THE KNOWLEDGE 2 Buyer perspective
Tom Stone, Managing Director, Sirius Travel Sourcing
WHOSE CLIENT IS IT ANYWAY?
I recently witnessed a rather acrimonious exchange between a TMC and a hotel which had made a legitimate sales approach to a potential client that used the services of the TMC, writes Tom Stone. The basis of the aggrieved TMC’s complaint was that the hotel knew said client was 'one of theirs' and should thus have sought to make any approach via them.
management were a GCSE subject a good question would be: “Is a corporate the primary client of the TMC or the supplier? Discuss.” It’s a vexed question and one with no easy answer because there are numerous variables. A TMC that
T
his and some other incidents I have seen in the past got me considering what the answer to this conundrum was. In fact, if corporate travel
wide issue but where it does raise its head, some discussion is warranted because in many cases corporates are not even aware that this tug of love exists. As part of my research for this article I
conducted a (not very scientific) survey of travel management companies and suppliers. All the suppliers said that at some time they had been harangued by TMCs (they called them agents – more of that later) because of turf issues associated with what they perceived as being 'their' client. Interestingly, the view among the TMCs was much more diverse, with the slight majority claiming a very relaxed attitude to client/ supplier relationships and varying degrees of disquiet among the remainder. Does it matter? In many cases possibly not,
except that there are communication and commercial implications where the TMC assumes the role of gatekeeper. An example of a communication issue
would be when a corporate has a commercial
“Many corporates believe that they alone should be the arbiter of whether their travel management company sits with them in supplier meetings”
corporate and circumventing corporate policies by showering TMC staff with gifts and other inducements to sell away from corporate preferred properties. It remains likely that the intermediaries that
are more relaxed about direct communication between clients and suppliers will be those who truly do operate as an extension of the clients – the operationally outsourced part of the travel programme.
Tom Stone,
Managing Director, Sirius travel
sourcing specialists Tom Stone set up
Sirius Travel Sourcing in 2003, having
identifi ed a strong need in the market for experienced, incisive travel
sourcing consultancy. His experience prior to this consisted of procurement-led
travel management with a number of blue chip organisations.
has introduced a client to a hotel via its own hotel programme may feel hard done by if the hotel decides to by-pass them and invite the client into a direct relationship (ie, a net non-commission paying relationship) but that type of approach is likely to backfire in the long term. However, if a hotel seeks to establish a new relationship direct (as was the case in the example I witnessed) then really, does the TMC have the pre-ordained right to be consulted or involved? This is not an industry-
agreement with an airline and the airline is requested by the TMC to notify them before the client of any changes that may be about to take place. An example of a commercial issue might be
when a corporate has a net rate with a hotel that is not part of the TMC's programme and the TMC denies that hotel access to the staff servicing the corporate because (for them) it is 'non-preferred'. A worse example is when the TMC seeks to
extract tribute from a supplier, purely for distributing a net fare or net rate. It should be said of course that from a supplier’s point of view, there will be times when they are grateful for TMCs to introduce them to potential corporate clients, even if that introduction does come at the cost of a financial incentive in the shape of an override or a 'marketing' agreement. It should also be said that suppliers are themselves capable of working around the
Those that are perhaps a
little more insecure about direct relationships are possibly operating in the more traditional travel agent role where revenues are focussed on the ability to be paid by the supplier for distributing their product (and where the enthusiasm for this fluctuates according to the price paid). In these cases, a direct relationship between the client and the supplier may be a threat to the status quo. The role of the travel management
company should be as a useful enabler rather than gatekeeper. Ultimately, many corporates will believe that they alone should be the arbiter of whether their TMC sits with them in supplier meetings – whether these are negotiations or account management meetings. For many the assistance provided by their travel management company is valuable indeed; whether this merits an omnipresent involvement is another matter.
THE BUSINESS TRAVEL MAGAZINE 9
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