Travel Management Companies (TMCs) are intermediaries in the travel industry, specialising in the corporate travel market. They provide a range of products and services targeted to benefit business travellers, whose needs vary greatly from leisure travellers.
In recent years there has been massive change in corporate travel management. This change has come about as a result of consumerisation and advancing technologies. Industry response to the changes can present either a challenge or an opportunity for TMCs. The challenge arises from a refusal to embrace change. While opportunity comes with adaption and revision of traditional approaches.
The trap TMCs risk falling into is assuming that their role in the industry will become obsolete. However, this is simply not true. There’s still a need for TMCs, as long as they move with the times and adjust their service offerings. Corporate travel is steadily rising, with industry revenue expected to grow by 7.2% this year alone. The real test then, will be in how TMCs exploit that market potential.
A major market potential to exploit, exists around airline ancillaries. Technological innovation allows functionality for ancillaries to be purchased separately from airfares. Ancillaries and their prices vary between airlines, causing confusion for travellers. TMCs are familiar with the various ancillaries and their prices. Not only this, but they can also negotiate additional ancillaries for travellers, such as access to club lounges. This added-value servicing offers more for business travellers and makes the use of TMCs more appealing.
Sourcing airfares is becoming a complex exercise for the corporate traveller. Consequently, the need to book through a TMC is more important now than ever before. The transformation of corporate travel presents a clear opportunity for TMCs to leverage new technologies and improve their services. Moreover, it provides an opportunity for the corporate traveller to utilise TMCs to their advantage.