How much value does a TMC provide your business? It’s a question that comes up time and time again at business travel events, conferences and forums.
Adam Knights is managing director for the UK at The ATPI Group and he looks to address this much debated issue:
The value that a TMC brings to any business is a much repeated debate, and one that I enjoy. It gives me a chance to help people understand how TMCs perform, add intelligence and aid businesses in being more efficient. I thought I could answer the argument well, until recently.
Buried within a client account management report that I was reading through this week was data that gives a really strong and robust voice to any TMC.
Like most professional services businesses we are charged by our clients to deliver cost savings. That means we report regularly on how we have met various objectives, including the financial elements. Many of our clients – as is commonplace for a TMC – also negotiate their own route deals directly with airlines. The piece of information that really struck me about the report I read recently was that out of all the savings delivered, just one per cent of them came from these route deals.
One per cent
The TMC delivered 99 per cent of all other savings on travel costs.
But surely that’s what you would expect? The TMC is the sector expert, the negotiator, the travel management professional. And yet many businesses are spending time and effort negotiating their own route deals, for what is very little return.
When I talk to travel buyers and procurement professionals there is a realisation of the importance of exploring many different channels, and of the TMC being just one option for negotiating travel deals. And if the deals garnered directly with travel suppliers such as airlines can work for that business, then as an advisor I’m all for helping a client find the route that works for their individual circumstances.
I’m not claiming that the client-negotiated route deals only representing one per cent of the overall travel savings on this example is the case across every client of every TMC. But even when taken as an extreme, it points starkly to a trend that shouldn’t be ignored.
There is a reality that airlines and TMCs work very well together, that we continue to evolve and innovate to deliver what business travel buyers, and the travellers themselves, want to see. Maybe this trend is evidence to suggest that the airlines in fact offer their greatest deals to the TMCs. I know I would claim to be a strong distribution partner to any airline, and therefore this shouldn’t be a surprise to me.
After being presented with the data that showed our business delivered 99 per cent of all the savings achieved in travel bookings for a large organisation, it is a trend I’ve seen across our client portfolio.
‘Long-term tangible benefits’
I don’t believe that the value of a TMC is just financial. The future of our sector is not about being a commodity. But delivering cost savings are rightly a reality of doing business. I’m 100 per cent confident that the right TMC partner can deliver many, many long term tangible benefits to any business, and more than half of it won’t even be about cost.
Innovative businesses breed success. I’m thrilled that I’m in a sector that despite monumental changes in travel booking behaviour, and even capability, continues to prove its worth, relevance and imperativeness every day, with every booking.