BTN's annual answer book for business travel managers.
I want to go to bid for a travel management company
for the first time. How do I know what TMCs to look into? What are the basics the
TMC should offer? What can I expect? How can I comparison shop?
Ask yourself why. That's what Dart Container travel services
manager Cheryl Benjamin's advice boils down to. What is it you want from a TMC?
What are you lacking? What are you trying to solve for? For example, how are your
travelers making bookings? Now, how do you want it done? Centralized, everything
through one location? What technology do you require, then? An online booking tool?
Also think about where the company is headed, she said. Is it
growing such that it soon will need a global TMC? Or for a U.S.-centric program,
will a regional TMC that specializes in smaller clients do the trick? And consider
whether the company holds contracts with suppliers or instead hopes to access the
rates TMCs have negotiated with suppliers. Sykes director of global finance and
travel services Al Mazzola additionally advised small and midsize enterprises to
consider what kind of reporting they want from their TMCs, and Ritchie Bros. Auctioneers
travel administration manager Michelle Grant added access to real-time data and,
if it's important to your company, VIP service.
With your needs and expectations outlined, Benjamin recommended
chatting with TMCs: "There's nothing wrong with talking to someone at various
ones before they even jump into the RFP process because they may find out, 'Wow,
they're huge and we're a $1 million account. Maybe that's not the right fit for
us.'" Grant advised that you identify a challenge in your business and ask
how the TMC can help. Even "ask to make a couple of test bookings with each
agency and compare the service, pricing options and counselor knowledge," she
said, and ask for references.
But how do you know what TMCs to talk with in the first place?
"Pull on other travel managers you know," Benjamin said. "Start asking
questions. We're more than happy to share our experiences, good and bad." Look
for compatriots among local membership organizations: "Our Michigan chapter
of GBTA [has] an informal little benchmarking group that's probably 30 some people,"
she said. "If we have a problem, we toss it out there in an email, and you're
going to easily get 15 to 20 answers."
There's nothing wrong with talking to someone at various [TMCs] before they even jump into the RFP process."
Of course, you also can pay a consultant for its expertise in
the matter. Partnership Travel Consulting CEO Andy Menkes, himself a consultant,
explained the service options: Under the most basic service, the client does most
of the work and the consulting company provides RFP forms and helps with analysis.
Or a company can outsource the entire project, in which case, the consultant likely
will base fees on the number of countries the travel program covers and accessibility
of company data for the consultant.
So is all this worth it? "You're not going to see ROI in
Year One," Menkes said, but assume a 30 percent savings on travel costs in
the first year and 20 percent each of the next two years. Deduct the cost of an
RFP, including a consultant's fee if that's the way you went, from those three years
of savings, "and in every case, there's going to be an ROI."
When the time comes to select a TMC, Mazzola recommended comparing
TMCs' costs per ticket and the costs to change a ticket, as well as whether they
offer 24-hour service for such changes. Menkes cautioned, though, "The cheapest
TMC is not necessarily going to give you the best service."
Here, his advice circles back to Benjamin's: Look
for a TMC that can best serve your company's objectives, he said. "Company
A may say, 'I'm all about costs, and I want to be as online as possible. I want
to be 100 percent online, and I want my fees to be under $10.' Then their best bet
may be an [online travel agency]," Menkes said. "Client B says, 'I'm a
professional services firm. A fair amount of our work is billable. We want to give
our clients good value for their money, but the experience of the travelers is critical
to me.' That's a completely different metric. … You want somebody to drive down
your costs? Well great. Pick someone who has a low-cost center, somewhere outside
the U.S." There also are TMCs that specialize in high service levels and value
adds like upgrades. And yes, they'll do it for SMEs, he said.
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