BLOG: Why Your Organization is Using a Travel Management Company

Cambridge Case Study

Have you ever wondered why your company is requiring you to contact a single travel management company (TMC) or utilize a specific online booking tool?  While it could be because they want to control every aspect of your traveling life (not likely) it’s probably because they see several big picture benefits to consolidating and streamlining the travel process.

Most business travelers aren’t involved in the decision-making process surrounding a structured travel management program but are the largest public impacted by it.  Giving you some of the most common rationale behind this strategy might help you understand why you’re being asked to operate in a specific way.

Here are some of the top reasons:

Program Visibility

The old adage that knowledge is power is true in many areas of life and travel is one of them.  If your company doesn’t know the who, what, when, where, why and hows of its travel program, it has no ability to identify areas of concern or potential.  It’s important to book travel in a common platform known to your company.  When an employee books his/her travel on different websites and multiple travel sources, then the only data that is visible is on the payment/reimbursement side of things.  Data sitting in many expense or accounting repositories is very raw and extremely difficult to extrapolate quickly and efficiently.  So if the program isn’t visible the company is unaware of essential travel information.

Cost Containment / Avoidance

Companies make every attempt to hire good, skilled employees who strive to help grow the company and when traveling on behalf of the organization make wise choices in how to utilize company funds.  However, in some situations travelers may (unbeknownst to them) make choices that go against unwritten rules and can cost the company money.  By consolidating travel into one mechanism or stream, efforts to contain unnecessary expenses can be implemented and guidelines on what is expected from business travelers can be effectively communicated.

Supplier Leverage

If companies can consolidate travel and get everything “on the grid”, then opportunities to negotiate with various suppliers in the travel marketplace can be identified.  When a company is operating on the same page and working within specific travel program parameters, management can see where the spend is being allocated and discussions surrounding discounted rates can be had with airlines, car rental companies and hoteliers. Many vendors in the industry require travel agency data in order to validate company spend and capture inventory utilization.

Booking Source Options 

Many companies understand travelers needing to have some independence and choice when booking travel, so programs often incorporate corporate online booking tools as well as live agent support.  Corporate booking tools like Concur, Certify, and more offer companies the option to configure policy, preferred vendors, contracted rates, and more into the tool which provides guidance to users on what they should be booking but still allows for the data to flow to a single source.  Giving employees the option to book air, car, hotel, and/or rail in a single session can potentially save time in researching those in multiple sites.  Additionally, it can lead to opportunities in adding technology to help you manage your travel easier and more efficiently (e.g. expense-reporting software, chat apps, after-hours support, etc.).

Policy Compliance

If business travelers all utilize the same company-approved process, then travel program compliance increases.  Compliance isn’t about completely disregarding the needs of business travelers in lieu of saving a dollar.  It’s about promoting products, programs and services that are good for the entire organization as well as the traveler.  In a recent article published by Business Travel News, bigger travel savings are found in compliance rather than negotiations.  Without having program controls in place, travelers could be non-compliant and not even know it because vendor-direct sites or leisure tools/app don’t have policy guidance incorporated educating travelers what is in and out of policy.  With recent changes implemented by hotel and airline suppliers the risk to company spend is greater than ever.  Non-refundable hotels and basic economy airfares are just a couple of low-cost options that if not managed within the program can cost companies in the long run.  Many companies don’t allow those types of travel options to be booked but if you aren’t using the TMC or supported booking tool, you may not be aware you are selecting them.

Duty of Care

Duty of Care is a buzz word that is pretty common when company stakeholders are talking about travel with travel management companies.  If you aren’t familiar with the term, International SOS gives a great definition – “Duty of Care refers to the moral and legal obligations of employers to their employees, contractors, volunteers and related family members in maintaining their well-being, security and safety when working, posted on international assignments or working in remote areas of their home country.”  Your company needs to be able to identify where its travelers are at any given moment in the event something should happen.  It’s an unfortunate reality that our world isn’t getting any safer and employees need to feel confident that they are being looked after when traveling on business.  Travel Management Companies have many different options to assist companies in fulfilling obligations to travelers and ensuring that key information is available when its needed.  When employees book their travel in a single place, companies are able to identify who might be at risk and devise a plan of action.

Business travel programs have many facets to them and the actual transaction of booking air, car, or hotel is a very small part of the entire program scope.  Partnerships developed between organizations and TMCs ensure that every facet is examined and opportunities to streamline a program are discussed while ensuring traveler requests and assistance are balance within.  We’ve found that those involved in the decision-making process of moving to or maintaining a managed travel program, have no issues with employees reaching out to them to inquire about the reasons for it.