A Travel Management Company and Travel Agency are NOT the same thing. Clarifying can help your T&E procurement system

At times the challenge with introducing a new travel procurement program is that your staff can think that you have just hired a travel agency to help them with travel. First of all, many don’t think they need help booking their trip. Secondly, they have no idea what a Travel Management Company does versus a travel agency.

So let’s start with not needing help making their travel arrangements. Quality TMCs have both online and call in systems to make easy and complex reservations however the traveler sees fit 24/7 in a managed environment. They also have teams to construct complex muti-leg international itineraries or even change/support reservations when schedules change or weather disrupts the industry. So at one point every traveler is going to need some help to get out of a jam and/or save time. When we say a managed environment we mean that the resulting reservation will make the traveler and the company who is purchasing the trip as happy as possible based on some defined policies, procedures and systemic expectations.

When you Google Corporate Travel Management (CMT) you come up with the following Wikipedia definition: CTM is the function of managing a company’s strategic approach to travel (travel policy), the negotiations with all vendors, day-today operation of the corporate travel program, traveler safety & security, credit-card management and T&E data management. CTM should not be confused with the work of a traditional Travel Agency. While agencies provide the day-to-day travel services to corporate clients, they are the implementing arm of what the corporation has negotiated and put forth in policy.*

In other words, CTM decides on the class of service that employees are allowed to fly, negotiates corporate fares/rates with airlines and hotels as well as sets forth the use of the corporate credit card. The agency on the other hand makes the actual reservation within the parameters given by the corporation and develops, supports, and or enforces the desires of both the company and its travelers. For most companies “travel & expenses” (T&E) costs represent the second highest controllable annual expense, exceeded only by salary & benefits, and is commonly higher than IT and/or real estate costs. T&E costs are not only limited to travel (airline, rail, hotel, car rental, ferry/boat, etc.) but include all costs incurred during travel such as staff & client meals, taxi fares, gratuities, client gifts, supplies (office supplies and/or services), etc. Furthermore, this area often includes meeting management, traveler safety & security as well as credit card and overall travel data management. The management of these costs are usually handled by the Corporate Travel Manager, a function that can be part of the Finance, HR, Procurement or Administrative Services Department. As this function touches on all of these areas in some form and represents such a major corporate expense, it stands to reason that this function should have equal ranking within a corporation as any other major division and not be seen as a sub-set of existing departments

So if you fully leverage these travel management opportunities, communicate what you will be having your TMC do from a B2B standpoint, clarify the difference between the B2B relationship you have established versus a retail travel agency relationship, track the results, and share progress and expectations with you team,  you can expect more compliance with the big picture value you should expect.

*http://en.wikipedia.org/wiki/Corporate_travel_management

Travel Management Companies are Not Dead, In Fact They're Thriving

In a recent article by by Marilee Crocker titled Govt. Looks to Travel Agents for Lessons in Resilience , Marilee points out that the government has taken notice of the fact that in the travel agency industry, pointing out, “At the U.S. Bureau of Labor Statistics, economists who study productivity noted a significant and steady increase in the productivity of the travel agency industry—including both traditional and large travel sellers.”

Outsiders share with me all the time that they thought that travel agencies have gone away. I always have to explain how a Travel Agency (personal travel) is different from a Travel Management Company (business travel) and that the industry has been broken into niche markets. I also have to remind them that Online Travel Companies are travel agencies too and even have some humans behind them who consider themselves to be travel agents. We know from our experience that the increased use of technology has allowed us to grow as a company with less travel agents as a percentage of our larger size (35% of all of our reservation come to us through online tools we build, customize and support for our corporate customers) and with our travel agents who have kept pace with the productivity requirements of the business model by leveraging an amazing range of tools allowing them to do more in less time more effectively.

The article goes on to state that only the best can survive and have survived and they are investigating that mojo. I am glad we have it. I don’t see us going away any time soon (as a matter of fact this year is already on pace to be our biggest growth year ever), and these changes have made us a company that can embrace change. The rumors of our demise have been greatly exaggerated!

 

Marliee's full article can be found here:  http://www.travelmarketreport.com/content/publiccontent.aspx?pageID=1364&articleID=10562&LP=1

What is the Real Problem Regarding Rogue Behavior?

In a recent PhoCusWright survey it stated that 55% of travel is not being managed by a TMC (Travel Management Company). My experience in the marketplace has been that the real reason behind this high percentage is that no one is out there touting the benefits of a managed travel system for the company and the travelers. Travelers are focused on making their trips and the company should be focused on managing travel - the line item.

Who teaches mid sized companies the key tenants of a well managed travel procurement system – what I like to call the travel management ecosystem? Well, we do but not many more. The way to get business travelers to use a travel procurement system is to make the systems better and the benefits clear. The systems are getting better and with bigger data it's pretty darn great. Let's get our industry to teach travel procurement to the anarchists who manage every other possible expense except this one. Let's then help these believers address maverick spend in a meaningful way versus a way that seems to enable maverick behavior. Sales force and Google manage travel democratically yet uniquely. 

First Class Service to Third World Charm

As many of you know, I left on March 30 for Kathmandu to take the trek up to Mt. Everest Base Camp with my longtime friend and customer John Carney. Flying well makes a big difference. I left the US yesterday on a business class ticket with Etihad Airways and was very well taken care of. Business class included amazing lay flat sleeping, allowing full and complete sleep on the first fourteen hours of the flight,  a large screen monitor chocked with movies and programs, an amazing international crew, service, and food - and that was in business class. First class had even larger more comfortable quarters and supposedly a private chef.

 

I had a four hour layover in Abu Dhabi. The airline arranged for a meet and greet at the gate. This caring and smiling representative escorted me and my new friends Audrey and Jeff to the first class lounge where we showered, had a spa treatment, and a nice personally prepared sit down meal. They are both heading to Everest as well (climbers and trekkers are beginning to find each other). Audrey is a trekker on my trip. Jeff is a climber who attempted to summit Everest with my friend John Carney and is back for his second attempt. It's great to be in this community, and the players can be identified from afar.  The lounge looked, smelled and acted like a Four Seasons. Travel at this level and these experiences are what makes me love what we do.  

 

 

 

 

The Etihad Representative escorted us to the next flight. Watching the Arab cultures walk through the airport and the Vegas like world outside in Abu Dhabi was fascinating. The Flight to Kathmandu was less than four hours. Another meet and greet had me an my new buddies get off the plane first and into a private van to baggage claim where my bags where pre pulled. Visa and passport control was clunky, but having gone through it first made it easy.

 

Upon entertaining Nepal, a real world experience began to change from a first class one to a third world country experience. You could tell the air was thick with pollution and the chaos of taxi drivers and private pickup vehicles with tons of signs and hordes of people yelling out their company or offer. I saw the Alpine Ascents (the company who is leading the expedition up Mt. Everest) sign and followed the crew to their van. We waited for one more traveler to arrive - Erin Carney, John's niece and my hiking buddy. She welcome the friendly face and off we left in the van through the chaotic streets highlighted by dimly lit shops to the Yak and Yeti hotel.

 

 

The hotel is a blend of what seems to be ancient Nepalese extravagance and sixties or seventies modern. A clean and calm retreat from the streets of Kathmandu. Our guides checked us in, we dropped our gear, and headed down for an Everest beer (yeah that's the name of the local beer) and some conversation. John and Nick (Johns college roommate and my soon to be trek mate) found us and the day ended with friends, travel tails, and grand expectations. After a great night sleep I write you today from a sunny lounge and bad cup of coffee. A great start to what is sure to be an amazing journey.