TMCs
company and wants to bring in the TMC they have worked with before to their new organisation. For larger multinational organisations, the drive to work with a single global TMC across the world can be a major incentive to make a change. Jo Hillman, CWT’s senior director, sales UK and Ireland, says: “One driver is to find a global or multi- national TMC because a company wants to consolidate across more than one country and its TMC only has a local presence. It wants to consolidate from an efficiency point of view.” Ben Park, senior director procurement and travel at
Parexel, agrees many buyers in multinational companies are now looking to move to a global TMC rather than using a range of local agencies. “The other reason is that buyers are not satisfied with the value offered and they are not getting as much flexi- bility from their current TMC. Some see their incumbent TMC not keeping up with new technology implemen- tations and others see the flexibility and customisation options getting less and less, as well as the personal touch getting lost,” adds Park. The technology offered by TMCs is regularly criticised
by travel buyers for failing to match up to the kind of ser- vices available for booking leisure travel. This is an area where TMCs are striving hard to catch up but technology often comes up as a reason for switching. “Most client moves are now predicated on a desire for improved technology solutions,” says Adam Knights, re- gional managing director for UK, France and Benelux at ATPI. “Most of our new client wins recently have involved a move by the client from their existing technology solu- tions to newer more traveller-centric tools.” One UK-based buyer adds: “Technology was one of the main reasons why we switched TMC – the booking
tool wasn’t great and travellers were always moaning about it. The new TMC’s tool is better, although there’s still work to be done to improve it further.”
WHAT TO CONSIDER The transaction fees charged by TMCs have long been a bugbear of buyers, so if the primary reason for switching agencies is to save money then it may be tempting to focus most attention in this area. Although securing the lowest (or even zero) transaction fees is not necessarily the best deal for the buyer. Yvonne Moya, principal at consultancy Festive Road,
says: “While concentrating only on the fees, they are just a small portion of the overall costs. Maybe the new agency cannot deliver the same content as the old partner. Maybe their approach to account manage- ment is different and now there are costs for reporting. Maybe there are fees for using certain technologies.” One practical example where buyers can be
WHY COMPANIES LEAVE THEIR TMCs
The most common reasons for an organisation to change their TMC:
PRICE – while getting a cheaper (or better value) deal from a new TMC is still a priority, this is no longer simply about getting the lowest headline transaction fee but taking a holistic view of all fees and charges.
TECHNOLOGY – buyers have long grum- bled about the quality of TMC technology and it is becoming a more important element of the RFP process. Overall TMCs are responding.
SERVICE – while there is an inevitable rush to push the majority of travel book-
buyingbusinesstravel.com
ings and processing online to reduce costs, buyers are still looking for good quality personal service from their TMC.
PROCUREMENT RULES – governments, public sector organisations and some large corporations have strict rules about going through RFP processes every few years (generally three to five years), although this doesn’t necessarily mean they will leave their incumbent TMC.
GOING GLOBAL – large corporations with a worldwide footprint are increas- ingly looking for one TMC to service all locations and provide a more manageable experience than working with many local agencies.
2019 MARCH/APRIL 93
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