GETTING IT RIGHT
The key considerations to help ensure your TMC tender runs smoothly and effectively
DOING THE GROUNDWORK
- Understand what’s important to your organisation: Cost? Service? Content? Sustainability? Global presence? Online? Offline?
- Survey travellers about existing partner and processes.
- Establish an advisory committee involving a range of stakeholders.
- Assess current agency service delivery standards and adapt for the future.
- Self-booking tool: consider whether this should be separated into a separate bid process from the TMC.
- Document mobile app requirements.
- Decide whether you’re going it alone or need some assistance
– and expertise – from an independent consultancy.
- Inform your incumbent TMC of your plans to rebid – the further in advance the better.
- Collect all the data you can on past (pre-Covid) travel volumes and bookings but also do your best to project future needs/expectations.
- Collect granular data by category, and by domestic and international travel.
- Check for leakage and how that could affect figures.
- Provide total transactions for the past three years if possible,
despite the unusual circumstances.
- Detail the nature of your bookings: online, offline, average number of calls per booking etc.
- Detail country source and cost centres of bookings.
Make a reasonable estimate of the first year’s volume after implementation.
- Provide details on refunds, voids and exchanges, including ticket transactions and net transactions.
- List existing key suppliers including specific routes and properties and indicate those with which corporate discounts are in place – but not the extent of them.
- Detail additional requirements: out of hours service? VIP service? Third party integrations?
- Detail your current set up – number of offices where TMC staff sit, traveller types (VIPs, independent contractors, frequent travellers) and seasonal fluctuations, for example.
- Detail number of calls to TMC per booking, average call length etc.
- Detail current payment processes.
- Get non-disclosure agreements in place.
NARROW THE FIELD
- Consider pre-RFP sessions for understanding potential bidders and educating your decision-making team.
- Seek feedback from buyer peers in similar sectors or budgets of TMCs.
- Evaluate the TMCs’ automated tools and their ability to integrate with other systems.
- Determine which TMCs best support the tech you want, including online booking tool, automated expense report, post-trip reporting, traveller tracking etc.
- Consider the TMC’s role in account management, negotiation services, policy consultation, process innovation etc, plus related fees.
- Ask TMCs about their suppliers, including which GDSs are available, and ensure transparency on how they are incentivised.
- Investigate how the TMC handles refunds, an area of potentially significant negative cash flow.
- Given the frequency of industry acquisitions, understand how your business would fit into a TMC’s portfolio in the event it is purchased by another TMC.
PREPARE & SEND RFPs
- If you do not conduct workshops, a prequalification process or an RFI that narrows your bidders list, require TMCs to meet minimum criteria to receive the RFP. Otherwise, you may be obliged to evaluate responses that are not appropriate for your business.
- Customise any generic RFP template for your needs.
- Allow TMCs at least one month to respond, and slate at least four to six weeks to evaluate responses.
- Let TMCs know the bidding rules and information about weighted criteria, information security and data privacy requirements, standard terms and conditions, whether you’ll require an in-person presentation and a timetable for the process.
- Communicate your organisation’s mission, growth plans, travel policies, objectives, requirements, data, current service configuration, service expectations, current preferred suppliers, reservations and payment methods, and projected changes in volume.
- Request information on the TMC’s ownership, offices and call centres, operating hours and after-hours service and support, years in operation, headcounts, agents’ average years of experience and length of time with the TMCs, preferred GDSs, online booking adoption rates, consortia memberships and negotiated pricing programmes.
- Seek references from customers with accounts of similar size in similar industries and that recently implemented the TMC.
- Seek clarity on proposed number of dedicated staff, call overflow procedures, after-hours services, allotted account management time, access to and reporting on non-GDS content and communication resources.
- Ask about synchronisation of traveller profiles with GDSs and booking tools.
- For multinational services, expect service delivery to be different in every country. How are partners in the various countries contractually committed? Ask to see the service-level agreement to which all local TMCs have committed.
- Financial and billing information. Provide a spreadsheet for TMCs to complete so proposals are all in the same format. Separate TMC revenue into base airline commissions, overrides, hotel and car rental commissions, GDS incentives and other. Use a common currency to make bid comparisons simple.
- Consider transaction, management and subscriptions fees, and hybrids thereof.
- Determine what transaction fees cover: online/offline, assisted/unassisted, single/multiple components, purchase/refund/cancellations.
- Determine treatment of supplier commissions: retained by TMC or returned (all or partially) to client. This will affect the level of your transaction fee.
- Management fees. The TMC returns all commission revenue to the client, which pays the TMC for the cost of direct labour and other direct operating expenses, TMC profit and overhead.
- Determine frequency of payments to TMC.
- Create a service level agreement potentially including a financial incentive to the TMC for meeting and exceeding specified KPIs.
EVALUATE THE PROPOSALS
- Quantify the areas of evaluation by a points system and weight areas that are most important to the organisation.
- Separate the technical proposals from the financial proposals. Evaluate the technical proposal and score prior to giving the evaluation committee sight of the financial proposals.
- Have your legal department review requested changes to your terms and conditions. Do not agree to automatic rollovers.
- Get bidders to answer any questions from your organisation.
- Invite the bidders to present and take questions on their proposals while sticking to an agenda. Ensure the TMC brings people who can answer operational and technical questions.
- Visit TMCs that reflect the configuration you desire. Meet the operations managers who would be assigned to your account.
- Call TMC references, including recently implemented or lost accounts. Call clients not included on the reference list. Consider giving the references a survey.
- Have your financial managers carefully review the proposed
fee structures or any proposed changes to them.
- Reduce the field to two or three finalists.
- Determine whether you need to negotiate with all finalists or only the leading bidder. Determine the appropriate fees and other terms you will accept.
- Require a solid rationale for any changes the TMCs request.
- Contracts should contain definitions of key business phrases, plus sections for financial, service-level agreement and data privacy and security details.
- Include a contingency emergency support plan in writing as part of the implementation package.
CONTRACTS & IMPLEMENTATION
- Do not use only a standard TMC contract, though you can adapt a template to fit your needs. Alternatively, use a form that your procurement department requires.
- Formulate a document that reflects your legal, service and financial considerations.
- Do not award the business until after you have both agreed to all the contract terms and conditions.
- Contracts should contain specific requirements, including service-level agreements, and should define expectations and financial incentives and penalties.
- If the TMC will fulfil online bookings, the service-level agreement should detail service expectations for ticketing, changes, refunds and support.
- If the winner’s proposal contained useful, measurable promises of performance, incorporate all or part of the proposal into the contract or as an addendum.
- Determine for how long pricing will be fixed and whether to allow for a pricing adjustment during the contract term.
- Require quarterly and annual reviews and options for an additional year or two.
- Contracts commonly last three to five years, but they often allow either party to terminate for breach with 30 days’ written notice and with opportunity to cure the breach. Contracts sometimes also allow you to terminate without cause with 90 days’ written notice at any time.
- Make sure your firm owns all profiles and reservation records so you can transfer them to another TMC at the contract’s end.
- Understand claw backs and contingencies linked to any sign-on bonus or upfront incentives.
- Bidders have made a considerable effort to put together a proposal and to respond to your RFP. They deserve honest, general feedback. Treat them with respect; though they may not win, they may in the future.
- If the incumbent does not win the bid, start work quickly on the transition.
- Develop a schedule that clearly defines implementation steps and responsibilities.
- Solicit the TMC’s help with materials for travellers and arrangers. Consider a phased approach at one site, country or region and allow feedback before proceeding.
- Communicate savings and service goals to the TMC and conduct weekly or monthly calls and quarterly account reviews.