18 I THE BUSINESS TRAVEL MAGAZINE

Feature: Travel Management Companies

22 I THE BUSINESS TRAVEL MAGAZINE

oN THEbuttonIn our annual examination of travel management companies, Andy Hoskins takes a look at how TMCs and their clients are adapting to a new economic environment

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Feature: Travel Management Companies

www.THEBUSINESSTRAVELMAG.coM I 23

EyjAfjAllAjoEkull – few can spell it, even less can pronounce it and, until April 14th, hardly anyone in the UK had even heard of it. That quickly changed when the distant volcano belched into action, spewing ash high into the atmosphere to drift slowly over Europe and, perversely, give travel management companies the chance to shine.

Who would have thought that such an apparently innocent geological bi-product could cause such widespread bedlam across Europe’s airspace? By now we’ll know the extent of the damage to the economy, the already battered aviation industry and the stress levels of hardened road warriors stranded overseas, but at the time of writing, TMCs are pulling out all the stops and, one suspects, revelling in the opportunity to prove right that wearily repeated mantra, ‘we are more than a booking agency.’

And it’s true, the UK’s TMCs have reacted quickly to their clients’ needs, re-booking travellers where possible or finding them

alternative methods of travel or reserving accommodation for them.

“You don’t value a service until you use it,” said HRG’s Ian Windsor,

managing director UK, on the day this country and much of Europe’s airspace was shut down.

“Some people question the cost of TMCs but on days like

today a TMC pays for itself tenfold. I have sympathy for those

that have booked travel indepen-dently but as a TMC I’m obviously

going to say we’re the best choice. If you’re a traveller on your

own today, and you’ve made all your bookings on your own, what are you going to do? Who do you go to?”

Greg Fieldgate, head of account management at FCm Travel Solutions, explained the action his TMC was taking for clients out on the road: “We are arranging alternatives by rail or car hire where possible, or discussing options for re-booking flights once the disruption ceases. Clients who are stranded overseas are being helped with hotel accommodation and billback options if they are low on currency. The task is huge because so many flights have been cancelled, but this is where a TMC really comes into its own.”

‘Days like today’ aren’t actually that few and far between, though rarely as freakish, unforeseen and disruptive. In the last six months alone we’ve seen swathes of snow, cabin crew strikes, trains stuck in cross-channel tunnels and terrorist threats all they all affect the smooth transition of leisure and business travellers.

So who’s there to pick up the pieces when it all goes wrong? Their role as the Red Adair of corporate travel is just one facet of the case for

TMCs, alongside access to negotiated rates, all manner of ‘tools’, assistance with travel policy, the capture of management information and the hands on/off role of running the travel programme.

Not so long ago the very existence of TMCs was in question – ‘dinosaur’ was the term often pinned on them – but their evolution has forced a change in their favour, with corporates seeing the benefits of outsourcing, exploiting their expertise and treating them as strategic partners.

The economic downturn from which we are now emerging appears to have further cemented the bond between them, each getting to grips with financial constraints in their own way. For TMCs this has meant, in some cases, staff redundancies, a smattering of buy-outs and mergers and diversification to new sectors.

Travel Alliance, for example, has been taken over by Wings Corporate Travel, while Chambers Travel Management and Business Travel Direct have partnered in establishing a EuroCentre in the City of London, staffed by multilingual, experience travel consultants to serve the clients of both TMCs. Stopping short of a merger, Chambers and BTD are simply “cooperating strategically for the benefit of both businesses.”

Anne Godfrey, appointed late last year as chief executive of the Guild of Travel Management Companies, says, “It’s been a tough 18 months but TMCs are relatively robust businesses and they’re beginning to look more optimistic too. A while ago some would have been expecting not to be around much longer.”

The GTMC itself is evolving, changing its membership structure in order to welcome new TMCs into the fold. “We currently represent

around 80 per cent of managed business travel in the UK but that would take us to 90 per cent. It’s all about increasing our voice and lobbying power,” says Godfrey.

One recurring problem faced by TMCs is demonstrating the value of their service to the doubters out there, something the recession has at least helped them to do. Corporates, as widely reported by TMCs, have been channelling a greater proportion of their travel spend through their

TMC, turning to them to help cut back on cost and tighten travel policy.

“There’s been fewer people on planes but travel buyers have been coming to us and seeking our expertise. People are much more aware of costs,” says HRG's Windsor. “It can be difficult to prove our value sometimes. There’s a cost involved for clients but they can’t necessarily see the savings.

“We’re so much more than a booking tool. There's the data that comes out of the system, for example. We look at pre-trip data and increasingly look at cost avoidance, which seems like a strange thing to say from a TMC point of view, but it’s what’s expected now, not

necessarily as part of the core offering but certainly larger clients expect it.”

As one enlightened travel buyer says, “A TMC might cost four or five per cent of our overall travel spend, but they are the gateway to controlling the other 95 per cent.” The same buyer added that even a small company can reap the rewards of hooking up with a TMC by gaining access to the rates it is able to negotiate courtesy of clients' combined spending power.

For those smaller companies, though, the million dollar question is whether they’ll be a small fish in a big pond of a large TMC, a question perhaps less pertinent now that the big boys are actively courting the ranks of potential SME clients out there. While many of the larger TMCs have long held SME clients in their portfolios, sceptics, however, argue that their renewed interest in this sector is a result of cutbacks among their multinational accounts.

In January, for example, American Express Business Travel launched aXcent for companies with annual spend of up to £3million; FCm has launched an entirely new division, Corporate Traveller, for its clients with £5,000 to £1.5million spend per year; HRG launched Simply HRG last autumn; and CWT has recently released a facility called CWT Connect Now for clients with a spend of £50,000 to £2million.

“It will surprise many to know that half of CWT UK clients spend less than £200,000 annually on

"It’s been a tough 18 months but TMCs are robust businesses and they’re beginning to look more optimistic too"

SIMone Buckley and clare Murphy of business travel consultants Bouda give their top tips for sourcing the right TMc for your company’s needs.• Look inside first! Understand thoroughly what it is

that YoU need. what is your current travel profile? How much do you spend on air, rail and hotels? where are your travellers going? Mostly UK or overseas? Do you book online or do you have a high touch requirement? Is there a complicated approval process and what is your accounting process? Is your policy simple or complicated?

• What are you trying to achieve? Better service, online adoption, price reduction, proactive management?

• Be clear and thorough in your sourcing specification – get into the detail.

• Ask ‘how’ your potential supplier does things, not ‘if’ they can’.

• If your travel profile is evenly split between air, rail and hotel and mainly domestic it is well worth considering specialist providers such as hotel booking agents and rail self-booking tools as an alternative to the one-stop shop.

• If your travel spend is significant enough to justify an investment in a direct deal with a self-booking tool provider this should be considered. Alternatively, source a TMC that will provide one without significant additional cost.

• If you are sourcing your own self-booking tool make sure you pick a TMC that has experience working with your chosen technology.

• Ask to see proof of the adoption they have achieved for other companies.

• Make sure your fee structure delivers instant savings for online adoption.

• Focus on finalising the contract to reflect what you bought, not what they think they sold you.

selecting a tmc

travel,” says Andrew Waller, executive vice president, CWT UK & Ireland. “We are committed to servicing clients of all sizes and in all sectors with tailored solutions which suit their particular needs.”

HRG’s Windsor says the TMC has always maintained a focus on SMEs but it needed ‘refreshing’: “We’ve repackaged everything for SMEs. We’re all looking for a piece of the pie – no one wants all their eggs in one basket. It looks more obvious that we’re targetting SMEs because multinationals have been scaling down and that’s made it more transparent.”

While gathering information for the TMCs listings details (to be found on the following pages) we quickly decided to scrap the category asking if the TMC in question had a dedicated SME division – while some larger TMCs do, many more stated that SMEs are their bread and butter, rather than large multinational accounts.

“We are SME specialists,” said Norad Travel Management; “The majority of our customers are SMEs,” said Horncastle; Uniglobe’s focus “has always been on the SME section of the market”; while Hillgate Travel didn’t beat around the bush, stating: “We believe any company that differentiates between large and small business has an area of weakness they wish to exploit.”

Gary McLeod of Leeds and Edinburgh-based Traveleads, meanwhile, did not hold back, referring to SME divisions as, “a recent and disingenuous invention of the multiples, now that work is thin on the ground, to make it look like they're interested in clients at whose levels of spend they previously turned their noses up.” Subsequent correspondence resulted in a 1,300-word email from McLeod, such are his feelings on the subject.

Clearly the jury is still out on the matter, so SMEs sourcing a TMC must consider the advantages – and shortfalls – that both large and small TMCs bring to the table. McLeod advises travel managers to check out a TMC’s staff retention levels and their training and experience; to find out what technology it makes available to its clients; ask about client retention and seek references; discuss the TMC's range of supplier deals and contracts, and examine where they would fit in to the TMC’s portfolio of clients.

Peter Reglar, chief executive of Business Travel Direct, also comments on the contrast between the needs of large and small corporations. “Larger clients with procurement departments tend to have a much clearer idea of what they want. Procurement managers set clear briefs, are informed about TMCs and their service offering

and so can easily make decisions about which are most suitable for their businesses.

“SMEs, on the other hand, need a very different approach that entails taking more of a consultancy or guiding role. SMEs are unlikely to set a clear brief, rather relying instead on the TMC to guide them through a process to discover exactly what they need and how it should be delivered. Time is perhaps the most important thing that TMCs can offer an SME,” Reglar concludes.

The worse thing a small company can do is to let its travel spend go totally unmanaged and the question should at least be asked of TMCs what they could do with it, no matter how small that spend is.

“I’m still forever amazed at the number of companies that simply don't take their travel procurement seriously,” says Simon McLean, managing director of Click Travel. “Would these companies be happy if one of their employees popped into Currys, bought themselves a new laptop and claimed it on their expenses? Of course they wouldn’t. By using a TMC effectively travel costs can be monitored, enforced and controlled, leading to vast savings off the bottom line.” Not to mention getting your travellers home in the event of a volcanic eruption.

Feature: Travel Management Companies

www.THEBUSINESSTRAVELMAG.coM I 25

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the following listings features only those tmcs that responded to The Business Travel Magazine’s request for information and subsequently supplied the necessary details.

advantage business travel managementTurnover: A combined UK annual turnover of £1 billion. Size: A group of over 200 independent TMcs across the UK, with partners in 12 countries around the world.It says: “Advantage Business Travel Management was established over 30 years ago and currently has over 200 members serving the business travel needs of predominantly SME businesses across the country from all industry sectors. By combining their buying power, the group is able to negotiate among the best airline fares and supplier deals in the market to the benefit of their travelling clients.”Specialist sectors: Its 200 members cover every sector of the economy, says Advantage. Some specialise in certain industries but most members service businesses in their own geographical area. “As members are SMEs themselves they better understand the needs of this size and type of business. Being part of a larger organisation such as Advantage gives members access to the best tools and significant buying power, enabling them to provide customers with services such as self-booking tools, as well as among the best airline and hotel rates in the industry,” says Advantage.new business contact: Norman Gage.Tel: 020 7324 3932.Website: www.advantagebusinesstravel.com

altour internationalTurnover: £25.3million in the UK.Size: London offices with 40 staff, plus an office in Paris and 75 in the US. It says: “Altour is a mix of employees and independent contractors (IC) running their own travel businesses within the Altour organisation, thereby maximising income and cost saving with an established infrastructure. Altour was founded in 1991 in the US by owner and president, Mr

Alexandre chemla. The company celebrated its ten-year UK anniversary in 2009. we are keen to expand UK operations and ready to engage in dialogue with individuals and other travel companies that may be interested in discussing this Ic model. The ethos of the company globally is to lead with our experienced people and high-touch service.”Specialist sectors: The company has a large entertain-ment client base from the TV, film, music tours and sports sectors, plus finance and legal corporate clients.new business contact: Nigel Parkinson.Tel: 0207 832 3300.Website: www.altour.com.

american express business travel Turnover: cannot currently disclose.Size: Not supplied.It says: “American Express Business Travel is committed to helping its clients maximize the greatest return on their travel investment through increased cost savings, world-class customer service and greater spending control. with clients ranging from small businesses to multinational corporations, American Express Business Travel provides a combination of industry-leading technology, travel management consulting, strategic sourcing and supplier negotiation support, alongside global customer service available online and offline. The company also provides a dynamic online community.” new business contact: Mark Douglas.Tel: 0870 600 1060.Website: www.americanexpress.co.uk/businesstravel.

amity World business travel Turnover: £8million.Size: 17 staff in one office.It says: “A resourceful, innovative and successful TMC since 1971. Based in Hampshire, serving the Solent Area business community but now with accounts nationwide. Our clients enjoy the best of both worlds – a partner relationship with an independently owner managed company that combines massive industry expertise and a

‘can do’ customer service ethic, with the global buying power and industry leading technology of the Advantage Focus Partnership. Large or small, each client receives the same highly individual service from our experienced team of travel consultants.”Specialist sectors: SME.new business contact: Sarah Vincent.Tel: 01489 589958.Website: www.amitytravel.co.uk.

atPiTurnover: £194.5million in the UK.Size: In the UK ATPI employs around 350 across seven offices. Internationally, the group employs over 1,200 people across 40-plus offices in 23 countries.It says: “The ATPI Group is a world leading mid-market international travel company, combining high quality, sector-specific services with international reach and a strong cost-saving culture. Proprietary booking and travel management technology sits alongside established third party solutions giving clients a full range of options. ATPI offers an extensive range of in-house solutions including a passport and visa department and a pan-European

tmcs: Who's Who