Latest figures from the Guild of Travel Management Companies (GTMC) show members’ quarterly transaction figures for 2014 were up 4 per cent year-on-year, to 4,785,424. The number of car hire transactions was the highest riser, up 30 per cent, with air travel the lowest, up just 1 per cent. Hotel and rail transactions were both up 5 per cent.
low-touch end there will be more, simpler, cheaper ways to booking travel and have it managed,” he says. “At the other end, you’ll have bigger corporations that want to change the way travel is managed. They will focus on policy, process and use of data, which lends itself to consultants. Being able to offer GDS-literate staff is losing value, and it’s not sustainable to base a business on that skill. It’s going to be the stuff on top of bookings that will be priceless.”
CUTTING COSTS Outsourcing large parts of a corporate travel department to the TMC is increasingly prevalent. Procurement departments have recognised the value of cutting head count and other associated costs out of their busi- ness. Working with the TMC partner then provides more flexibility for the corporate to increase or reduce the services, and human resources to meet corporate goals. Some organisations in the pharmaceu- tical and financial sectors have recently employed this strategy. But the shipping industry, according to ATPI’s Knights, is ahead of the curve. “Over the last 15 years the industry faced challenges with over- capacity and lack of trade,” he says. “As the [global] recession hit, it had a big impact on shipping, especially in Norway. They had to look at their cost base, and so travel was totally outsourced. In the energy industry there are teams of administrators who act as bookers, and they liaise with TMCs. Should we turn those admins into travel agents?”
Outsourcing large parts of a travel department to the TMC is increasingly prevalent
Amex GBT’s Macleod adds: “The full outsourcing [of travel departments] often makes sense. But you must provide the right business intelligence at the right time to the budget holder and chief financial officer, and you must manage it in a way they get everything they need.” Mike Koetting, executive vice-president
of TMC services at Concur, says some TMCs may in future have to break with traditional models to win increasingly valuable busi- ness from individual travellers. “Tradition- ally, TMCs have bundled their services, to include online ticketing fulfilment, account management services and agent assistance 24/7,” he says. “We’ll continue to see that, but in the future we’ll also see the ability to unbundle certain features and make them available on an à la carte basis to travellers at their discretion.” He points out that many TMCs offer VIP services, such as calling a hotel to secure an upgrade or making ground transportation arrangements. These services could, says Koetting, appeal to travellers looking for agency service “on demand”.
CONSOLIDATION
ATPI’S ADAM KNIGHTS EXPECTS CONSOLIDATION in the marketplace to pick up pace, with progressive TMCs predicted to be most active. Whether or not any of the major global TMCs will merge, in a deal reminiscent of American Express and Rosenbluth in 2003, is less likely, though Knights says “it can’t be ruled out”. Ken McLeod of the Advantage Travel Partnership agrees that market conditions currently lend themselves to consolidation. However, he believes that over the coming years the industry is likely to see more TMC alliances and partnerships formed. Groups such as Globalstar, Radius and the Win Travel Network will grow, he says, because they enable TMCs to “integrate products, enhance cooperation on the ground and enable ticketing and account management to be carried out in a more effective way”.
“Today a corporate has to have a formal defined relationship with an agency,” he says. “Wouldn’t it be great if the agency could offer services to a variety of smaller companies who can’t afford to use one for every trip but could take advantage on certain occasions? It would be a truly on-demand service. Or if you are a new traveller going somewhere for the first time, you may want to buy individual services.” The future TMC, says Koetting, will be the best friend of the traveller.” On that note, there is perhaps a message for buyers who are not familiar with the Rocky movies. The champ’s best friend, Apollo Creed, was once the undisputed heavyweight champion of the world. He was complacent, lived in the past and ignored threats posed by new challengers. Unsurprisingly, Ivan Drago killed him in the ring. Let that be a warning to you.
70 BBT MARCH/APRIL 2015 1 BBT NOVEMBER/DECEMBER 2014
BUYINGBUSINESSTRAVEL.COM
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