This week BTE reports from Carlson Wagonlit Travel’s international press briefing in Minneapolis, from the Management Solutions/ACTE conference in London and on the decision of two travel management companies to absorb the BA surcharge.
This last decision by HRG and Capita Business Travel goes against what many would regard as if not sound commercial sense than as least custom and practice.
It has seemed forever and a day that companies incurring costs in the course of business pass them on routinely to their customers. This certainly has been the case in travel.
For HRG and Capita to buck this trend shows an element of bravado. It is a strategy fraught with difficulties.
How long will it last? How much will it cost? How long can either TMC bear these costs if other costs start to rise as well? What, if at the end of these particular BA-GDS deals, BA manages to impose a larger surcharge – will any Travel Management Company: An agency which manages business travel for a company. be able to absorb it then?
And if HRG and Capita decide then to pass it on, it will be a larger blow to their clients than for those with TMCs which had already passed on a section of it first time round.
But the other side of the coin is that this decision will win HRG and Capita good standing with their clients – which is probably the motivating reason for doing it – and possibly attract new customers from among those already paying the surcharge with another Travel Management Company: An agency which manages business travel for a company..
It may make more commercial sense than at first it seems but there is the element of a gamble about it.
But corporates are likely to applaud anyone who can control their costs for them.
Business Travel Europe