STRUCTURE, SOURCING, SATISFACTION:
The evolving relationships between travel buyers and travel management companies
TMC STRUCTURE, SOURCING, SATISFACTION
Travel management companies are crucial allies to organizations that manage travel. Taking on many roles from the tactical to the strategic, TMCs regularly act as travel enablers, assisting with planning and booking travel, processing reservations, fulfilling transactions and supporting travelers in-trip—whether through human or digital means. TMCs report, analyze and consolidate the data and business information that illuminate travel management. They implement core travel technologies in the realms of booking, mobile capability and reporting, whether through proprietary or partner solutions. They can assist in the formulation, implementation and enforcement of travel policy, and serve as key players in traveler risk management and security. They regularly lend support in supplier negotiations and relationships, and act as a gateway to the supplier content users demand. Given the range of roles TMCs play, and the diversity of managed travel clients, the composition of these relationships vary widely.
More than three years ago, The Beat surveyed 160 travel managers to assess the structure of and satisfaction with their TMC relationships, and the frequency and manner in which they bid for TMC services. The Beat in the fourth quarter of 2019 fielded a follow-up survey of 177 corporate travel buyer respondents with at least $500,000 in 2018 U.S.-booked air spending. The Beat supplemented these statistical findings with interviews with agency execs, consultants and buyers. Among findings, transaction fees still dominate agency pricing, despite experimentation with other models. Further, price competition among TMCs is fierce.
The request-for-proposals process of sourcing TMCs remains relevant and is as rigorous as ever. Yet, considering it fills some buyers and agencies with dread, alternative models are in play.
Meanwhile, more buyers express satisfaction than dissatisfaction with their primary TMC, and a plurality see service levels improving. Among drivers of satisfaction, buyers place high value on human service, data management and content access, among other product and service attributes.
STRUCTURE
SOURCING
SATISFACTION
METHODOLOGY
METHODOLOGY
The Beat, invited qualified travel buyers to complete an online survey in October, November and December 2019. To better reflect managed travel programs, findings exclude results from companies that spent less than $500,000 in 2018 on airfares from the U.S. point of sale. Respondents identifying themselves as consultants, travel agency representatives or other suppliers also were excluded. Of the 177 corporate travel buyers whose quantitative responses were included, 22.6 percent spent between $500,000 and $2 million on airfares from the U.S. point of sale in calendar year 2018; 41.8 percent had U.S.-booked air volume greater than $2 million and up to $12 million; 13.6 percent had volume greater than $12 million and up to $20 million; and 22 percent had U.S.-booked air volume of more than $20 million.
Not every respondent answered all questions, and each chart in this study indicates the total number of qualified travel buyer respondents for that question. The Beat supplemented these statistical findings by interviewing travel management company executives, travel managers, procurement professionals and consultants. As with all editorial undertakings, The Beat developed, conducted and produced this research project with complete editorial independence.
Managing Editor
Group Design Manager
TRAVEL MEDIA LLC
About The Beat
The Beat is the must-read digital publication for senior-level corporate travel professionals, providing breaking news, insightful views and compelling interviews on corporate travel distribution, travel management and technology. The Beat serves an audience of more 10,000 through its paid-subscription newsletter and website. The Beat Live is an annual conference bringing together over 125 senior travel executives.