ARTICLE CONTINUES...

TECHNOLOGICAL EVOLUTION

A number of traditional travel agencies in Italy are slowly reinventing themselves as TMCs.

“This is not merely a rebranding exercise: some of these companies are making significant investments – proprietary technology systems, self-booking tools, and dedicated corporate teams – to build a complete TMC offering,” said Caglia.

“The decision to build proprietary platforms rather than rely on third-party tools is especially significant at this moment,” said Caglia. “In a market where traditional GDSs are seeing their central role eroded in favour of airlines’ NDC content, whoever owns the content access platform controls a strategic asset,” she said. “Agencies that have chosen this path are betting on technological autonomy as a source of competitive advantage — a risky bet in terms of time-to-market and development costs, but potentially highly rewarding in terms of differentiation and data-driven customer relationships.”

Technology is beginning to reshape the TMC landscape too.

“An ecosystem of Italian startups and scale-ups focused on technology applied to travel management is emerging,” said Caglia. “These are not simple integrators or resellers of international solutions. They are players developing proprietary IP, with a strong focus on artificial intelligence applied to business travel workflows.”

“These companies are choosing to build their own tools rather than relying exclusively on third-party infrastructure – GDSs, online booking tools from international providers – and this is a strategically bold decision… as well as an expensive one,” she said. “The reasoning behind this choice appears more rational than one might think: whoever controls the platform controls the data, and whoever controls the data controls the customer relationship.”

But Italian TMCs are resisting the temptation to shift everything toward automation.

“The culture of tailor-made service, the personal relationship between travel managers and TMC consultants, and deep knowledge of the corporate environment remain distinguishing elements in a market where Italian business travellers continue to maintain high service expectations,” said Caglia.

“At the same time, the market is gradually introducing AI and automation tools, especially for repetitive operational activities, while the human component remains central in exception management and customer relationships,” he said. “The result is a hybrid model: technology enters processes to improve efficiency and speed, but without replacing the value of personal relationships and customised consulting, which continue to represent one of the defining characteristics of Italian business travel.”

AI threatens to shake up the TMC remuneration model

In Italy, the dominant remuneration model is still based on transaction fees: the value of a TMC is measured by the number of bookings managed, not by the value generated for the client.

“This model has a defensible logic in a context focused purely on operational efficiency, but it becomes inherently problematic during a period of technological transformation,” said Caglia.

“The structural contradiction is this: if automation reduces operational costs per transaction, TMCs operating on transaction fees fall into a trap – the more efficient they become thanks to AI, the less they earn. The Italian market has not yet found a credible answer to this contradiction. In some Anglo-Saxon markets, the debate around value-based models – subscriptions, value-based fees, advisory retainers – is already advanced. In Italy, the conversation has only just begun.”

SUPPLIERS AND THE ITALIAN MARKET

The Italian market has a highly heterogeneous supply structure. International players operate alongside significant national companies and a long tail of regional and specialised operators serve a SME-driven economic fabric that has no equivalent in other European markets.

“Italian corporate clients – reflecting a market dominated by SMEs and mid-market companies rather than large multinationals – still favour tailor-made service, dedicated contacts, and deep knowledge of the local industrial landscape, all of which continue to favour national players over standardised platforms,” said Caglia. “At the same time, the growing centrality of technology, data integration, and operational efficiency is putting this model under pressure.”

ITA Airways closed 2025 with the first net profit in its history, amounting to €209 million, a result that – despite important caveats (EBIT of only €25 million, still-heavy leasing costs, and thin margins) – symbolically marks the end of the Alitalia era and the beginning of a trajectory toward stability.

Revenues reached €3.2 billion, of which €2.8 billion came from passenger traffic (+2.7 per cent year-on-year), despite an 11 per cent reduction in operated flights and an 8 per cent decrease in transported passengers.

The primary driver of the turnaround is not volumetric but qualitative: integration with the Lufthansa Group – which owns 41 per cent of ITA – has generated concrete operational and commercial synergies. Entry into Miles & More and Star Alliance on 1 April 2025, opened codeshare and interlining opportunities with alliance partners, significantly improving international route coverage — historically the Achilles’ heel of the Italian carrier.

“For Italian business travellers, the benefits are already becoming tangible on several levels. ITA’s operational stability reduces the risk associated with choosing the carrier — for years, Alitalia’s financial fragility pushed many travel managers to diversify toward other airlines as implicit insurance against sudden collapse,” said Caglia.

With a more stable ITA, the argument for consolidating spend with the national carrier becomes stronger and more sustainable.

Entry into Star Alliance is perhaps the most relevant development for the corporate segment: corporate loyalty programmes — now integrated into Miles & More — offer tangible advantages for companies with significant travel spend. Corporate frequent flyers can accumulate miles across the entire Star Alliance network, strengthening the value proposition for travel managers negotiating preferred agreements with the carrier.

Sustainability of ITA Airways’ profit is not yet guaranteed.

Caglia said, “Leasing costs for the new fleet remain high, and EBIT margins are still below those of comparable European carriers. Dependence on the Lufthansa alliance for international connecting traffic also reduces the carrier’s commercial autonomy.”

ITA Airways profitability comes against a backdrop of Italian rail transport progressively eroding domestic air travel market share on major routes. Milan–Rome is the most cited example, but the phenomenon extends along the entire high-speed corridor: Bologna, Naples, Florence, and now progressively further south with the completion of new high-speed routes.

Caglia said, “For Italian business travellers, trains now offer a systemic advantage that goes beyond price: central stations, no pre-boarding queues, guaranteed connectivity, and a business-class experience rivalling airline offerings on equivalent routes. The result is a structural migration of volumes that is unlikely to reverse.”

LOOKING AHEAD

Two external factors are significantly influencing Italian business travel in 2026.

The first is geopolitics: instability in the Middle East and trade tensions generated by US tariff policies have created uncertainty around intercontinental routes and multinational travel budgets. Travel managers are reassessing approval policies for travel to high-risk areas, with increasing demand for more sophisticated travel risk management tools.

The second is accommodation cost inflation: HotelHub’s analysis published in May 2026 highlights doubledigit increases in corporate rates across many European cities. In Italy, the impact of the Jubilee in Rome and international trade fairs in Milan has further compressed availability during strategic booking windows, making the negotiation of corporate rate agreements more complex and less predictable than in previous years.