“What this situation has shown is that there’s more to the
TMC service proposition than just the transaction,” says Tom Rigby, global
commercial director at Reed & Mackay, summing up the impact of coronavirus on the managed travel sector.
“In our experience, the role of the travel
management company has almost changed. We’ve gone from a travel consultant to
an advisor. We’re helping our partners navigate through a really tricky and
complex scenario – everything from travellers stranded and unable to repatriate
to airline refunds,” adds Rigby.
“We’re also now seeing a lot of pent up demand for travel,
so we have to be the conduit between the airlines, hotels and customers to find
out how we can get people back on the road safely and efficiently. It’s more than
a transaction fee, more than a commodity; this is about articulating the value
of our service to our customers.”
Rigby’s sentiment is one that has been widely shared among
the TMC and travel buyer community in recent months, particularly as corporates
begin to take stock of the current state of affairs ahead of travellers getting
back on the road.
The coronavirus crisis has caused a great deal of introspection in
the business travel industry. Airlines have been forced to rethink their route
networks and capacity growth because the pandemic is expected to hit passenger
demand for years to come; hotels have had to put together communications and
marketing campaigns around their cleanliness protocols to reassure guests that
it’s safe to stay with them; and TMCs are starting to consider the commercial
models by which they have operated for the last 25 years or so (more on that in
the upcoming July/August issue of BTN Europe).
But it has also created the opportunity for travel managers to
see exactly what it is a TMC can do for a company of any size.
Will Tate, managing partner at GoldSpring Consulting, told BTN
in June that crises such as Covid-19 highlight all the reasons corporates rely
on their TMC partners, from cancellations to out-of-hours calls to repatriating
travellers left stranded away from home as international borders closed and
airlines started cancelling flights to limit the spread of the virus. That’s
not to mention the mammoth amount of work that went into processing refunds,
vouchers and unused tickets as the global aviation industry practically shut
down, or the needs of clients as they prepare to allow employees to travel
again.
Tate says: "I would maintain that buyers need TMCs more
than ever. Travellers will be back on the road. There will be more rules, more
booking tool configuration, you have lots of policy changes implemented, unused
tickets, lots of pre-trip approval. I believe client companies will be willing
to pay for these services in a more complex environment."
“The nice thing to come out of this situation is we’ve had
customers say to us that they didn’t see the full benefit of using a TMC before
but now they realise exactly what we provide,” says Jill Palmer, CEO of Click
Travel.
“Businesses that didn’t use the services of a
TMC before now want to do so because they see the benefit, and businesses that
have used us for parts of their programme – say rail and air – now want to use
us for other parts, like hotels, because they now realise what we offer in
terms of risk management, policy control and cancellations.”
Rigby adds: “Pretty much every TMC has had to furlough a part
of their workforce, and that puts a lot of pressure on them and brings a lot of
uncertainty. Coronavirus has also severely impacted companies’ ability to
generate a recurring income in a zero-volume environment. It’s been a big
challenge.
“Where we’ve seen our biggest success is where we have long-standing
relationships with clients where they can see past the transaction. We’ve been
overwhelmed by the support we’ve received from our clients in taking us through
this challenge.
“We’re positive about the future because there will be a
wave of corporates that previously didn’t think they needed a TMC but are now
seeing the value because of the importance we have all placed on the duty of
care aspect throughout this crisis and moving forwards,” says Rigby.
According to Raj Sachdave, managing partner at Black Box
Partnerships, this revelation has actually been years in the making. “TMCs have
done a great job of integrating traveller tracking and duty of care elements
over the last few years,” he says.
“Now TMCs are collating those factors
to show clients that when people travel they’re not just dealing with getting
from A to B but also with how travellers feel and perform. That’s the next
evolution of travel. And that’s what clients are looking for in an era where
pandemics can cause widespread disruption.
“I think it’s lazy to ask what the new value proposition of
a TMC is; as a buyer I would personally never say that. If you’re experienced
enough and you think the right way about your relationship with your TMC, you
will understand their value without asking. A lot of TMCs had been investing
heavily in traveller health and wellbeing long before Covid hit so a good
buyer will already understand their value.”
Paccar's global travel, expense and corporate card manager
Nari Narvani echoed that thought process in an interview with BTN in
June. "We kept one of our VIP agents," she said. "The short-term
cost was worth it for the agent's work on unused ticket waiver tracking. The
savings we brought in from that one audit was significant."
Abby Penston, CEO of Focus Travel Partnerships, adds: “Corporates
realise and appreciate the increased levels of service TMCs provided [during
the pandemic] – we no longer have to justify the value of a TMC. They offer
a wrap-around service that will provide a belt and braces approach to health and
safety. They manage the complexities of travel, which have now increased
substantially. Corporates know they need to provide a higher level of safety
and assurances to their travelling teams and will be making more service
demands.”