The landscape of travel has changed greatly over the last decade. From pre-GFC levels where corporate travel was almost unrestrained to the subsequent battening down on travel expenses, the current economic climate has become a catalyst for changes in the way they travel, changes in their travel culture, and changes in their travel management consultancy (TMC).
Now, more than ever, is the time to ensure your TMC is helping your business maximise the savings opportunities that currently abound in corporate travel. If your TMC is achieving year-on-year efficiencies, benchmarking your performance, re-negotiating rates with suppliers, and always offering you new solutions to new challenges, your relationship is gold. But if your TMC is failing to continuously drive value, now is the time for change.
Many organisations, when faced with the prospect of changing suppliers, weigh up whether the cost of change will outweigh any potential benefit from partnering with a new supplier. However in the long run – parking the travel transition is ultimately costing - not saving - your business money.
When deciding whether to stay with their existing TMC, many companies are quick to compare fee structures. The reality, however, is that the transaction fees of local travel agents and even large corporate TMCs, vary only within 10 per cent of each other. Of the total travel expenses companies incur, less than 5 per cent of the total cost consists of transaction fees.
The decision should therefore not be based on a fee reduction strategy, but on a Return On Investment (ROI) strategy. The costs of change are far outweighed by the long-term investment returns and savings gained from strategic travel management. In fact, the potential savings of booking with the right TMC can be more than 20 per cent of your total travel spend.