In the latest edition of the BTE Town Hall, our panelists included three travel experts: Sean Parham, senior travel services manager at Discord, Nicole Del Sesto, travel manager at Applied Materials, and Martin Warner, a principal at MW Travel Consultancy. The Company Dime’s David Jonas reports:
New problems, and old ones with new wrinkles, are challenging those who serve the travel management function. They must focus on savings and safety while ensuring a solid experience for traveling employees as supplier strategies evolve and technology advances. For most travel programs, travel management companies are the foundation for much of that. They act as a central node for management infrastructure, employee booking activity and data aggregation. Today's content acquisition challenges, ongoing data aggregation issues and altered industry economics raise questions about the current and future value of the TMC.
That a managed travel program intersects with everything inside a company is unchanged. The travel department helps to monitor spending and employees' whereabouts, and promotes company values. Shifting traveler demographics, threats of disintermediation and other realities of a post-pandemic world reinforce the need for travel managers to be effective communicators.
"We are teachers," said Sean Parham. "We are an ambassador to the company. We are that person who stands between airlines, hotels and TMCs, and our own company. We are that bridge."
Parham has made a career out of building travel programs from the ground up at tech startups with young workforces as he is doing in his current role at social platform provider Discord. For his employers, Parham said, it was always less about managing spend and more about providing a good experience for employees. He wanted Discord travelers to have autonomy and to book directly with suppliers if they preferred. Ultimately, he proposed to leadership a managed travel program, primarily due to the unforeseen.
"When they book on their own, maybe they save money, maybe they have a good experience, but when we have a snafu like a bad storm or airline strike, who is going to help them?" he asked. "We still have to have that TMC relationship and a managed travel program to support travelers," Parham said.
"As the supply chain makes it easier to book direct, it's really important for us as travel managers and the TMCs as our partners to show the value of managed travel in every aspect of what we do," said co-panelist Nicole Del Sesto of semiconductor maker Applied Materials. "You can't just say to a traveler, 'We need your safety and security info, so you need to book with our TMC,' because that information can be gotten anywhere. We need to re-evaluate on a daily basis the value that we are bringing to our corporation, and more importantly, the value that we are bringing to our travelers."
Del Sesto highlighted the need for communication plans that account for generational differences among traveling employees. "We start to become psychologists and people experts as well as travel managers and educators," she said. "We have started in the last year to take a more active approach on a booking-by-booking basis to ask, 'Why did you book this hotel that's not preferred?' or remind them to book the hotel through the TMC."
On top of the constant nuisance of supplier loyalty programs luring travelers from designated booking channels or preferred rates and fares, content fragmentation complicates company requests (or requirements) about where to book. It's always been that way for lodging and now the situation with airlines is getting tougher as carriers distribute larger proportions of their fares and inventory only through modern selling channels that don't mesh well with many TMC tech stacks.
According to Martin Warner of MW Consultancy, buyers must weigh the potential cost savings of lower airfares or hotel rates (and bypassed TMC fees) when allowing travelers to book directly versus the added, internal cost of supporting those bookings.
"You would need to accept that you have to oversee the program in a different way," Warner said. "The challenge that a travel manager has is trying to understand the change in the total cost of ownership of their program because of all the changes in distribution." Warner envisioned scenarios in which companies book fares only for certain city pairs directly with the airline to avoid TMC fees.
It's Still About the Data
Regardless of the approach to booking channels, travel program managers must pull together all the data for duty of care, reporting, sustainability initiatives, benchmarking and other purposes. TMC data already is seen as far from perfect, and content fragmentation exacerbates those weaknesses.
The imperfections highlight the need for someone internally to guide executives. Parham, for example, said the finance team at a previous employer assumed it could take a data dump from the TMC, bring it into whatever business intelligence tool that team used and create data profiles. "They failed," he said. "We went around and around for months. I tried to explain the limitations of TMC data, and what we were pulling out of the GDS and back-office systems. It was impossible; they couldn't do it.
"There's always that conversation with them [in finance] around the TMC data, especially when it comes to hotels, that it is not what actually happened," Parham continued. "They can't really wrap their minds around that."
Parham also said employers always challenged him to report on the "actual cost" of a trip. That's still part of the task, but now the trip's ROI is on executives' minds too. "You need data to answer that," Parham said.
According to Del Sesto, "Even the traveler experience will be underpinned with data – it has to." Since it supports all aspects of a program, data must be an industry priority, she said, "but there is always something diverting the TMCs' attention – sustainability, NDC content, etc. The intention is there to make data better, but there is only so much money for this. It's not their responsibility alone."
Buyers at big programs often need a data aggregator to help merge TMC and expense data, and bring in other feeds.
In light of that need, some wonder if content access challenges, new or higher client fees stemming from lower supplier compensation to TMCs, and carrots from suppliers to customers for booking directly, will make the TMC lose its position as the linchpin of managed travel programs.
"The TMC has been the prime contractor," said Warner. "Is it time to reconsider the role? If you know as a corporate that you will consume a degree of content with a carrier that is making its lowest-priced content available only in the NDC channel, are you prepared to pay the premium through the travel management company to book, reach and manage those transactions?" he asked.
While comparison shopping across multiple airlines is important, if not essential, for most programs (particularly in competitive markets), "there may be some noncompetitive markets where the value that the TMC provides isn't the same, doesn't need to be the same," Warner said. "Therefore, is the premium paid for TMC services disproportionate to the return on value? It depends on the mix within your program."
According to Warner, a travel program's prime contractor one day could be a data aggregator, a multi-source booking engine or some other entity. IT providers new to travel "are starting to develop solutions for the automating of servicing," he said. "If they can incorporate the TMC information and data flow, that would be of tremendous value throughout the ecosystem."
Asked about paying more to the TMC, Parham replied with questions of his own: “Can they deliver today on the things that I can't touch? Can they service these bookings that were made directly? That's where I'd pay more. In my mind, the TMC would be the service provider for everything booked out of the program, but still bring it in to be managed. Those would deserve a premium price. When I look at a normal transaction, no, I don't think it warrants that.” n
Visit businesstravelexecutive.com to listen to this complete LinkedIn Audio session and find details about the next BTE Town Hall.
