As corporate travel demand continues to grow within small and medium enterprises, we are seeing a very pronounced uptick in the number of travel management companies creating verticals that are focused solely on this emerging SME space. So, what is the value in that relationship for both the TMC and the SME?
In a recent interview Kathy Bedell, SVP, Americas and Affiliate Program for BCD Travel, told Business Travel Executive, “Small and medium enterprises are finding that the value in the managed travel program is delivering better data, driving cost savings, and improving employee satisfaction. BCD Travel believes the TMC is a key driver in delivering the ROI for these organizations.”
There is no denying that focusing on these smaller organizations is a new revenue opportunity for TMC’s. During the pandemic, business travel for large corporations took a big drop, and the providers of services in these markets – from airlines and hotels to TMCs – found themselves rethinking their long-standing business models. At the same time, the industry saw that the SME market was continuing to travel. The mix may have been more car rentals and extended stay hotels and fewer airline tickets, but these enterprises understood that staying on top of their business was key to their survival and even their continued growth during very tough times. This opened a door to a fast-growing population of companies and the TMC’s walked right in.
Another catalyst for organizations to move from unmanaged or lightly managed travel to a more fully managed program was duty of care. During the pandemic, companies of all sizes realized they needed to put more resources toward supporting employee well-being, including the health and safety of traveling employees while they’re on the road.
Employers began to understand that they could no longer just be concerned about the office locations where their employees work, but how also need to manage all of their people risk across their organization. Suddenly companies large and small found their employee location base had greatly expanded, with people working from home or in new locations. Organizations saw that travel risk was only one portion of their overall risk profile, and this was especially true for small to medium sized enterprises where the business of travel was generally handled on an as-needed basis with few controls. For these companies to have an effective people risk program, they needed a disciplined managed travel program to go along with it, or else they would be missing a large piece of the puzzle.
In most cases the ROI on this investment is hard to quantify but is priceless. As Bedell explains, “The SME space is one of the fastest growing areas for the TMC, as companies began to realize how important travel was to their business during the pandemic and more importantly the duty of care for their employees.”
SME programs are also uncovering immense opportunities to create additional value for their travelers and cost savings for their companies through their TMC partnerships. For example, smaller programs can often benefit from the TMC-negotiated supplier programs. As their spend increases, the TMC can help them analyze the data to support individual corporate contracts. They often find that, armed with this information, they can open doors for waivers and favors to help support the servicing of their travelers, benefits they would never have had access to in an unmanaged world. Having the data and analytics at their fingertips helps SME travel managers make wiser buying decisions.
It can often be hard for travelers to understand why one day they book on a supplier-dot-com site for “free” and then suddenly the next day, they have to pay a nominal fee to an agency. While it’s essential to communicate the business case for a TMC to travelers, really, all it takes is getting one change fee waived, or rebooking service when flights are delayed or canceled for travelers to see the value that the TMC can bring.
For TMCs servicing the SME business it can be an amazing opportunity to design programs of all shapes and sizes. Travel spend isn’t the only factor when it comes to identifying an SME client. It is really based on the complexity of the travel demands. A company with $10 million spend may seem small but if they are needing service in 10 countries that creates complexity. Being able to partner with a TMC to design a program that is best suited for the individual organization creates an amazing opportunity for a long-term partnership. As the organization grows, the design of their program can grow with their travel spend and their complexities.
Whatever the reason – duty of care, cost savings, more insightful data or improved traveler satisfaction – the travel programs within SMEs have an amazing opportunity to make difference for their companies. As your organization looks to better manage its SME-sized travel programs, a TMC can be your best friend or your biggest challenge. So be diligent in your search. Be thoughtful in the approach your company wants to take in designing its travel program. And buyer beware of bright shiny objects; take the time to find the right TMC partner and that will position you for long term success and growth.
Jennifer Steinke is Director, Travel, Meetings and Fleet at Moderna, and an industry thought leader with over 30 years experience managing corporate travel. She holds an MBA plus Certified Corporate Travel Executive (CCTE) and Global Travel Professional (GTP) certifications from GBTA. Jennifer strives to deliver innovative and thought provoking ideas to the corporate travel industry.