UK’s 50 top TMCs
Mark Frary introduces BBT’s annual guide to the UK’s leading travel management companies
economies of the UK and US. Business travel depends on economic growth. In 2017, the UK economy grew, but not as fast as in previous years. Growth for the year was just 1.7 per cent, but fourth quarter GDP growth was a healthy 0.4 per cent. The annual figure compares with 2 per cent in 2016, 2.2 per cent in 2015 and 2.9 per cent in 2014. Brexit and fears of a trade war seemed to be inhibiting factors. Despite Brexit, Toyota announced it
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would build its next generation Auris in the UK at the Burnaston site, while AstraZeneca announced a significant investment in its Macclesfield plant. Qatar – already a big investor in the UK – announced £5 billion in new money in the areas of transport, property and digital technology. For aviation, 2017 was a good year.
IATA announced that demand (revenue passenger kilometres or RPKs) for 2017 rose by 7.6% compared with 2016, well above the ten-year average annual growth rate of 5.5 per cent. Planes were fuller too – load factor climbed 0.9 of a percentage point to a record high of 81.4 per cent. TMCs responded to aviation’s record
2017 and a return to economic health with good figures, as shown in this year’s leading 50 TMCs ranking. However, despite good results, the trend towards TMC consolidation continued and showed no signs of slowing down. In May last year, US agency Travel and
Transport purchased Statesman Travel, continuing its European expansion and creating a group with global sales of US$3.5 billion and 1,600 employees.
88 BBT May/June 2018
AST YEAR IT LOOKED AS THOUGH THE global economy had turned a corner after a decade of recession and poor growth, at least in the
The same month, Capita Travel and
Events added NYS Corporate to the long list of acquisitions it has made in previous years. Travel Leaders Group had a busy year,
buying luxury specialist Colletts Travel in February before merging with Altour International in the summer. As the year came to a close, Gray Dawes continued on its own acquisition streak by snapping up CTM. Technology continues to be a key
differentiator, and investment in new technology-enabled products and services continues apace. More TMCs are investing in booking technologies that aggregate content from a wider range of sources, with many adding the capability to source New Distribution Capability (NDC) content. TMCs are also putting more resources
into delivering apps that enable travellers and travel managers to book and rebook on their mobiles just as they do on their desktops. Powerful MI and data analysis tools are also becoming more commonplace. The distribution and technology
landscape is changing rapidly, but TMCs that embrace this change will be well set for the future.
OUR SNAPSHOT SURVEY Each year, we ask our surveyed TMCs for their views on the state of the market and the year ahead. Their aggregated answers are shown in the charts (see p91). TMCs are feeling more positive about
2018. Last year, one in nine expected growth of 5 per cent or less; this year that figure has dropped to one in twelve. More than half of TMCs are expecting turnover growth of more than 10 per cent in 2017. Two-thirds of TMCs expect this growth to
come from new customers. Many are hoping their clients will spend more on business
travel in 2018, while some believe growth will come from selling extra products and services to existing clients. Almost every TMC we surveyed said winning new business was a priority. However, three-quarters of those asked also said they were focused on improving their product and service offerings during the year. A significant number said they were looking at winning new business in areas outside transient business travel, such as meetings & events and executive leisure. Reflecting the general state of the market, one-third of TMCs responding to this question said they were looking at mergers and acquisitions – the highest proportion in the history of this survey. We again asked our respondents on what
fee basis they charged clients. Every TMC in our survey charges some of its clients on a transaction fee basis, and the proportion of all transactions for all TMCs that answered this question stands at 91.1 per cent. Half of respondents said they were remunerated on a management fee basis on some of their business, down from three-quarters of TMCs that worked in this way in 2016. Each year, we ask TMCs in our survey
about their biggest concerns for the year ahead. Concerns about direct booking with suppliers and the effect of the introduction of IATA’s NDC are clearly keeping TMC bosses awake at night. With more TMCs implementing NDC-capable booking tools and GDSs beginning to look at wider adoption, this is likely to continue. Increased competition is also an issue. One-third of TMCs replied to say they are worried about undercutting by rivals and low margins. TMCs continue to be concerned about recruiting skilled staff. Some are growing academy programmes to develop staff skills as a result.
BUYINGBUSINESSTRAVEL.COM
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