While there are a myriad of booking options for corporate travelers, every study I’ve either read or conducted over my career clearly demonstrates the value provided by the TMC both in terms of service and cost savings. When examined closely, the customer support provided by a TMC when dealing across disparate supplier types, differing travel situations, traveler personalities, and language barriers is remarkable.
In terms of cost savings, TMC’s have developed and/or implemented solutions that provide robust supplier reporting for difficult market share/volume discount preferred relationships, shopping tools that hunt for better deals and rebook, authorization technology that deftly helps swing bookings just enough to enjoy a slightly better discount, third party connections that enable more robust content offerings, and a finger on the pulse of industry change that enables the client to pivot immediately to take advantage of a short term bargain.
TMC’s provide all of the data to air, car, and hotel suppliers needed in well thought out, easy to use, structured, and flexible reporting that helps optimize the corporate travel program. It’s true that sometimes a traveler can “find a better deal elsewhere” and as with all services there are associated costs, but on the whole and for most programs, the return on investment for TMC services pays huge dividends.
The Problem is Compliance
Unlike corporate credit card or expense data, TMC data is exactly what a travel program needs to be successful. No matter what the clients’ short term goals may be, ultimately cost savings and program optimization take center stage. New TMC implemented? Supplier deal done? Corporate card program implemented? Great! How do we save money?
As described in Part Two: The Problem with Expense Data, our consultants recognize that the greatest area for cost savings/optimization comes as a result of fully leveraging all available travel volume. Our first step is typically to compare expense and TMC data to get a sense of how much travel volume is occurring outside of the TMC. Given that the expense data is not granular enough for us to really do anything in terms of supplier optimization we can make some educated guesses. We assume that the “leakage” data in terms of travel patterns may closely mirror those travel patterns that we see from TMC reporting. We can then assume that if we had meaningful data that we could, at minimum, leverage that spend equally relative to the deals we currently have in place. That simple exercise helps us frame the argument for better compliance and the potential cost savings/optimization. Unfortunately, travel compliance is typically an unwinnable struggle as described in many of my past blogs.
A Myriad Number of Booking Options
As mentioned above, consumer choice is vast and only growing. Airline and hotel suppliers have historically sought to disrupt the traditional distribution model to limit distribution costs and engender better brand loyalty by servicing customers directly on their websites. The supplier direct strategy has taken many forms over the years including limiting content that TMC’s have access to via the Global Distribution System (GDS), providing incentive to book on the supplier website, and forcing the industry into new booking standards in the name of better and more robust content that falls outside of the GDS’ capabilities, such as New Distribution Capability (NDC).
The most important aspect of the booking options available in the marketplace today isn’t supplier preference as much as it is the consumer who is driving demand. Today’s consumer within organizations comprises mostly the Millennial generation. Suppliers and marketers clearly understand that organizations must balance their consumer’s buying preferences and employee retention strategy against a corporate travel policy that will provide the benefit we know that comes from TMC compliance. Corporate travel suppliers recognize that Millennials, unlike their predecessors, are more brand loyal, more technical, want to “do it on their own”, and have no patience for what they perceive as superfluous (like a corporate travel policy or a corporate booking engine). Suppliers understand the revenue benefit derived by selling direct and know that if a traveler books his business trip at supplier.com, he is more likely to book his vacation there as well.
The result is that while there is no problem with TMC data per se, the problem is quite simply that there is not enough of it.
We developed CapTrav because we considered there must be a better way.
Keep an eye out for the next blog in this series, Part Four: The Problem with Supplier Data. And, in case you missed them, check out Part One: The Problem with Corporate Credit Card Data and Part Two: The Problem with Expense Data.