and
o Improve global-knowledge transfer in order to promote best practices and satisfy traveler needs and requirements.
Failing to provide these capabilities, according to the GlobalStar executive, will inevitably force a client company to turn to a TMC offering such “a multinational travel-management solution… that works!”
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Travel Leaders’ vice president of global sales-western region, Roger Gould, agreed, adding: “We need to continue to add more value (for that which our clients) are willing to pay.”
Gould lays some of the blame at suppliers’ doorsteps, pointing to the fact that they “continue to reduce commissions” and step up their efforts to market directly.
However, he similarly laid blame on the agency community as well, stating, “Part of the issue is that there are still too many agencies. We need more consolidation so we don’t compete on price all the time.”
Another whose thoughts run along much the same lines is Kathy Bedell, BCD Travel senior vice president. ”The greatest challenge to our ability to best serve corporate clients is the misperception about the value of managing travel.
“Many corporations think they can achieve their goals by allowing travelers to book their own trips via the Internet. They fail to take into consideration critical components of a well-managed program, like traveler safety, management of unforeseen or hidden costs, and alignment of the travel program with corporate objectives.”
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Of course, tied to necessary travel-management objectives is the ability to carry them out efficiently, which requires technology. Directravel’s president, Pat Fragale, contended, “The greatest challenge facing TMCs in this environment is remaining technologically savvy.
“We are continuously facing changes and enhancements from inventory channels, i.e., the GDS systems, as well as corporate-reporting requirements. Maintaining a cutting-edge methodology to take advantage of these tools as they evolve, as well as communicating with clients to ensure they understand the ramifications of these changes, is a top priority,” said Fragale.
Fragale added: “For example, capturing ancillary airline fees is of great concern and a necessary requirement for clients (these days). They want to be able to report on consolidated data through their TMC, and currently this is only possible via post-expense reporting. The agency community can address this by using the strong relationships they have built with their partners (GDSs and airlines) to keep the flow of information open, so that the vendors clearly understand the importance this holds for the business traveler, as well as to convey to clients the status and challenges faced by the vendors.”
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Mary Ann Harvey, Wings Corporate Travel vice president of operations-The Americas, elaborated on the challenges presented by the changing products and proliferation of booking methods. “The diversification of products and booking channels is a key challenge for TMCs, especially as it relates to capturing and analyzing the client’s overall spend and savings opportunities.
“For example, the ever-changing airline methods for increasing revenues via their ancillary products have created significant challenges…while this unbundling of charges seems here to stay; the biggest challenge currently is the ability to report on these ancillary fees (seating, check-in, baggage, etc.) and incorporate that [data] into the standard travel reports.”
However, as so many throughout the travel-management agency community have learned, Harvey pointed out, “Each airline has [its] own methodology for collecting these fees, so there is definitely a gap for the correct technology to be developed to provide travel managers with this reporting.”
