Special reports » 

Managing your travel

Published: 01/12/2005 - Filed under: Archive » 2005 » December 2005/January 2006 » Special reports » Features » Special Reports »

• Print
• Send

According to Carlson Wagonlit Travel, hotel accommodation makes up 30 to 40 per cent of a company's travel spend (with airlines making up much of the rest). So if you're using a travel management company, or thinking of doing so, what can they do for you when it comes to booking your hotel and what, exactly, is the nature of the relationship between TMCs and hotels?

Matthew Roberts, head of business sales, Hilton UK & Ireland puts it succinctly: "Travel management companies are consolidators, and communicate to new markets as well as existing ones, generating awareness of the brand and loyalty among travellers."

Stephen Powell, senior vice president of sales and marketing, EMEA for Intercontinental Hotel Group (IHG) adds: "From our point of view the agents are a fantastic distribution channel and a distribution partner. It's a delicate balance – we all need one another."

As for how the TMCs view the relationship, Mike Platt, managing director of BTI, which takes over 200 million hotel bookings a year, says: "We are married with the supplier's interest and of course we are a major source of business to them too."

To take a specific example, IHG has strong partnerships with several TMCs – including American Express, Carlson Wagonlit, BTI and TQ3 – but what do these different relationships mean for the end user, the business traveller? While policies may vary among the TMCs, the price you pay is fairly constant, says Stephen Powell. "Business travellers and hence their corporations can book directly with us or through a TMC. It is about whatever model suits them and we'll sit with either."

Historically TMCs have had a much stronger association with airlines than hotels, but as the pricing models have changed and airlines no longer pay commission, the emphasis has shifted to the accommodation side. When hotels were struggling to fill their rooms post-9/11, the TMCs had a relatively easy time negotiating with them, but matters have changed recently with many hotel companies operating a best-rate guarantee.

"The hoteliers have actually got their act together a lot more on the pricing channels, and now when a customer goes to book, the prices are all the same," says Mike Mannix, director of CWT Hotel Solutions Group.

According to the hotels, TMCs have welcomed best-rate guarantees. Why? "Because there is no reason for anyone to book direct when it is always the same price," says John Licence, vice president for global sales for Marriott Europe.

But you could also use the opposite argument – after all, if a hotel chain's own website offers a best rate, why would you use a TMC to book your room?

Lionel Burgell, hotel manager of Navigant Europe, which takes over 80,000 hotel bookings a year in the UK, explains: "The argument on the corporate side is why should I pay a fee when I book though a TMC? But we provide much more than the booking process like management information, security and we can negotiate deals on behalf of the corporate."

If you are already using a TMC to book your airline ticket it makes financial sense to use them for the hotel too, as it usually won't cost you any more. And of course if you are a larger corporate, you should also save on the room cost. While individual travellers can benefit from schemes such as Marriott's "Look no further" price guarantee – where the price they see on the website is the cheapest rate publicly available – TMCs are able to use their influence to negotiate further discounts – or upgrades and extras for their larger corporate clients.

Chris Crowley, head of sales for The Travel Company/Synergi, says: "If you do book it yourself then of course you can get deals directly, but those deals are never as good as the ones from a TMC."

The TMCs also point out that if you make the decision to go it alone, you won't have any back-up if there are problems with your booking, and this is where a TMC can come in very handy.

Says Crowley: "You have to remember that there are other benefits of using a TMC pre- and post-booking. If there is a complaint and you have booked [with us] we can turn round to a global company and have some clout, but an individual may struggle to get a response."

Mike Platt says: "Of course you can still book direct if there is a point in doing it, but we use buying power and get rooms everywhere, and then we go out and negotiate the rates with large companies. In this sense we don't work with the hotels really; we work for the traveller as a one-stop shop. Our job is to keep making ourselves attractive."

The personal touch of the TMC "working" for the traveller also works the other way. Mike Mannix says: "We found that only 18 per cent of hotels are booked through travel agencies. This is to do with the fact that, out of the traveller's desire and habit, they go directly to their preferred hotel or to their local office who will sort it out."

Although being loyal to a hotel group offers wider benefits through schemes and rewards, Mike Platt doesn't think this affects the business traveller's relationship with TMCs. "Corporate deals and air loyalty schemes are not really doing any damage to TMCs; they just attract people to particular airlines or hotels. There is no change in how people book – just which hotel they book."

Ultimately the hotels are happy for their customers to use whichever route suits them. John Licence says: "There's no reason why anyone should be afraid of booking through any channel for Marriott. We want people to book direct, book though TMCs and through GDS – they can book any way they like because our rate will be the same and this makes people comfortable."

Currently the relationship seems to be helping the business traveller, but what of the future of hotels and TMCs? Lionel Burgell is positive. "I think the relationship is here to stay and hotels chains are still happy to pay commissions to the TMC – unlike the airlines."

Contacts

Hilton hilton.com
Intercontinental ichotelsgroup.com
Marriott marriott.com
BTI tel +44 (0)1252 372 000; bti.co.uk
Navigant International tel +44 (0)1442 847 525; navigant.com
Carlson Wagonlit tel +44 (0)1707 667 788; carlsonwagonlit.com
The Travel Company tel +44 (0)20 7262 5040; thetravel.co.uk

ADD A COMMENT »