TMCs BY MARTIN FERGUSON
EVOLUTIONARY THINKING
AT THE BUSINESS TRAVEL SHOW BACK IN 2008, the managing director of a hotel booking agency made a keynote speech. He predicted travel management com- panies (TMCs) risked oblivion if they failed to adapt their business models. At the time, technology advancements were starting to influence procurement and booking. Change was afoot, and there was an air of exciting uncertainty. However, the executive was widely criticised. His rhetoric was considered gratuitously provocative, designed only to promote specialist agencies such as his own. But Grant Appleton did, to a certain extent, have a point; it’s just that it was relevant to any business in the corporate travel supply chain, not just TMCs. Adapt or die, was regularly the cry. What he ne- glected to mention was that sustainable evolution had always been a core strength of the travel management community. As is often recalled in the pages of this magazine, TMCs (when they were more commonly known as business travel agents) had the carpet pulled from under their feet nearly 20 years ago when British Airways (and eventually others) announced it would stop paying agency commission in the UK. They’ve been in a state of constant development ever since. The present era is no different: cor- porate procurement departments, travel
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buyers and travel managers still encounter challenges around control, compliance, technology and pressure to drive down costs. But how is the relationship between corporates and TMCs changing in the modern age?
PERIOD OF CHANGE TMCs, according to one industry veteran, support their customers in three main areas: security; compliance to policy; and savings. Nigel Turner, a senior director at Carlson Wagonlit Travel (CWT), says: “More than ever before, the TMC’s ability to be an outsourced point-of-control, reporting and support function in addition to a booking service is highly valued.” And no fair-minded buyer would disagree. Buyers and programme managers also find themselves in a period of change. Claire Marsden is senior supply chain manager for Sodexo, and manages travel for one of its large external clients. Her contention is that travel programmes are now under intense scrutiny from internal stakeholders, such as chief financial of- ficers. There is, she believes, more emphasis on the total cost of a trip rather than the price of an individual booking. “The total cost and scope of travel has increased,” she says. “It used to be about pounds and pence, but now we have a much wider
Travel management companies have always needed to be quick to adapt to change – now more than ever, given the industry’s current rate of evolution
cost perspective: duty-of-care, corporate governance, employee well-being and other legal implications.” She adds: “The costs covering all these
areas can be incredibly high to a business, not just in pure terms, but in terms of risk and adverse publicity. The TMC relation- ship plays a significant role assisting clients with duty-of-care and traveller tracking, as their systems are far more robust than any internal systems or processes.”
MOVE WITH THE TIMES It is these extra responsibilities that allow TMCs to retain a central role. That’s not to say every one comes equipped to help. Mervyn Williamson, joint managing director of Statesman Travel, says only those investing in future models will prevail. “TMC’s have long occupied the middle ground between OTAs [online travel agents], independent procurement consultants and financial analysts,” he says. “Those moving with the times are building as seamless a booking process as possible, while using data and insight to provide actionable advice to help buyers make the important decisions.” But even that’s not enough, says the London-based entrepreneur. The TMC, he insists, needs to make those changes happen, whether through communication, education or “a dash of ingenuity”.
BBT MARCH/APRIL 2016 57
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