Here to stay

Technology and value keep TMCs relevant

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There was a time, not all that long ago, when a travel management company (TMC) was little more than a booking agent, taking care of the hotel and flight bookings before sending their invoice. But, with the world of corporate travel fast evolving, TMCs have grown to become a valued partner in any business’ value-chain ecosystem.

“They will look at their client’s ‘big picture’ objectively, taking into account a business’ goals and vision, the common areas of friction within its current process and the supporting data,” explains Oz Desai, General Manager of the Flight Centre Travel Group’s Corporate Traveller brand. “It will evaluate every step of the travel journey, from planning to reporting.”

But it’ll cost me more money, is a common grumble from those holding the purse strings. A crucial talking point for travel management companies to communicate to clients – and for corporate travel managers to understand – is that value does not equal price.

“It’s not just about the lowest price,” says Frank Palapies – CCO for Wings Travel Management. “It’s very much about providing full travel management support as cost effectively as possible, without comprising on traveller safety. Our role as a TMC is not just to book a flight or hotel, it’s the service we provide in terms of managing travel disruption, expert advice and support if clients are sending travellers to high risk destinations, providing reporting and analytics to understand their travel spend, arranging visas, and emergency out-of-hours travel support around the clock.”

“While competitive pricing is important, our value to clients goes beyond that, including working with clients to jointly set travel programme objectives that support the client’s strategy, and helping them achieve and exceed joint targets,” says Kananelo Makhetha, Chief Executive Officer of Club Travel Corporate, which operates in over 85 countries through a partnership with GlobalStar.

The notion of what drives value is also changing, say industry insiders.

“The huge value provided by TMC’s is not in question,” says Vicente Bosque, Commercial Director Business Travel Africa at Amadeus. “However, the way that value is delivered is being redefined and TMC’s are adapting or will need to adapt.”

Historically, the buying power and negotiating leverage of large travel management companies made for a compelling argument when it came to the simple cost of corporate travel, but “value is not about the lowest ticket price,” says Lloyd Barkhuizen, FCM Travel Solutions’ head of sales for the Middle East and Africa, which recently expanded its footprint in Africa with partnership agreements in four additional countries, including the Democratic Republic of Congo (DRC), Gabon, the Republic of Congo and Ethiopia. “While most companies focus on bottom-line costs, the easiest to measure and understand, value will determine the health and well-being of a company in the long term.”

Every TMC is currently under pressure to showcase its value to clients due to enhanced technology available in the market and disruption from new distribution channels.

“This requires a consistent approach in terms of managing the client’s travel spend and demonstrating the true value of a partnership,” says Palapies. “TMCs have a responsibility to constantly improve in line with the new technology which is being made available on an almost daily basis.”

Make better decisions on spend

For an end consumer it is incredibly daunting to navigate through the jungle of travel available content, but this is precisely where TMCs shine.

“By consolidating, providing admin support in terms of reporting and invoicing, we can provide this infrastructure locally and globally,” says Palapies.

“We see value as the benefits and concrete advantages that far exceed the cost of the service to our customers,” says Louis van Zyl, Chief Executive Officer of CWT. “We provide valuable insights and analysis capabilities… which in turn puts them in a position to make more informed and better decisions regarding the management and control over their corporate travel programme.”

While once simply removing the bureaucratic pain-point of completing a booking may have been sufficient to justify using a TMC, with the advancement in booking technology those mundane elements of corporate travel are increasingly accounting for a shrinking slice of the value on offer. Instead, personalisation is a key area for TMCs to create true value for customers.

“Focus on the areas of the corporate travel spend that are really growing and that most TMCs have not yet focused on… maximizing on hotels, transfers, and restaurant bookings, airport parking, visa handling and ancillary services,” says Bosque. “Technology is fundamental for any TMC that wants to succeed, but a personalised customer service is also very important. TMCs need to find the best way to automate the predictable, so they can humanise the exceptional.”

Club Travel Corporate takes a similar approach, with the increased adoption of technology to automate simple processes, while simultaneously enhancing the value of corporate travel programme.

“Frictionless automated travel booking tools are helping us make routine tasks – such as travel requisition and approvals, policy compliance, interactive itineraries and cost management – more efficient,” says Makhetha. “Clients expect transparency and we cater for this with insightful, real-time data analytics and expense management and reporting tools.”

Replacing inefficient travel and expenditure processes with automated systems “creates savings in time and labour, as well as optimised productivity and greater transparency,” adds Barkhuizen. With a suite of products known as FCM Connect, the company offers “custom data analytic dashboards that integrate compliance with historical and up-to-date T&E data. Not only can this dashboard help managers detect programme leakage and missed savings, but it also saves time otherwise spent with manual reporting.”

“Technology solutions are important, but they still need to be balanced with consistent personal service and the expertise of our people,” says Palapies. “We offer booking tools, but not all clients business travel lends itself to being booked via these online tools. Most of our clients need a blended solution of online and offline service.”

To help clients manager their spend, Wings uses a reporting tool called goData – a cloud-based business intelligence solution, powered by WebFOCUS, which aggregates data within seconds. It provides drag-and-drop fields to design bespoke reports on any device with multiple traded currencies; currency conversion in real-time; booking data that is only one hour old; and cost per mile index.

A holistic approach to travel

Another key trend is the move towards an ell-encompassing ethos when it comes to corporate travellers.

“Companies send employees out to travel because it provides value to their business. To achieve this value, the traveller needs to be in top form. This is where a holistic travel management programme becomes especially valuable,” says Desai. “Not only will a TMC put the measures in place to keep employees safe and find the best pricing strategies for the business, they will also be able to reduce traveller friction and make sure the traveller has a seamless and pleasant travel experience by providing relevant advice.”

After thorough research into the key pain-points for business travellers – from booking classes to flight times, choice of carrier to weekend travel – “we found that, in some instances, changing an element of the policy to give travellers greater allowances resulted in higher traveller satisfaction and created great value for business travellers, while cost increases to the programme were minimal,” says Barkhuizen.

Part of that is recognising that corporate travellers are not – shock, horror! – only thinking about business when they’re on the road. ‘Bleisure’ – combining business travel with leisure time – is key for many globetrotting executives, and TMCs should be aware of the need to allow time for executives to decompress. That could mean partner fares for airlines, hotels with the flexibility to accommodate a family joining at a later stage, or simply suggesting local restaurants that fit the profile of the client on the road.

Sustainability is another touch-point that TMCs will need to keep an eye on in the future, adds Makhetha: “Business travellers are more mindful of their environmental footprint. They are actively seeking out products and establishments that reflect their eco-conscious values and demonstrate an authentic drive to minimise the environmental impact of travel.”

While the European trend of flygskam – or ‘flight shame’ – won’t have as much resonance in Africa, with its lack of landbased alternatives, corporate travellers will increasingly look to properties reducing their carbon footprint in terms of energy, water and plastic.

Click tap fly

Unsurprisingly, technology is continuing to play an increasingly important role in catering for these client needs. Whether it’s artificial intelligence or data mining to improve efficiencies and cost savings, a multi-faceted approach to travel-tech is key to keeping pace with modern-day corporate travel.

Travellers now have access to a range of consolidator platforms where sourcing relevant content has become increasingly easier as well as cost effective.

“Technology dictates new levels of efficiency and delivery of content to clients, and often becomes the most critical aspect of delivering this service,” says Palapies.

“Technology plays a crucial role in enabling us to provide the best service at the most competitive price,” says van Zyl. “CWT’s focus is on a well-integrated and seamless technology platform leveraging online and mobile developments to the best effect to our customers.”

To improve responsiveness to client queries, Corporate Traveller has launched a travel chatbot – Smart Assistant for Mobile, or Sam:] – for its customers across South Africa.

“Sam is programmed to keep travellers updated at all times, from weather updates at the destination to information on the traveller’s departure gate, flight time changes and where to collect baggage,” says Desai. “The app will also suggest which restaurants and attractions to visit, alert travellers about traffic delays and will soon be able to connect travellers with a consultant via a live text or phone chat if the need arises.”

FCM also launched ‘YOUR.CT’, “a technology platform that gives bookers, travellers and managers a single access point, via their customised dashboard, to functionality and information that is relevant to their business travel needs,” says Desai.

For those in the travel management industry, another tech-trend to watch is the emergence of the major online giants launching services in this highly-competitive space.

“These players are ‘not yet’ present in Africa, but they will come, especially into South Africa, which is the 15th biggest corporate travel market in the world,” cautions Bosque. “We think TMCs and corporations should respond to this by identifying the self-booking tool that better fits their need and start putting customers into this type of operation to gain expertise and confidence in this operating model.”

It’s a salient point, and a trend to watch, but there’s more to correctly managing corporate travel than sturdy tech in the background. In travel, context is key.

“Tech-focussed companies bring innovation, but legacy travel companies bring years of travel experience,” says Desai. “One of the main advantages of the ‘technologisation’ of the travel industry is that it allows travel companies to drive personalisation for travellers in unprecedented ways.”

And managing corporate travel in Africa isn’t only about finding the best tech solution for maximising that travel budget. As travel managers take their Duty of Care ever more seriously, the safety – and comfort – of their travelling executives is of increasing importance.

That Duty of Care takes on greater significance for corporate travel in Africa, than in many parts of the world, making the services of a qualified travel management supplier all the more important. With the majority of South Africa’s outbound business travel looking north into Africa, working with the right TMC will ensure the correct health and safety recommendations for hotels, security assessments, and assist with crisis management protocols for when things (inevitably) go wrong. Many global TMCs rely on local partner agencies in Africa to supply services.

“In our experience, there is very little alignment between the services offered by the global TMC and their partners in Africa. This often results in frustrating inconsistencies with processes, data capture, reporting, service levels, and most importantly, traveller safety and risk management,” says Palapies. “This is why Wings only operates wholly owned and managed offices in Africa. We have our own operations in South Africa, Angola, and Nigeria.”

These are important considerations, but there is also an upside, says Van Zyl. “Although travelling in Africa could bring the element of the unknown into contention, travel options are often more limited than in more developed parts of the world making travel procurement slightly less complex.”

But “the lack of efficient infrastructure in Africa combined with the lack of airlift can be problematic for business travellers as it can lead to long travel times and insecurity,” says Desai. “While Africa is increasingly breaking down the barriers to travel, the region is still renowned for its lack of visa openness. A TMC can be an invaluable partner to help travellers obtain their visas within the required timeframes and offer much needed information on required documentation.”

While data and lower prices are relatively easy to come by, the key word here is ‘partner’. Whether it’s about maximising value, or keeping staff safe on the road, including a competent travel management company in the fabric of the business is key to getting the best bang for buck from that corporate travel budget.

The COVID-19 effect

At the time of going to press the global travel industry was already reeling from the impact of the coronavirus spreading worldwide, and the ongoing crisis is sure to hit corporate travel hard as companies rein in all but essential business travel.

“The COVID-19 outbreak is a global crisis that is testing the resilience not only of the airline industry but of the global economy,” said Alexandre de Juniac, Director General and CEO of the International Air Transport Association (IATA). “Airlines are experiencing double-digit declines in demand, and on many routes traffic has collapsed. Aircraft are being parked and employees are being asked to take unpaid leave.”

With major brands such as Amazon, Facebook and Sony shuttering offices and restricting corporate travel, a similar impact is likely to spread to Africa as companies exercise an abundance of caution in their duty of care to employees.

“We have noticed a reduced demand for travel to the East and some European countries,” notes Makhetha. “We are hopeful that COVID-19 will be under control soon, as the longer it remains a global problem, the more devastating it will be for the entire travel and tourism industry.”

“We do expect a large impact on corporate travel over time, adds van Zyl. “Corporates are starting to mandate travel freezes and a situation of only critical travel. Cancellations are starting to become prominent and we will only see where this is heading once it becomes known how much the continent is actually affected by contractions.”

“It is more important than ever for companies to consolidate all their business travel bookings via one TMC who can provide expert travel risk management and traveller safety support,” says Palapies.