Africa has many booming economies, enticing businesses to send employees out to close deals and oversee progress. But business travel can be a daunting thing to organise and supervise, especially when there are corporate travel policies, often lengthy and stringent, involved. This is just one of the reasons to partner with a travel management company, as Richard Holmes discovers.
Doing business in Africa is not for the faint-hearted. It can be a hard place to get things done, and while there’s no shortage of opportunity knocking from Nigeria to Namibia, it’s not always easy to reach over and open the door.
And yet, it’s a rare multinational that doesn’t have an eye focused firmly on Africa. Several economies on the continent have growth rates that would make Europe and the USA jealous, albeit off a lower base, and the continent’s mineral wealth seems almost untapped. Wander through the airports in Johannesburg, Lagos, Nairobi, Dar es Salaam or Accra and you’ll hear a multitude of languages as business travellers from across the globe jet into and across Africa with an ear fixed firmly to the ground for the sound of opportunity.
But doing the deal is only half the battle. Outside of the major capitals, even countries brimming with untapped wealth and potential are notoriously tricky to access. Even if there are direct flights into a city, do you know if the airline is safe? Is it advisable to hail a taxi at the airport on arrival? Will there even be a taxi at the airport? Will you need a Yellow Fever certificate? What other health concerns are there? This is obviously particularly topical right now, what with the outbreak of the deadly Ebola virus in West Africa.
These are just a few of the concerns that corporate travellers using a professional travel management company (TMC) rarely have to worry about. While those who prefer to soldier on and book their travel themselves will spend the journey there worrying about their hotel and finding a ride across town, the traveller with bookings handled by a TMC is usually the one relaxing on the flight over, working on a presentation, or mulling over the opportunities and risks of the region.
And there’s opportunity aplenty – for both corporate travellers and the travel management industry as a whole – as global corporations flock to unlock the potential of the African continent.
“Corporate travel to Africa is increasing from all parts of the world, with more and more international companies setting up operations throughout the continent,” says Collin Austen, Business Development Manager at Club Travel, whose corporate division manages travel accounts for a wide range of multinational bodies. “This bodes well for the travel management companies with international reach, whereby one TMC can be appointed to a multinational client whilst the services required are still supplied in-country.”
Although “corporates are keeping a watchful eye on their travel costs, which is always evident when the economy is under pressure, we are seeing an increase in travel into Africa as a result of mining and infrastructure expansion,” says Marco Cristofoli, Managing Director of Harvey World Travel South Africa.
Oil and gas exploration and extraction, along with other resource-based industries, continue to drive much of the growth on the continent, with associated engineering, construction and financial services also proving to be key engines of corporate travel in Africa.
An excellent bellwether of the increased demand for business travel on the continent is the spike in inbound traffic to Nigeria.
“Business travel had previously been dominated by trips exiting Nigeria, in the direction of markets such as the US and Europe, while any inbound business travel was short-stay and specific. Now, the volume of inbound corporate travel has increased dramatically over the past five years,” explains Lola Adefope, General Manager of HRG Nigeria, who adds that as a result of bullish expectations for the economy and the country’s recent inclusion in the MINT (Mexico, Indonesia, Nigeria and Turkey) economic grouping, “a flood of foreign investment has been introduced to the Nigeria market.”
But it’s not just Nigeria that is seeing an increase in business or business travel activity.
“Many of our clients have rapid expansion plans into sub-Saharan Africa and these expansion activities bring with them the need for us to support our clients in consolidating and controlling their travel spend,” says Louis van Zyl, Chief Operations Officer for the Africa Franchise Network of Tourvest Travel Services. The company currently operates in 24 countries throughout sub-Saharan Africa, with a network that “is aligned to the growth and expansion strategies of our global client base… these focus areas currently include, but are not limited to, Ghana, Nigeria, Kenya, Mozambique, Angola and Congo.”
It’s a common refrain from TMCs operating in Africa: where their clients go, they will be right behind them to support their business objectives. The likes of Mozambique, Angola, Kenya, Nigeria, Ghana, Rwanda, Ethiopia and Cameroon are all destinations on the radar of African travel management companies. Everyone wants a piece of the ever-growing pie, as well as the big-spending clients representing that pie.
“BCD Travel now has 25 countries where we are present,” says Kananelo Makhetha, Managing Director of BCD Travel South Africa. “Our expansion programme is informed by the strategic objectives of our global and multinational customers, as well as also strengthening and adding value to our current clients.”
And it’s not just the ‘traditional’ travel management companies that view the African continent as untapped.
“Africa is unsaturated from a commercial perspective,” says Vishal Koovejee, Chief Executive Officer of Salsa Tours, which is an established South Africa-based wholesale outbound tour operator that focuses on “supplying a complete travel solution anywhere in the world”. Salsa Tours is an accredited Association of Southern African Travel Agents (ASATA) wholesale member, and focuses on selling its products and services to the retail segment of the market.
“Some of the clients that we service for travel needs to Africa are active in banking, mining, telecommunications, petroleum and aviation,” says Koovejee. “It is quite apparent from this list of business industries that there is significant interest in infrastructure development across the continent.”
The first question many people ask is simply why a travel management company is needed in the first place. With the explosion in web-based booking engines, it has never been easier to book hotels and flights online, and visa agencies can take care of the paperwork so often required for travelling in Africa. So why spend the time and money on a TMC?
In short, because managing your travel through a professional travel management company allows you to get on with the more important task at hand: running your business.
“Simply put, this is our business and we are the experts,” says Van Zyl. “Corporate travel into Africa does have its share of pitfalls and potential significant costs associated with bad management and wrong decisions. We provide a support service, a strategy and a suggested travel policy to our customers.”
“The core function of a TMC is to provide their clients with control. As companies expand, so do their workforce and travel requirements in searching for and operating in new markets,” says Paulo Correia, Area Manager – Angola for Wings Travel Management. “Control becomes critical when looking at cost savings, efficiency, traveller security and supplier negotiations. A good TMC will position itself as a partner to their client and will oversee all travel-related expenditure and requirements, thus allowing their client to focus on his or her core activity.”
As much as it’s about control, it’s also about balance – balancing the needs of the company and project, the ratio of expenditure and return, and incurring reasonable costs, while ensuring the safety and comfort of employees sent out on the road.
“The role of a TMC is to partner with their client in order to meet the travelling needs of the corporation in the most effective means possible,” says Austen. “The efficiencies are often monetary, with travel management companies having access to or being able to negotiate reduced fares for the client. But this could also be measured against consolidated reporting, traveller tracking, spend consolidation and other factors which may be particular to the client.”
But there’s more to it, according to BCD Travel’s Makhetha.
“At the core of managed travel is the visibility of travel investment in terms of expenditure, expense control and cost avoidance, travel policy adherence, traveller safety and experience and, most importantly, data,” he says. “Travel management companies specialise in helping corporates balance employee needs with corporate objectives by leveraging spend, which in turn impacts the bottom line.”
Essentially, a good TMC is there to ensure that you maximise your travel budget through access to competitive rates, ensure your employees are looked after while travelling on business, adhere strictly to your company travel policy to avoid abuse, and provide a suite of tools to allow you to reconcile your travel spend.
Local knowledge is another key selling point of TMCs, and as “no standardised rating system exists for accommodation in Africa, the TMC can provide insights into the country and advice, as specialist consultants understand the unique challenges of each country,” says Themba Mthombeni, Chief Executive Officer of Duma Travel, which is actively looking at investing elsewhere in Africa, having already established a presence in all of South Africa’s major economic centres.
“A central feature to our approach of selling travel arrangements in Africa is to adopt a close working relationship with people on the ground, in that country, who can assist as and when required,” says Koovejee. “We also ensure that our hotels are paid in cash, generally, so as to avoid additional delays, uncertainties and opportunities for fraud that avail when using credit cards as a form of payment.”
While much of this applies for corporate travel worldwide, the need for expert advice is heightened in Africa, particularly for travellers unused to traversing the continent. Many corporate travellers fail to recognise that getting from A to B isn’t always a simple matter in Africa – it may require stops in C, D and E along the way, and there may be plenty of red tape to negotiate en route. Whether there’s a seat available in Business Class is often the last thing you’ll need to worry about.
Perhaps nowhere is this truer than Nigeria, where the unique and challenging environment provides TMCs with plenty of opportunities to advise and add value.
“First time corporate travellers often experience ‘culture shock’ on arrival in the country,” says Adefope. “A detailed welcome and introductory letter on arrival detailing what to expect, secure or armed transfers in volatile areas, and information on transactions and spend data have proven invaluable. A TMC in-country is able to pre-empt and weigh factors that a travel booker from a ‘travel hub’ would not be able to anticipate.”
For instance, merchants do not accept many corporate payment cards – that’s despite the Nigerian government’s plan to move the country towards a ‘cashless’ society – and there is almost no public transport infrastructure suitable for corporate travellers. Numerous hotel properties and airlines are not affiliated with major global distribution systems, and extensive local knowledge can help smooth the passage for expats on long-term contracts.
“HRG provides protocol offices at all major international and domestic airports in Nigeria and have a wholly-owned immigration and visa section, with personnel who will accompany travellers to the embassy and consulate to ensure that all is above board and progresses smoothly,” adds Adefope.
“Travelling within Africa is a lot more complex than travelling on other continents,” agrees Van Zyl, who says that convoluted itineraries aside, “most African countries require visas and there are health requirements to bear in mind. Working with a TMC makes for a simpler booking process and also ensures that the travellers receive all the necessary information, are pro-active, and can be tracked in case a situation arises where their colleagues need to contact them urgently.”
Duty of Care
With the often-complex travel situations found on the continent comes a duty of care on the part of both employer and the TMC, and a key question clients should consider asking is what resources and assistance are available when things go wrong – when an employee is stranded by a bankrupt airline, when a health scare like the current Ebola outbreak makes returning home difficult, when a mugging leaves the traveller with no money, identification or means of communication. What capabilities does your TMC have at their disposal?
“Travel management companies should have a duty of care, if they want to offer the best possible service to their customers,” says Cristofoli. “The support comes from the very first interaction with a consultant giving the correct advice to the traveller and then assisting 24/7 with all support necessary – be it emergency assistance whilst away to ensuring last-minute changes to itineraries can be facilitated quickly and efficiently.”
“Business travel to any part of the continent is not homogenous, has risks and changes constantly. Travel professionals need to be equipped to provide the best advice for travellers, be it visa requirements or health risks,” says Makhetha. “We encourage our clients to include in their travel management programme better management of risk, which should include traveller location identification, traveller emergency assistance and traveller emergency evacuation services.”
Having staff on the ground or a trusted network partner in the region your business is operating in is a key consideration, as is the depth of traveller tracking and emergency support.
Nigeria, for example, has long been a challenging destination for business travellers, with many parts of Africa’s most populous nation volatile for foreign travellers. For all but the most straightforward visits to the country a TMC with extensive local experience is essential.
“Reputable TMCs have disaster recovery plans as well as documented emergency evacuation plans which are communicated to all clients,” explains Adefope. “There are several security firms in-country – such as Pilgrims, which HRG Nigeria work in partnership with – and many companies also sign up with these firms to ensure that their travellers have an evacuation plan should the worst happen.”
“We take the view that we have a partnership with our clients, in terms of travel risk management and the duty of care that is part of that,” adds Correia of Wings Travel Management. “This is where our real-time traveller tracking comes into play, in terms of supporting our clients who operate in volatile areas.”
“When civil unrest – or any situation posing risk to travellers – occurs, Wings is able to run real-time reports on where all our clients’ travellers are, and provide immediate logistical support. The majority of our clients, especially in the oil and gas sector, have their own on-the-ground teams that look after their staff from a health, safety and environment perspective. We work hand-in-hand with them to support their travellers.”
Duty of care is clearly an issue all the major TMCs have addressed and need to be cognisant of when pitching for big business.
“With its comprehensive suite of safety and security products and services, CWT is generally able to anticipate disruptions to travel, locate travellers quickly, communicate with them via various channels and, ultimately, assist with rebooking or evacuation from high risk areas if necessary,” adds Ben Langner, Managing Director of Carlson Wagonlit Travel South Africa.
Sign Me Up
OK, so you’re sold. A travel management company is for you… now what?
The first step is to remember that TMCs are not created equal. Travel management companies are structured in a variety of ways, whether it’s affiliated networks that spread the net far and fast using a symbiotic partnership of independent agencies and joint ventures deals, or franchise agreements under a well-known brand.
Travel management brands like Duma Travel spread their network through a combination of joint ventures and partnerships, ensuring they have a footprint in countries where corporate travel spend is growing. BCD Travel similarly seeks both partnerships and joint ventures, many of which are owner-managed.
“The benefits of this model are the reduced cost of entering a new market, gaining local expertise, and being in the position to service our customers throughout their markets,” says Makhetha of BCD Travel. “The TMC industry in Africa is evolving rapidly, and more and more generic travel agencies catering for corporate travel are beginning to realise the value of being part of a global network.”
Similarly, the expanding reach of HRG – a travel management company headquartered in the United Kingdom, but operating in over 120 markets worldwide –is a sign of business confidence in Africa. Through partnerships with local TMCs, HRG operates a network of affiliated agencies in nearly 30 African countries, managed out of South Africa.
“Working with a TMC also provides a global standard of service expectation, irrespective of ‘indigenous factors’, as well as access to global rates and fares,” adds Adefope from HRG Nigeria. “For business travellers, working in and around Africa may be quite costly, but a TMC is able to provide multi-destination value and capped rates to travellers based on consolidated negotiation.”
Carlson Wagonlit Travel has partner offices in more than 40 countries across Africa, explains Langner.
“The CWT Global Partners Network (GPN) works very well together in servicing the company’s corporate travellers, attending to the special needs and demands of ‘road warriors’ working in Africa, and providing significant on the ground support whenever it is required,” he says.
Likewise, Club Travel is a member of the GlobalStar Travel Network which has partners based in Kenya, Zambia, Uganda, Tanzania, Angola, Nigeria and Mauritania.
Taking a slightly different tack, Tourvest operates a franchise network outside of South Africa and Nigeria.
“Our franchises are independently owned and operated,” says Van Zyl. “With American Express Travel Services South Africa, Tourvest holds the master franchise licence for sub-Saharan Africa. We have a unique structure in that our sub-Saharan Africa Partner Programme is managed by a dedicated team in South Africa, which reports into a global network management team.”
“We also see the quality and experience of our network partners as a key differentiator,” he says. “Our partners are the core of our network and are selected according to stringent criteria. Over the years we have built strong relationships with them and we have come to rely on their ability to service our customer base with the quality and consistency of service we would like to offer our customers.”
However, American Express Travel Services isn’t the only string to Tourvest’s bow. As one of the largest tourism groups in Africa, the conglomerate manages over 50% of all corporate travel spend in South Africa via a variety of companies. That includes ‘high-street’ brands Seekers Travel and Maties Travel, both of which offer travel management services, expense reporting, travel policy adherence and traveller tracking to corporate clients.
Independent Travel Consultants
This has become very topical, certainly in the South African market, as some consultants seek greater flexibility and independence, whilst the large TMCs have had to figure out whether or not they are prepared to let valued consultants go, or are willing to keep them in the system.
Are these ITCs a threat to the corporate accounts of certain TMCs? And what are the benefits of going this route, particularly for the customer?
Independent travel consultants are an option, particularly for small businesses that don’t have the travel spend to justify engaging a dedicated travel management company. While ITCs are likely to offer personalised one-to-one service, it’s vital that companies carefully consider what their travel needs are and what the ITC is able to offer.
For straightforward bookings and travel expense reconciliation, an ITC may well be sufficient for your requirements, but if employees are likely to be travelling to volatile areas where in-depth knowledge, a local presence and emergency back-up are required, a TMC with wider resources might be preferable. ITCs may also not be able to offer sophisticated expense reconciliation and automated adherence to travel policies.
It’s also key to ensure that your chosen ITC has access to discounted fares that are usually only made available to larger groups that can command discounts on the basis of consolidation. The likes of Club Travel, eTravel and Travel Counsellors offer branding, consolidated fares and back-office support to ITCs, so a well-chosen consultant affiliated to a larger consortium might offer the right mix of personal attention and travel technology to suit the needs of a small or medium-sized business with modest travel requirements. As always, it pays to do your homework.
A further option is the likes of Salsa Tours, a travel wholesaler. Wholesalers are the unseen fixers of the industry, sitting between the travel suppliers flying the aeroplanes or running the hotels, and the end-consumer making a reservation through an agent or TMC.
The wholesale concept applies as easily to travel as it does to retail – the wholesaler buys product in bulk from the supplier and takes a small commission on-selling it to a customer – either the end-consumer or a middleman retailer – at a discounted price. The supplier is happy because airline seats, for instance, are sold quickly, and the agent is happy with the lower price to offer to a smiling end-consumer who gets a good deal. Everyone’s happy.
Salsa Tours has long operated as a travel wholesaler, using its Travel Beat software to service corporate clients. But now the company is “in the process of deep transformation,” says Koovejee, who wants to see the company go from a “regionally-based travel wholesaler, to an international global travel wholesaler.”
Lastly, you have the likes of Wings Travel Management that follows yet another model – all of its global offices, including the African operations in South Africa, Angola and Nigeria, are wholly-owned by the company ensuring a consistent product and service level whether you’re in New York, Nigeria or Gauteng’s northern suburbs.
“We made a commitment long ago that, as we grew, we would open offices in the places that mattered most to our clients, and that we would wholly-own those operations,” says Correia. “Our customers are comprised of service-critical businesses where travel is an integral part of their business model, so we want to assure them of the highest level of quality and service consistency that we can. With ISO 9007 certification, all our locations are process-driven to ensure consistency in everything we do.”
It’s a key point, for while a wider network of affiliated TMCs may offer a broader reach, there may be different processes, procedures and service levels from one country, and company, to the next.
That certainly won’t apply to all franchised operations, but it pays to ensure your travel management company operating within a wider network can commit to a common level of service, regardless of location.
Specialist knowledge of the destination is also vital, and growing a dedicated service offering is becoming a hallmark of TMCs staying ahead of the curve.
Salsa Tours has a dedicated Africa division that can service over 40 countries across the continent. Duma Travel operates specialist Meetings, Incentive, Conference and Exhibition (MICE) and Sport Travel divisions. Tourvest Travel Services also has a dedicated meetings and incentive division, alongside a team focused on servicing the VIP travel needs of chief executives, board members and high-flying business travellers.
“We have also identified industry verticals into which our clients can be categorised. Where the nature of the industry vertical warrants it, we have structured our corporate travel service offering in such a way to offer a specialised service for those industry clients,” explains Van Zyl from Tourvest. “One such example is oil and gas, where the travel management requirements are different enough for us to invest in a staff complement and technology that are specialised in this industry and can adapt our service accordingly.”
Much of Africa’s economic growth has been driven by the surge in petrochemical exploration and extraction, and the continued growth of the lucrative oil and gas industry has even seen travel management companies upping their game to keep clients happy.
“We have a specialist oil and gas division for our oil and gas clients, who differ considerably in terms of their requirements from other corporate or government clients,” says Correia from Wings. “We’re so invested in this industry sector that we’ve established the Wings Energy Academy, a year-long in-house educational programme that teaches our staff about the ins and outs of the oil and gas industry, with a special certification upon completion.”
Bridging the Digital Divide
As business travel becomes ever more connected, whether in the office or on the road, the technology offerings of travel management companies are likewise becoming a key point of difference between companies vying for your travel spend.
“Technology has made the services of the TMC more accessible and has provided different platforms on which these services can be reached. Technology has also ensured that communication with travellers and clients is better and more effective,” says Mthombeni from Duma Travel. “Through technology, TMCs are now able to provide critical data in a timely fashion, so that clients can make better business and travel decisions.”
Further to that, there’s clearly an incentive out there for TMCs to develop their own digital products.
“Over and above the power and security of the American Express business travel brand, we believe that our technology is one of the key differentiators,” adds Van Zyl from Tourvest. “We have developed ‘technology for Africa by Africans’ and offer technology that we know will cater for our markets. For instance, we have introduced solutions like our travel portal, our online booking platform and a comprehensive African reporting strategy. These are unique solutions at our customers’ disposal that are all developed internally, catering for the particular challenges and nuances that corporate travellers into Africa need to deal with.”
Carlson Wagonlit Travel has also invested heavily in sophisticated management tools, including the CWT Program Management Center, CWT Program Messenger, and CWT-to-Go.
The Program Management Center is “an online travel management information centre that visually illustrates a corporate client’s programme performance against desired goals,” explains Langner. “To improve performance against corporate objectives, the CWT Program Messenger – a messaging tool – can be used to send customised messages to individual travellers to correct non-compliant travel behaviour.”
For keeping tabs on travel arrangements while on the road, the award-winning ‘CWT-to-Go’ mobile application automatically syncs itineraries with calendars, notifies travellers of flight changes or cancellations, provides useful destination information, and offers seamless communication with Carlson Wagonlit Travel staff for assistance with rebooking and other travel needs.
Wings has also applied a digital solution to a very real problem: keeping tabs on travellers flying with Africa’s many airlines that don’t fall under the major global distribution systems (GDS).
“In general, all bookings made in the GDS can be handed off to travel security services such as International SOS for additional traveller tracking and support to our clientele. However, this only includes carriers in the GDS,” says Correia. “Wings Travel Management has closed this loop by developing a process to hand off the non-GDS data to third party security service suppliers. It addresses that ‘black hole’ in terms of tracking travellers in Africa.”
“Also, some of those non-GDS carriers can only be booked in-country, so you have to have a direct, local contract with them, which we do. Because we’re there in country, we’re managing that process all the way through for more effective travel risk management.”
Adding Up Those Dollars and Rupees
Seamless bookings, security and on-the-road communication aside, post-trip analysis is where TMCs can really prove their value, through technology. Analysing travel spend and adherence to corporate travel policies, as well as reporting and reconciling spend, is a key role of travel management companies’ technology offering, allowing clients to monitor and maximise their ever-shrinking travel budgets.
While Salsa Tours is looking to spread its wings to individual travellers, the reconciliation software within its Travel Beat product provides for deep-level corporate reporting.
“This software will offer effective, detailed, and world class formats,” says Koovejee. “Our entire reporting module was built under close supervision and direction from market-leading forensic consultants, with the result that our system has been approved for use in banking environments as well.”
“With the advent of technology and sophisticated travel software, a TMC is expected to play a more active role within the client’s travel environment,” says Koovejee. “We are finding that the biggest selling point for Travel Beat is the reporting functionality that has been built into the system. Advanced dashboards make it very user-friendly to be able to monitor and account for every Rand spent on travel.”
Similarly, Club Travel now offers clients the iBANK MIS tool from US-based Cornerstone Information Systems. According to Cornerstone, the system captures travel data from a variety of sources, including all major GDS operators and back-office management systems. Customers then have access to their data via secure internet access, allowing them to view travel spend, measure the use of preferred suppliers, track the travel behaviour of employees, monitor policy adherence and improve profitability.
“iBank allows the client to log onto real-time reports, allowing not only post-travel reporting, but also pre-trip, as well as traveller tracking for duty of care,” says Austen.
The depth of technology offering will vary according to the reach and experience of your chosen TMC, but the top-end offerings will cover everything from personalised profiles for each traveller to mobile access to itineraries and trip information, carbon footprint monitoring, travel policy adherence and automatic reconciliation of travel expenses. Increasingly, these services are moving into the cloud and onto mobile devices too, allowing for easy access on the road.
“Online tracking of invoicing, as well as online travel management reports which can be accessed at the touch of a button, allows for more efficient management and reconciliation of corporate accounts and spend,” says Cristofoli from Harvey World Travel South Africa.
Return on Investment
A common reason businesses – particularly small and medium-size enterprises – shy away from the use of a TMC is the perceived increase in travel expenditure. However, the opposite is usually the case, with the in-depth industry knowledge and preferential access to rates allowing for a saving that more than offsets the hard costs of using a professional management company.
“The fees and charges related to the service a TMC provides to a client typically make up less than 7% of total travel spend,” says Van Zyl. “This needs to be measured against the potential savings and value that a comprehensive travel management service can realise.”
“TMCs also have the ability to provide quality data that gives corporates valuable information on travel spend and opportunities to reduce costs further, through correcting their buying patterns and improving their travel policy. The evidence is quite clear – the value the customer receives usually far outweighs the charges for the services provided.”
“Service fees traditionally make up less than 5% of the corporation’s travel budget, and savings are best found in the remaining 95% of the spend,” says Austen. “That being said, the added value that a TMC brings when they partner with a corporation far outweighs the cost to the client for these services.”
Enabling relationships and partnerships between TMC, supplier and client is also key, suggests Makhetha from BCD.
“Sound relationships are vital to the success of a successful corporate travel programme. A well-managed corporate travel managed programme pays for itself, and corporates can realise up to 20% return on travel investment by working with a TMC.”
In an ever more competitive field, the best travel management companies are highly aware of offering value to their clients, providing a clear correlation between fees and output.
“At Wings, we often talk about the iceberg effect – 90% of the actual travel costs are often below the line and not so visible, but they can certainly ‘take you down’,” says Correia. “Through effective data and analytics, we help our corporate clients identify these hidden costs, which enables them to zero in on opportunities for effective cost-reduction, thereby positively impacting their bottom-line. This often involves multiple ‘buckets’ of spend such as airlines, hotels and car rentals. At Wings, our value is demonstrated by directly aligning with our clients, and not merely acting as agents or distribution channels for their suppliers.”
And that is, perhaps, precisely the essence of what a travel management company should offer. The multinational offices or network affiliates, the personal service or state-of-the-art technology offerings are all just enablers, or tools, to get the job done. At its core, what a TMC should offer is a knowledgeable, well-connected partner; a travel industry professional that takes the hassle of international and domestic travel off your hands, allowing you to get down to business.
A Client’s View…
With over 800 staff in nine offices spread across South Africa, and projects on the go across the continent, civil and structural engineering company WSP in Africa spends plenty of time – and money – on travelling in Africa. Business Traveller Africa asked Commercial Manager Virginia Strong about the ins and outs of using a TMC…
Q: What volume of corporate travel do you book per month?
A: Our monthly travel spend is in the region of R1-million – approximately 800 trips a month.
Q: How did you operate before joining a TMC, and what made you change?
A: We had a TMC before, but when I was tasked to reconcile the monthly travel spend I was unable to do so. Other than the financial discrepancies, the operational day-to-day issues also mandated a full-time approach that was not acceptable given my view of a role of a TMC. Travel must just happen seamlessly – 24/7/365!
Q: Has the business environment changed, requiring the use of a TMC?
A: I don’t see it as a reason due to a change in business environment, but more a focus on our core business of which travel forms an essential means to reach and provide exceptional service to our clients, but not something we need to focus our business effort on. It is an expensive and essential support service that requires expertise offered by a well-selected TMC. We also have better economies of scale using a TMC, where our travel spend pales in insignificance due to the size of Wings’ other clients… another reason to choose your TMC wisely. They can by far negotiate better deals for us based on consolidated buying power.
Q: What other advantages have you found from using a TMC?
A: Our TMC provides a user-friendly Amadeus-based online booking tool (OBT), adapted to WSP’s many specific needs and strenuous controls. They have also trained a team of 30 travel bookers at WSP’s countrywide offices to effect all domestic bookings on the OBT. Follow-up training sessions are arranged as the need arises. There is also independent and unemotional enforcement of our travel policy, where I have the final say in exceptions. ‘In policy’ transactions are automatically approved, but the OBT flags any transaction that contravenes WSP travel policy for my attention, at the same time offering travel bookers computerised fields to explain why an ‘out of policy’ action is necessary. Then there’s the online system’s ability to track and allocate expenses per division, as an overhead or project related, and that all the information is pulled through to financial statements in order to recover project-related travel. The OBT has a very efficient data-tracking system, so where we know where our staff are at the click of a button. So at times, such as with the Ebola outbreak in West Africa, we are aware of exactly who has booked to go where, can ensure that the travel risk assessments have been conducted and, in consultation with SOS International, that these countries/areas are safe for travel. There is also an after-hours number in case of emergency, when travel arrangements need to be made or changed at short notice. International bookings are high-touch transactions, made by dedicated senior consultants who ensure that passports, visas and vaccinations are in place. Travel bookers submit requisitions to the TMC, once again customised and bearing the necessary divisional cost centre codes for report allocation. I also get a daily report of which staff member will be travelling where in a week’s time. There are also individual financial reports on a monthly basis to monitor performance, as well as carbon emissions reports.
Q: Financially, what benefits have you seen?
A: There is definitely easier reconciliation of expenses. I get bi-monthly and monthly reports including all the invoices reconciled between the credit card statement and the travel booked. All travel is guaranteed to be within travel policy, unless there are extenuating circumstances, which takes the emotion out of being away from home, whilst we still ensure the safety and comfort of our staff.
Is Smaller Better?
When looking for a travel management partner, most businesses will first think of a large multinational company with distributed offices and sophisticated back-end technology. But, as Cape Town independent travel consultant Jean-Pierre Brink argues, sometimes smaller can be better…
Q: Firstly, tell me about your corporate clients…
A: I have a few small businesses that I work with, but my biggest corporate client is an American multinational company with an office in Johannesburg. I look after all the South African business for them, and the majority of their bookings are international Business Class flights.
Q: What can an independent travel consultant offer over a travel management company?
A: The biggest difference is what I call true 24-hour service. If any of my clients phone me after-hours they get to speak to me. When you call the bigger TMCs you’ll reach an after-hours consultant or, even worse, a large call centre. They then have to look at profiles on the system to try and help the client, whereas I look after that client personally and I understand their travel needs. There’s also a greater element of trust, because I deal with them on a day-to-day basis. Lastly, if an independent consultant loses a large corporate client it’s a major blow, so independents will work harder to give superb customer service all the time.
Q: Corporate clients always want the best deal. Are independent consultants able to match larger TMCs on fares and rates?
A: The larger clients tend to negotiate their own deals with suppliers. They know where they travel to and negotiate accordingly. Smaller clients don’t have enough spend to negotiate their own rates, so would rely on the travel agent’s rate. The key here is to work with an independent consultant that has access to a wider network. I work under the umbrella of Club Travel, which has larger purchasing agreements I can access for my clients.
Q: What about when things go wrong? Do you have the capacity to help clients anywhere in Africa?
A: Club Travel is part of the GlobalStar group, which allows Club-branded consultants like myself to tap into the network of consultants across Africa. I’ve had cases where clients travel into Africa and need transfers between two countries. I’ll ask our partner agencies from the GlobalStar group in the relevant areas for assistance.
Q: What about reconciliation? Are independent consultants able to offer the same level of cost control and expense reconciliation as larger TMCs?
A: At the end of the day I’m a travel agent, not an accounts person. But I’ll look at my client’s statements and cross check the transactions on their credit card with the travel spend, to ensure the spend and the travel match up.