As the recession ends, now could be a prime time to use a travel management company, says Sara Turner
Travel management companies (TMCs) are used to adapting to changing circumstances, but the past 18 months have been particularly hard for them. Not only has the volume of business travel being booked dropped, but as budgets have been squeezed, companies have looked for ways of making their travel expenditure go further. For some, that meant getting rid of their TMC and moving their procurement in-house.
So now things have – whisper it – started to improve, should those who have been surfing the web for the best deals return to letting the professionals do it? And how do TMCs justify the “management” fees they charge?
Knowledge
TMCs say they can tell you the best way to get from A to B, whether by air or rail, and advise you on the best hotel for your needs, including factors such as location and facilities. Whether this is true or not largely depends on (a) how much you know and (b) how much your adviser knows, although there’s little doubt that you can save considerable time if you pass the research to an external party. Most of us are quite capable of booking point-to-point travel and a hotel, but complicated multi-itinerary trips are more labour intensive.
In addition, TMCs know how and when to book. Stewart Harvey, client management director for Hogg Robinson Group (HRG) says: “There’s a sweet spot [for booking]. If you do it too close to departure the price is too high, and if you book too far in advance, the price is low but there are strings attached.” Cheaper air fares are often inflexible, and the further ahead you book, the more likely it is you will need to change your plans.
“Between eight and 12 days in advance is best for air fares,” Harvey says, “but for hotels the opposite is true [as bookings are best made at the last minute].”
Savings
TMCs also argue they can provide increased savings, as they are buying flights and hotel rooms for many clients so can negotiate better rates. Again, this is sometimes true, but perhaps not always. The events of the past few months have seen low demand for flights and hotels, and many negotiated rates have been ignored as travel suppliers were forced to discount.
In addition, low-cost carriers such as Ryanair and Easyjet offer their lowest prices via their websites, and often a TMC will charge a fee on top of the price.
Help on the road
When you are travelling, sorting out your own arrangements becomes much more difficult. You aren’t sitting at your desk all day with a laptop and a good internet connection, and without someone to phone who can check flight availability or hotel rooms, the savings you thought you were making by looking after your own travel can soon disappear. TMCs can obviously help here, since if your flight is cancelled, for example, they have 24-hour call centres to rebook you on the spot and help get you on the move again.
The recent British Airways strike is held up by TMCs as an example of how they can make travellers’ lives simpler. Andrew Burch, business development manager at Hillgate Travel, says: “BA did its best to keep all TMCs informed. It could rely on us to manage [the effects of the strike] on our travellers’ behalf, providing us with up-to-date information, timetables and everything else we needed.”
Hillgate Travel was able to rebook its business travellers on to different airlines. “A benefit of having a TMC in this situation is that if you as an individual want to rebook, that’s another charge on your credit card. We can hold seats on our system – if you want it, you get it, but if the strike is cancelled and you want your original ticket, you don’t pay,” he explains.
The same principle applies when bad weather hits. For example, you may wake up to fog early one morning and reach Heathrow only to find your plane is still in Frankfurt and you’re going nowhere. Not so for those with a TMC, says Burch. “[In such instances] our out-of-hours team would be calling people direct to say ‘don’t bother leaving home’. The biggest problem we hit on a daily basis is the weather.”
Security
TMCs can therefore be good to have around in a crisis. As they will have booked on your behalf and have the details in their database, when something happens in a particular city, they will know you’re there – so while your company might not know which hotel you’re in, they will. Burch uses the example of one of his clients, who was in Mumbai when the terrorist attacks happened in 2008. “The first phone call he had was from us,” he says.
Corporate kudos
Surprisingly, TMCs also say they can give you a little borrowed kudos. Burch says: “That ‘Do you know who I am?’ line carries more weight if you’ve got one behind you, than if you’re just a person who has paid on a credit card. Aligning yourself with a travel management company is what the sensible business traveller would do, simply because of the insurance it provides.”
Management information
This is where there’s little doubt travel management companies are useful, as anyone in your procurement department will tell you. By booking through a TMC, your company will know exactly how and where you’re spending your money. “That means looking at much more than just travel spend,” says Nigel Turner, director of public sector and industry affairs UK at Carlson Wagonlit Travel (CWT). “It’s looking at the procurement of it all.” In other words, scrutinising your travel policy to work out the best way of doing things, and reporting back on whether it’s working – has everyone booked within the agreed policy? If not, why not, and does it need changing?
Technology
More and more, TMCs are focusing on the particular needs of the traveller, whether it’s self-booking tools on mobile devices, automated approval systems if you need to get the okay from your line manager, or even help with claiming back expenses. Turner from CWT says: “There’s been a lot of technology out there for organisations but the traveller has often been the one who hasn’t had everything they’ve wanted and their experience has perhaps been forgotten.” CWT has introduced an online itinerary that is more user-friendly and interactive, allowing travellers to receive information in the way they want and add additional services.
Small companies are also a growing focus. While large corporates mean big accounts for TMCs, Mark Douglas, UK head of sales for American Express, believes it is smaller firms that will lead the UK out of the recession, a factor in its decision to launch Axcent, a phone and web booking service designed for the SME market. Other products include Simply HRG, which offers smaller firms phone and online bookings and 24/7 emergency support, and CWT Connect Now, an online booking solution for SMEs to make simple point-to-point bookings.
Choosing a TMC
So which travel management company should you go for? According to Simone Buckley, co-founder and director of travel programme optimisation at consultancy Bouda, the biggest ones won’t necessarily be the best for your needs. “I don’t think a TMC’s size is relevant,” she says. “What’s important is that you find the one that gets the best fares for your destinations. Don’t presume that because it’s a big firm they will get the cheapest rate for the cities you frequently go to.”
Travel policy compliance
A final word to travellers who might be tempted to book outside their company’s travel policy – don’t. While you may think the online fare is going to be cheaper or will match anything your TMC can find, by booking it yourself you’re diminishing your company’s buying power and wasting the time that has gone into negotiating rates. Plus, if something goes wrong, you may be left high and dry, which will cost you more in both time and money.
