BCD Travel entered into a representation agreement with Connex Travel in June last year to form BCD Travel South Africa giving clients, including a number of multinational companies, enhanced services and global representation with a strong base in Africa. BCD Travel’s MD, Kananelo Makhetha provides insight on the current environment for TMCs.
What, would you say, sets BCD Travel apart from other TMCs?
Our technological ability, global reach and empowerment credentials. Our unique BCD approved Disaster Recovery Programme (DRP). We are one of the few empowered TMCs with this much global reach.
What makes BCD Travel’s technologically superior?
Our data management capability and client data reporting capability. Our automated quality control system ensuring, amongst others, policy compliance and use of client’s corporate agreement, BCD’s People Tracker enables us to track the movement of clients, which is critical for ensuring their safety during travel. Other features include the online self-booking tool, pre-travel reports and electronic scanning and indexing of documents.
What are some of the challenges currently facing TMCs and how does BCD Travel handle these?
The global economic crunch forced clients to cut costs, and they have been increasingly looking at TMCs to assist in cutting costs. This did not necessarily mean reducing the number of trips, but rather being more efficient. We present tried and tested methods of assisting clients in cutting costs like introducing a self-booking tool, improving data management and analysis capabilities, etc.
What are some of the trends currently emerging for 2010?
This year corporates will try to maintain the savings achieved in 2009, with no let up in terms of cost cutting initiatives. There will be a moderate increase in general travel, but the emphasis of managed travel will continue. We will also see a continued increase in the uptake of selfbooking tools to cut travel costs
Don’t self-booking tools threaten the existence of TMCs?
No, revenue may be reduced, but they bring in efficiencies which aid in reducing costs. These tools can’t do everything so there is still a need for TMCs. You can’t replace the importance of human touch. Self-booking tools are also not suitable to all companies. There is a misconception that only using self-booking tools will save money, but TMCs offer existing savings as well as thorough analyses of trends, airfares, travel policies, etc.
Will business travel ever go back to the way it was before the economic crunch?
The cost cutting and efficiencies are here to last, I don’t see business travel going back to the way it was. There will be an increase in business travel, but also an increase in the use of low cost carriers and economy class travel. There will still be space for business and first class, but the ratios are likely to stay with us a little longer.
What services offered by TMCs make them essential?
The ability of TMCs to benchmark amongst their many clients and suppliers as well as being a knowledge base. Our international partners give us access to best practices in terms of travel policies enabling us to improve on systems and processes. Our global reach also lets us assist clients wherever they are 24/7.
Do you think the increasing uptake of video conferencing is a threat to business travel?
The use of video/teleconferencing is increasing and will continue to do so, but nothing replaces face-to-face contact. Video conferencing can’t replace the power of making a deal when speaking in person, although it does present a better way of doing business more efficiently.
And finally, what advice do you have for the industry?
The economic downturn has had a negative effect in that travel managers are focusing more on transaction fees and less on the total cost of travel to cut costs. TMCs’ service fees only account for 3-5% of the total cost. TMCs should work with travel managers to look at how to reduce the remaining 95%.