BBT evaluates the different ways in which small- to medium-sized enterprises manage their travel
It is often said that in the world of very large business travel accounts in the UK, there are a few thousand that regularly change hands between TMCs. The vast majority of accounts, however, are small- to medium-sized enterprises (SMEs). There are many different definitions of what makes an SME, but it is largely based on turnover, assets and number of employees.
Generally speaking, an SME will have fewer than 250 employees and a turnover of less than £25.9 million. However, TMCs often base their definition of what they consider small on overall travel spend.
However you define an SME, the fact is that they dominate the business landscape in the UK, making up more than 99 per cent of all companies. Collectively they are often described as ‘the engine room of the economy, generating much of the country’s new jobs. Yet how should SMEs handle their business travel?
The online, unmanaged way
Max Wiseberg has suffered from hayfever all his life and had tried every remedy under the sun. He was then introduced to a balm that could be rubbed around the nose and eyes and used as a pollen barrier. It worked and he liked it so much he bought the rights to the product.
The company now manufactures, markets and distributes the balm, under the name Haymax, as an organic, drug-free allergen barrier balm for hayfever sufferers. The company employs four people at its farm in Bedfordshire. “We have more recently been working on exporting Haymax, and have distributors in several countries, adding Spain and US this year,” says Wiseberg. “Which is why we have to do more travelling.”
The company then began looking more closely at overseas markets and joined the UK Trade and Investment’s (UKTI ) Passport to Export programme, and the past year has been very busy. In 2015, Haymax won a coveted place on a small business trade mission to Atlanta, organised by The Guardian newspaper in association with UKTI and UPS.
“I am still reaping the benefits of that trade mission,” says Wiseberg. “And this year, we have been to the US, Spain and France, and we are planning trips to Portugal and Switzerland.”
He and his business partner book their business travel themselves, spending a few thousand pounds a year, and go online to find the cheapest prices, either direct to airline websites or through online travel agencies such as booking.com.
“We go for the cheapest we can find, whether that’s Easyjet, Ryanair, Wizzair, Virgin or BA,” he says. “We spend a zillion hours trying to find cheaper prices. You can never be certain you’ve got the best price.”
• No transaction or other TMC fees.
• The ability to book whatever you want.
• Can take advantage of web and other special offer rates.
• No tracking of spend.
• Management time spent on search.
• Negotiated rates inaccessible.
Using an online TMC
By Egencia’s definition, the SME label covers those businesses that spend between £500,000 and £1.5 million a year on travel. Clothing retailer Ted Baker is one such company. The firm started life in 1988 as a men’s shirt specialist in Glasgow but has since expanded into other types of clothing and accessories, both for men and women.
When the company expanded by opening shops in North America it was looking for global consistency in its travel programme, and chose Egencia to create a system that could manage complex, multiple-destination bookings and handle these both on and offline.
The company has used Egencia as its TMC since 2006 and around 80 per cent of its spend is air travel to the US, China and Hong Kong, with some domestic air travel. The remaining 20 per cent is spent on hotel and rail. There are some 100 bookers who use the booking tool and offline service.
Ted Baker’s business travel consists of complex international bookings, that can be time-consuming and difficult to fulfil. Egencia provided Ted Baker with a dedicated customer service team that is reliable and familiar with their travel programme and needs.
“Ted Baker’s busy business support team is able to turn to Egencia customer service for any complex or unfamiliar bookings in multiple destinations,” says Egencia senior marketing manager Adrian Whitcombe. “This helps alleviate workload and allows them to focus on other aspects of their roles, leaving the trip logistics to Egencia’s service team.”
Meanwhile, Egencia’s online booking tool is available for travellers to make less complex bookings, which saves cost, says Whitcombe. Egencia carried out a full analysis of Ted Baker’s air programme, and recommended improvements and new contracting opportunities.
“The account manager’s proactive approach and close working relationship with Ted Baker’s travel director resulted in successful corporate airline deals,” says Whitcombe. “Ted Baker was able to save on air fares on their most-used routes.”
Laura Kelly, Ted Baker’s business support manager, adds: “Knowing Egencia is working on our behalf in the background gives us peace of mind.”
• Lower fees.
• Access to preferred supplier rates.
• Easily scalable as company grows.
• Transaction and other fees payable.
• Harder to book complicated itineraries via online tools.
• Full TMC service usually chargeable.
Using a specialist TMC
Digital advertising asset management company Adstream was set up by Australian entrepreneurs in 2001 and now has 42 offices in 30 countries, including London, Sydney and Kuala Lumpur. In the UK, Adstream has 195 employees, of which the majority of the management team are required to travel.
Emma-Jane Bentley is Adstream’s executive assistant to the CEO, CFO and commercial director, and based in London. “My guys are always travelling, mainly to the US, Asia and Australia,” she says. “Adstream’s account managers often do a lot of UK and European travel to clients.
“When I joined, Adstream was using a travel agency in London and having problems in terms of billing and customer service. Along with our CFO, we consulted a number of providers with a key requirement to shy away from the big global TMCs, to make sure we had that personal touch.”
After a competitive pitch, Adstream appointed Corporate Traveller in 2015 to handle travel in the UK and Australia. With more point-to-point travel, Australia is serviced online. In the UK it is mainly phone-based (plus an online tool for simple bookings).
“Our directors do a lot of multi-stop trips,” says Bentley. “By getting someone to tailor the bookings, you sometimes get better deals you wouldn’t get from an online system.”
Travel for both regions is billed to a central account, with hotel bills handled through billback. Adstream uses Concur for its expense management but the system is not integrated with travel bookings. It allows use of Uber, with expenses via Concur, but doesn’t use Airbnb.
“We get good corporate rates in major cities – London, New York, Kuala Lumpur and Sydney – and our travellers prefer to stay in a nice hotel,” says Bentley.
Adstream has a monthly review meeting with its dedicated Corporate Traveller account manager to go over regular reports on top spenders, trends and missed savings. Bentley says working with Corporate Traveller has really sorted out the account management issues they were having previously. “It’s like having someone in-house,” she says.
• Access to TMC expertise but without the cost of a traditional TMC.
• Potential to transition easily to full TMC service as company grows.
• Access to preferred supplier rates.
• Choice may be limited depending on the TMC’s relationships with suppliers.
• SMEs have to pay transaction fees which may be higher than other options.
• Potentially taking second place to higher spending clients of a TMC.
Founder Petko Plachkov talks about being the ‘Netflix of commuting’ and how the start-up travels:
What is Commuter Club?
My friend Imran Gulamhuseinwala and I founded Commuter Club (commuterclub.co.uk) in 2014. We were both living in London and, given the high cost of commuting there, had been looking for ways to lower our travel expenses. We realised that annual season tickets could provide savings of over £200 a year compared to using pay-as-you-go, or weekly and monthly travel cards, but the drawback was the big upfront commitment.
We set about changing the system by allowing commuters to pay for their commute via direct debit. We are able to deliver the savings of annual season tickets in a much more appealing format, and one that can be stopped at any time. Think of us as the Netflix for commuting. We also make it easy for companies to offer their staff season tickets as an employee benefit. We launched nationally in 2015 and also launched our corporate offering in early 2016. We expect to process over £20 million in tickets this year.
What kind of travel do you do for business?
I primarily travel in London but also across the UK. While I always try to use the Tube, sometimes Uber is just great for trips around town as it means you can do calls and stay productive. I use the train a lot – it’s the best time to get on top of emails and catch up on ‘thinking work’.
How do you book your travel?
I prefer to book my work travel myself, so I know what I am doing and can access the best deals. I often use sites like Thetrainline.com.
Do you use ‘sharing economy’ sites?
Sites like Airbnb and Uber have truly revolutionised the way we travel and not only do we regularly use them, but as a business we’re inspired by how they innovate and operate. My ambition one day is for Commuter Club to work with the likes of Uber, so that we can offer our commuters a complete end-to-end travel solution.