Arranging business travel can be extremely
time-consuming, not to mention stressful if plans go awry. Travel management companies can ease the burden – but at a price
H
ow much time have you spent booking or rearranging business trips over the last year? Have your travel plans been severely disrupted by
bad weather, natural disasters, industrial disputes or even acts of terrorism? These are questions that travel management companies (TMCs) ask when trying to persuade the business traveller to use them to manage their travel requirements. A decade ago, TMCs used to be known as business travel agencies. These days, TMC services extend into areas such as data reporting and analysis, expense management, consultancy, meetings and events management, traveller tracking (allowing companies to monitor where employees are) and creating bespoke technology such as online booking tools. Yet despite this diversification of services in recent years, arranging and booking travel is the bulk of what a TMC does.
Benson Tang, regional director, Asia, for the Association of Corporate Travel Executives (ACTE), says: “In an increasingly complex business environment, corporates are no longer looking for TMCs to simply fulfil jobs as an ordinary booking agent. It is critical to have TMCs that offer full-scale services.”
WHY USE A TMC?
Tang identifies four main areas that TMCs can provide assistance to businesses: providing consultation on how to perfect their travel management processes; optimising costs to better reflect changing traveller behaviour based on firm data; proactively providing analysis and meaningful data during a company’s request for proposal (RFP) process; and enhancing traveller satisfaction within the company’s cost framework.
Lyndsey Atkins, marketing director for bus ine s s tr a v el ler .c om
Reed & Mackay, adds: “Business travellers are often [relatively] poor. A TMC brings value by providing both cost savings and an increased level of comfort and ease, allowing the traveller to focus on work or get some rest.
“Whether this comes in the form of the right seat on the plane, travel alerts or emergency assistance out of working hours, knowing that you have an experienced individual ready to help you makes a big difference to our travellers.” Jo Sully, vice president and regional general manager, Australia, New Zealand and Southeast Asia for American Express Global Business Travel (GBT), agrees, adding: “TMCs possess technology and tools to simplify the booking and travel process and can provide the ability to track and communicate with
travellers during times of distress. Such support can significantly improve traveller peace of mind.” If you’re considering using a TMC, the most immediate questions might be: how much is it going to
cost, and how am I going to be charged? These days, most TMCs – whether they are large or small – use transaction fees, a set of fixed rates added to every travel booking at the time of the transaction, as a way of charging for their services. A rule of thumb is that these transaction fees will be between 2 and 5 per cent of an organisation’s total spending on travel, but this depends on the level of service agreed with the TMC.
Generally, if you are booking the majority of your travel through a TMC’s automated online booking tool, the costs
will be at the lower end of this scale. But if you prefer to make your bookings by speaking to the TMC’s consultants, known as offline bookings, then the fees will come in at a higher level. It’s also worth noting that the transaction fee can vary depending on whether it is an air, rail or hotel booking.
Knowing you have an experienced individual ready to help you makes a big difference to our travellers
SPENDING TO SAVE But what do you get for spending this extra money on fees? All TMCs claim that they can get significantly lower rates through their deals with preferred airlines, hotels and other suppliers than are available on the consumer market.
American Express GBT’s Sully says: “We’ve seen instances where mid-sized companies in Australia have saved close to A$300,000 [US$217,270] through engaging a TMC. Through our data and insights, we’re able to assist companies in numerous areas that drive cost savings including travel negotiations, helping to change booking behaviour and increasing company-wide travel policy compliance.”
ACTE’s Tang adds: “Nowadays, leading TMCs not only bring cost savings in travel products – air tickets, hotel rooms and so on – to the table, they can provide 360-degree savings through the use of artificial intelligence and online booking tools, as well as when it comes to administrative cost saving such as payment and reimbursement time.”
TMCs also point out that not all airfares and hotel rates are created equal: many of the cheapest public prices are “unbundled” with restrictions such as no changes allowed to flights, or hotel rooms without complimentary breakfast or wifi.
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