From 9/11 to the global financial crisis to the Icelandic volcano, events of the past have shown that no matter how big the impact, the business of business – and of business travel – will recover.

However, it’s fair to say that no crisis in the past 50 years has had a greater impact on travel worldwide than the COVID-19 pandemic. And while any global economic crisis tends to drive disruption and consolidation in all sectors, the pandemic has proven to be an order of magnitude greater, which has caused some TMCs to disappear and the level of service for others to be affected negatively.

With the calendar having turned to 2023, there are some big changes in the way that companies look at travel management programs compared to past years. After all, even though travel seems to be recovering for the most part, most travel management companies have been impacted by the precipitous drop in travel, resulting in financial woes and personnel issues.

The pandemic has shown the importance of being able to quickly adapt to new situations, to have a flexible workforce and technology to support sudden changes.

For example, when the pandemic first hit, BCD Travel morphed overnight into an almost entirely virtual organization.

Despite the sharp drop in earnings, it continued to invest a significant amount into the company, especially in innovative solutions so clients could get back to business and ensure duty of care, while their travelers stay safe and productive.
“We have been able to learn from these past events and have set forth our transformation from agency to a digital travel services company many years ago,” says Craig Bailey, president, Americas for BCD Travel. “This in turn means our value proposition does not need to greatly change but our focus on long-term stability is front and center, so that we can remain a partner for the long haul.”

Mike Boult, president of Travel Leaders Corporate, notes the focus on automating low-value transactions has been a big change. Other monumental changes, he explains, have been restructuring service delivery teams and reworking agreements as a result of inflation in the marketplace and the competitive nature of goods and services.

And with transactions being down, Boult says there’s been less money for TMCs to invest, so they need to be very selective on where they want to invest their dollars – so they must be strategic in yielding productivity inputs, customer improvement inputs and buyer expectations.

TMCs have had to perfect the art of managing disruption, according to Mike Orchard, principle, consulting services for Festive Road. “Whether it’s the pandemic, resourcing challenges, changes to the distribution chain, or a myriad of other disruptions, all TMCs have had to quickly become more agile and nimble while continuing to manage the needs of clients,” he says. “As a result, many TMCs have had to become more ‘short-term-ist’ and focused on attracting and retaining talent while being even smarter in leveraging technology.”

A sense of risk attached to a sector that was so directly impacted by the pandemic and a lack of understanding and knowledge of the key players powering business travel were identified as root issues that may discourage new entrants. “Now that business travel is coming back, another challenge is to attract talent back to the industry and ensure sustainable growth for business travel,” Bailey says. “In general, the industry’s reputation needs boosting up.”

This is one of the results from the BCD sponsored Big Idea session at the GBTA Europe Conference 2022. “There’s a clear need to better frame business travel’s value proposition as ‘travel for good,’ accentuating not only the benefits the sector brings to the economy and society but also the flexibility, inclusivity and long-term career path potential within the industry,” Bailey says.

Maureen Brady, chief operating officer at Corporate Travel Management NA, says that as the industry continues to recover, she noticed that financial stability and transparency have become even more important to customers.
“It’s about the peace of mind that comes from partnering with a TMC that is financially strong to reduce risk exposure now and into the future,” she says. “Further, a healthy financial position helps our customers in their own recovery and growth plans. We must remember that our customers are emerging from the pandemic just as we are, and are emerging from a significant period of disruption alongside their TMC.”

Raphaël Pasdeloup, managing director, enterprise customers at CWT, notes the pandemic brought into sharp focus the importance of offline support and providing the right balance between people and technology in the face of disruption and complex requirements. “Many travelers who are getting back on the road prefer to interact with a travel counselor as it gives them a greater sense of assurance,” he says. “To support that, we have doubled down on the expansion of our messaging capabilities.”

The visible changes include significant numbers of mergers and acquisitions, as well as a lack of qualified agents to answer the phones, according to Andrew Menkes, founder and CEO of Partnership Travel Consulting. “It seems that the recovery of the travel spend was faster than the TMC recovery to staffing levels and meeting SLAs,” he laments.

Many corporate programs are challenging their TMCs to deliver more cost savings and provide a greater degree of behind-the-scenes support for all bookings, says Julian Russell, executive director of IT and supplier relations for GlobalStar Travel Management.

“The additional booking support is partially to help deliver savings in the form of enhanced approval flows as an example, but also to guarantee safety for travelers as they start to travel again,” he says. “As business travel recovers and transaction levels increase, the additional support and checks required by corporates continue to impact TMCs. Providing the additional resource required to support this has been challenging as record numbers of staff left the industry during COVID and have been slow to return.”

Attracting Talent
TMCs are facing a challenge common to the entire travel and hospitality industry: People. The pandemic saw a large percentage of employees in the industry leave and many have chosen not to return. That’s affecting TMCs as a whole.
For example, over the summer of 2022, CTM saw its own call volume jump nearly 40 percent over pre-pandemic volumes, with wait times as long as 1 to 2 minutes. “Although these trends have dissipated since the summer peak, we’re still finding that customers are calling more often, and when they do call, they are on the phone longer with our advisors,” Brady says.

“Many of our customers’ travelers are emerging from several years of a forced travel ‘hiatus’ and have found the post-pandemic travel world a much different place. Perhaps a regular route they once flew is gone, are they are flying out of a new airport. As a result, they require more guidance than before,” she adds.

In addition to the lengthy hold and response times, the labor challenges are also driving up costs, notes Menkes, who shares that he’s heard of agents demanding 25 percent pay increases to stay with their TMCs because they’ve received other offers.

At CTM, one of the ways the company is working through this challenge is via a hiring plan where executive team members meet weekly to review its staffing plan for the next 60 days. “We don’t just train our agents to answer the phones, however,” Brady says. “Part of our agent training is to instruct our advisors in the art of being consultative – not just acting to get travelers from point A to point B.”

To overcome the challenge of attracting talent, BCD is launching the Be You at BCD, which is part of its diversity and inclusivity program. “We’re focused on a growing range of initiatives aimed at increasing workforce representation for under-represented groups, fostering workplace inclusion for all, influencing change in our marketplace/industry and increasing diversity in our supply chain,” Bailey says. “We nurture and celebrate different voices, perspectives and backgrounds in our workforce.”
Apprenticeship schemes for graduates and those leaving school for other reasons are being used by many TMCs, notes Louise Kilgannon, managed services lead for Festive Road. However, the fruits of this labor may not be seen for some time as they invest in learning and development to get people up to speed. “There is no quick fix,” Kilgannon says. “As the leisure industry is a normal talent pool for business travel, we can also expect this to have an impact as leisure is facing similar challenges.”

Big Shift to Tech
For corporations, traveler wellbeing is top of mind, which is why TMCs work to provide the technology to make travel less complex, and ensure travelers have everything they need to feel safe and productive while on the road. “Since COVID, there’s a greater need for travel information such as travel restrictions and requirements,” Bailey says. “Travelers being ‘out of practice’ and suppliers struggling with capacity adds to the complexity.”

Technology is heralding an era of increased choice and control for travel managers, allowing them to become even more strategic. “The API explosion, and a growing myriad of microservices travel providers means that travel managers can build unique travel ecosystems that service the needs of their travelers like never before,” Orchard says. “For example, travel managers (and TMCs) can leverage third-party services across areas such as re-shopping, profile management, guest travel, payment, data and reporting, sustainability services, traveler engagement and more.”

BCD is simplifying the complexity and reducing friction by providing the tools and technology to work faster and more collaboratively, so travel managers can focus on adding value to their team, their company and their customers.

“We’re driving more mobile-enabled, self-service capabilities – like COVID information hub on TripSource and chat – to keep travelers organized and informed and improve and personalize the traveler experience,” Bailey says. “We also offer BCD Pay, which transforms the payment and expense process for travelers, travel managers and finance teams, providing a frictionless, digital payment experience from trip booking and payment through reconciliation.”

On the agent side, Bailey says BCD has introduced AgentSource, a CRM application that allows agents to see all contextual client and traveler information when someone is calling in, and also a booking tool using AI to show agents the most relevant content first.

Savvy TMCs re-defined their technology strategy during COVID and acknowledged that while technology would remain critical, the focus would shift towards products providing additional controls, Russell says. “Approval solutions, traveler tracking and policy management have all become key areas of focus, specifically the requirement to provide consistency across both online and offline environments,” he adds. “Metaverse continues to be a focus and will eventually revolutionize the way hotels and accommodation are viewed and potentially challenge virtual versus face-to-face meetings. This will be a slow evolution, however.”

Pasdeloup is seeing a stronger appetite for integration and interoperability in the travel space beyond traditional online booking or expense tools to technologies that provide complementary or adjacent services, to create an ecosystem of products and services through API integration.

Technology and automation will never replace the human touch, but CTM believes that technology has the power to enhance and improve that person-to-person experience. “For example, consider the automated process we implemented for minor schedule changes,” Brady says. “This enhancement has reduced manual work for our advisors fivefold. Over a period of two months this year, we saw 270,000 schedule changes, and have been able to automate nearly 80 percent of them. This helps our travel advisor focus on those complex, consultative calls that need a reassuring human touch.”

Boult sees mobile adoption growing a great deal in 2023 with all the large TMCs having invested heavily in this technology recently. That could have enormous implications for the travel industry going forward.

Improving Relationships
TMCs are working hard to repair relationships that were hurt by the pandemic challenges and taking steps to improve on service. That will come down to innovation, Boult believes, and finding ways to improve the customer experience and the cost of managing travel. “The pressure from the leisure sites is still going to be immense, so creating an interface that resonates with the consumer side of the business is vital,” he says. “To do that, they’re going to have to polish up some of the legacy tools.”

Communication and the ability to listen and respond is critical to rebuilding the relationship in the years ahead. “Assume nothing and be open to change,” Russell says. “Challenge preconceived ideas and think outside of the narrow corporate travel environment.”

In the past three years, that environment has seen significant changes, and travel management companies have been pushed to adapt. In the process, some TMCs consolidated to strengthen their positions, and most continued to invest in technology. Nearly everyone grappled with ways to maintain service levels. But the predicted wave of smaller TMCs vanishing, leaving just a few major players standing seems not to have materialized, meaning the underlying success of TMCs going forward is more about having the right people, smart solutions and disciplined planning.

“I’m not sure ‘size’ matters,” Brady explains. “But I will say that TMCs with strong financial health, innovative tech that users love to use, and a company culture that attracts and retains the best talent will be the long-term winners.”

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