BTN's annual answer book for business travel managers.
Travel management companies, from the megas to midsize and smaller
players, have seen the number of small and midsize enterprises that wish to manage
their travel spend increase during recent years. The experts have differing opinions
about just why, but TMCs are nevertheless working to cater more solutions to SMEs,
both through in-house initiatives and via external partnerships.
The 'Why' of SME Travel Management Growth
There are a number of working theories about why more SMEs seem
to be embracing managed travel programs than in the past. One idea is tied to another growing area of the industry: travel
risk management. In a recent BTN survey of 229 travel buyers and managers and corporate
safety and security managers, 65 percent said their companies' attention to traveler
safety and travel risk management has increased over the past three years.
"Companies in [the SME] segment of the business are wanting to make sure they
know where their employees are," said BCD Travel SVP Kathy Bedell, who oversees
BCD Travel Affiliates.
We really took a step back and really wanted to recognize that there isn't a one-size-fits-all approach when it comes to either travel policies or programs within the midmarket because the needs and the challenges that midmarket companies have are so diverse."
Gant Travel Management president Patrick Linnihan's explanation
tracks closer to broader conditions in the workforce: Employees job-hop frequently,
and small and midsize companies fill executive positions with leaders who have worked
for larger companies. According to a 2016 report from the U.S. Bureau of Labor Statistics,
the median number of years that wage and salaried employees, regardless of age,
had been with their current employers was 4.6 years. For workers aged 25 to 34 years
that dropped to 2.8 years. "the idea of 'Yes, we can manage our travel when
we couldn't before'—that's being injected into companies as the American worker
no longer stays in the same place for 20 years anymore," said Linnihan.
"The ambitious CFO has worked at two or three companies and they know what
best practices look like from the time when they were working at Deloitte. And they're
naturally cross-pollinating what the best practices are across the SME landscape.
That's why you see the trend that you're seeing right now: leadership."
But part of that equation is also the development of and investment
in technology, which allows leaders coming from large companies to implement the
same or similar technology at an SME without the cost concerns of the past.
Companies in [the SME] segment of the business are wanting to make sure they know where their employees are."
Bedell said the biggest opportunities in the SME market for TMCs
"fall into areas where new technology solutions enable these smaller companies
to manage their travel programs, create compliance and change behavior through engagement
with the traveler." Bedell added that the growing emphasis on traveler engagement
and traveler experience also are leading SMEs to adopt managed travel. Those, too,
are driven by technology.
Three TMCs, Three SME Approaches
ATG's Small Business Division
The SME market doesn't even crack the top three list of business
priorities for ATG, a large TMC based in Columbus. Instead, ATG primarily focuses
on global accounts. However, about three years ago, the company established a small
business division to service corporates with less than $1 million in annual air
ATG CEO Tammy Krings said the division came about because corporates
with small travel spend were approaching the company "and we realized that
there was a need," she said. "We felt like this was an area where we could
be almost immediate heroes. We could have a positive impact very quickly."
Small business enterprises—as Krings calls them, even though
this can sometimes describe large companies with very limited travel spend—are able
to take advantage of economies of scale provided by ATG.
Among the greatest benefits for SMEs, Krings said, come from
ATG's supplier relationships. For example, a large air carrier may have an existing
product geared toward SMEs, but the SME may not know it exists and the air carrier
has trouble targeting small, managed programs. ATG makes that connection and provides
SMEs with a travel framework that will help them as they continue to expand.
"[Corporates] are able to introduce these controls and mechanisms and services
to the travelers as they're growing," she said. " If they go from 30 to
300 travelers in a very short period of time, then trying to introduce brand-new
policies and procedures to travelers becomes more cumbersome."
Gant's SME Pay Solution
SMEs make up about 98 percent of Gant's customer base, and the
Bloomington, Ind.-based company's growth during the past five years makes a compelling
case for the expansion of the SME market. Between May 3, 2011, and May 2, 2012,
Gant had $103 million in total client spend, $83 million coming from ARC. In the
same 12-month span five years later, between 2016 and 2017, the company reached
$220 million in total client spend, $155 million coming from ARC.
Gant is a preferred partner with Concur, a company that has been
making its own inroads with the SME market, most recently with Concur Risk Messaging,
which has a batch of enhancements planned for this summer. But Gant also has rolled
out a virtual pay option for hotel bookings via an integration between Conferma
and Concur. Linnihan said the product provides special value to the midmarket.
"All companies have non-employee travel," he said, but for large companies,
it's easy to establish direct billing, "whereas in a small company, you don't
have that power. So they're doing things like 'OK, we'll set up a direct bill,'
but it's laborious."
The first customer to roll out the program, called Gant Strategic
Pay, is Harmony Healthcare, an SME.
Conferma, Linnihan said, has made it "simple for an SME
to have as easy of a third-party billing process as the megacorporation with tons
of purchasing power that has a bank tripping over itself to solve their banking
BTN defines SMEs as companies
with $12 million or less in annual air spend, with an under-$2 million cutoff for
small companies. TMCs typically use similar criteria with varying spend cutoffs.
Gant Travel Management
president Patrick Linnihan said Gant defines an SME as any program with less than
$10 million in annual air spend, with a $3 million or less cutoff for small enterprises.
However, when a small company manages travel across multiple countries, Linnihan
said, Gant classifies them as midsize because they have more complex needs.
Some TMCs look to different
criteria to try to account for the complexity of globalized SMEs. "It's a very,
very difficult area to really define," said Colin Temple, American Express
Global Business Travel general manager and VP for the U.S. and Canada. "Many
companies themselves struggle with whether they're midsize or other." Temple
said Amex GBT tends to define SMEs as corporates with as few as 100 employees and
$100 million in revenue. "Some companies really self-select. We have some companies
on our portfolio that are vastly larger than that and I daresay some that actually
have a much smaller traveling population but who maybe have a higher or a disproportionate
travel spend based on the travel patterns."
Amex GBT's SME Relaunch
Amex GBT in March began selling a new service bundle designed
specifically for the midmarket. It's meant to enhance traveler experience and, as
a result, increase travel program adoption. "We really took a step back and
wanted to recognize that there isn't a one-size-fits-all approach when it comes
to either travel policies or programs within the midmarket because the needs and
the challenges that midmarket companies have are so diverse," said American
Express Global Business Travel general manager and VP for the U.S. and Canada Colin
Temple. "The more we looked at this, the more we came back to really elevating
the traveler experience because if the traveler isn't really buying into the value
of the program, the company isn't really going to get the usage they're looking
The company worked with Jigsaw Research and industrial design
company Livework to design an end-to-end experience for the midmarket, guided by
seven principals: personalization; proactive servicing, which means access to real-time
information and solutions when, for example, trips are disrupted; consistency; value
for money; clarity, aimed at providing companies with greater insights into travel
spend; customer effort, which pertains to simple and easy processes; and knowledge,
which speaks to expert advice provided to corporates.
Temple said Amex GBT further developed the program in a pilot
that began in December 2016. He said that while the seven principles are not necessarily
special to the middle market, "we typically find that, based on the services
that larger companies can afford to pay for, they're more readily available."
He added, "Our goal was to really democratize this approach to the middle-market
client and really leverage technology to do that," he added.
One piece of technology now available to clients through the
company's core bundle of midmarket services is Premier Insights, Amex GBT's reporting
tool. "We understand the vast majority of the smaller clients really need visibility
into what their travel spend is, the opportunity to manipulate certain thresholds,
for example, to get what-if scenarios," Temple said. "That really has
resonated well with the midmarket client: having this highly visual and intuitive
tool to use, which was previously inaccessible to smaller companies." The core
offering only allows companies to visualize travel spend. Corporates can choose
to add on card spend, as well, if they are American Express corporate card
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