There never was a one-size-fits-all approach to choosing a travel management company. Now, buyers face changes to the competitive set as some traditional TMCs pursue M&A and fresh choices emerge from the tech and financial sectors.

During the August Business Travel Executive Town Hall broadcast on LinkedIn, Amy Hunke, senior manager for global travel and meetings at Ametek, and Daniel Honig, a senior finance manager at real estate and property management software company Yardi, discussed provider evolution and emphasized there are no perfect solutions.

For every travel program, evaluating the best TMC fit depends heavily on individual company priorities and culture, traveler needs and program scale. To navigate the fluid market, practitioners must also choose between so-called closed and open TMC ecosystems, and determine whether and when to contract directly for supporting third-party technology.

Amy Hunke said her company, Ametek, an electromechanical device manufacturer, is shopping for an online booking tool. For the first time, she’s picking the technology first and the TMC after.

“Many travel managers historically would tell you that the good foundation for all things in your travel program would either be a cross between policy and your TMC or arguably just your TMC partner and what service they are putting out there for your travelers,” Hunke said. “The tech and the self-service in my situation is now what we’re seeking. [We are] not trying to discount the strength and how important a TMC partnership is, but balancing that power out.”

The ability to meet a client’s tech needs is one of several criteria buyers consider when assessing TMC choices. Another is the provider’s presence and capabilities in relevant markets around the globe. Recent industry consolidation, most notably Amex GBT’s purchase of CWT, gives bigger players more clout and more servicing solutions, but limits the competitive set.

“I am nervous about what the next few years, or even five to 10, are going to look like if we continue on this path of losing these different agencies,” Hunke said. “The fewer options that we have, the more we may be forced into a box of a partner that may not be the best fit for what that travel program is looking for.”

As small and medium-sized providers get acquired, the days of having a pool of dedicated agents who know travelers’ names and preferences are about over, added Daniel Honig. “Big agencies don’t want to take on more clients than they can handle,” Honig said. “That’s why I hope that for a while there are still solutions for the small and medium-sized companies, where they can still get great service.”

Even the largest TMCs can’t provide a consistent service in every country. They try through partner networks, joint ventures and other forms of ownership. According to Honig, those setups often help with data collection, but different user experiences in different markets can lead to friction. “It’s never fun for your employees to have different experiences,” he said. “You want to make it as equitable as possible.” He thinks tech advancements are helping the pursuit of uniformity.

Hunke described a “double-edged sword,” with back-end benefits of global consistency but challenges related to governing laws and cultural nuances in each country, issues with accessing travel content, and differences in how agencies interact with global distribution systems and invoice customers.

“I’m not familiar with a TMC that has every single country in their footprint – whether a joint venture, a partner market, or wholly owned – 100 percent synced in every single thing that they do,” she said. “It’s very difficult to be an expert in 50-plus countries. You find workarounds and you overcome it because you don’t have another choice.”

[bf] Trade-Offs: Direct Control Vs. Built-In Support [end bf]

Another decision for buyers is “closed” versus “open” ecosystems. In a closed set-up, the TMC owns its booking technology and its servicing apparatus. Navan, Perk and Amex GBT’s Egencia are examples. In an open model, used by many traditional TMCs, the agency has its own service operation and partners for technology (mainly booking).

There are flavors of open. Some companies prefer direct relationships with the third-party technology providers while others lean on their TMC’s reseller deals. Given the dynamic and unpredictable nature of the profession, and travel generally, Hunke strongly prefers to work directly with OBT providers. That allows for quicker fixes, access to roadmaps and opportunities to drive change.

“You’re getting a different level of support in some ways – information that helps you plan – and having that level of control over your program can really only be a positive,” she said. The flip side is more work for the travel department.

If a reseller deal is the route, “when you’re going through that agreement [with the TMC], you really have to pay attention to the details,” and ensure there will be proper support, Honig said. “If you go directly to one of the larger OBTs, it can take a lot more time to get things accomplished, whereas if [the TMC] has a dedicated tech team, sometimes you can have answers a lot faster.”

Buyers need to assemble programs featuring other tech, notably for expense management. They can be purchased separately or, sometimes from certain providers, bundled together.

Generally speaking, CFOs prefer vendor consolidation. “Why pay for two when you can have one and accomplish the same thing?” Honig asked. A single tool for booking and expenses can be efficient for users. “Many agencies can offer that; some can’t,” Honig said. “There’s no right way to do it, but I think the shift in having both within one platform is the way we’re going.”

Artificial intelligence is changing the game for all TMCs. Optimizing Amex GBT’s operations with its AI platform is central to Long Lake’s plan to acquire Amex GBT. Honig and Hunke said they were watching closely as new investors join the market.

It should be a confidence booster for the industry that such firms, filled with “really smart people, are even thinking about their resources when it comes to business travel; they believe in the future of it,” Honig said. The downside is uncertainty that prevents buyers from drawing conclusions, and “it makes you take a step back,” he added.

“It raises a million questions in my head,” Hunke said. “How much control is being given up from the owners of the TMC, for example, or the governing body of the TMC, and what they do and what they know about the industry versus a third party entering the door that’s really in it for the money?” she asked.

“As much as I would love to say that the TMC RFP is being streamlined or it’s getting easier to do, my opinion is that it’s actually getting harder,” Hunke said, acknowledging a possibly unpopular view. “I’m adding questions, I’m adding other areas, I’m challenging a lot more things versus an RFP template I would have sent eight to 10 years ago.”

Visit businesstravelexecutive.com to listen to this complete LinkedIn Audio session and find details about the next BTE Town Hall.