Many corporations with large market travel spending are expanding travel management company consolidation efforts as they target cost cutting, greater program control and maximum supplier negotiating leverage.
Download a PDF of the full 2009 Large Market Benchmarking Report here, including all data, charts, stories and large market buyer profiles.While 81 percent of large market travel buyers in
BTN's survey said they are consolidated with one TMC in the United States, the greatest opportunity is internationally, where slightly more than one-quarter of respondents have rationalized agency operations.
"There are very few organizations that I know of with that type of spend that are not consolidated, unless they are a combination of business units over the last couple of years and just haven't gotten there yet," said Ovation Travel Group executive vice president Michael Steiner in reference to large market companies in the United States.
Mary Ellen George, general manager of BCD Travel's consulting unit Advito, said that BCD's bid activity is up 67 percent year-over-year, with much of the action coming from large market buyers evaluating consolidation with a single TMC.
Internationally, TMC consolidation sometimes was slow as buyers were able to obtain data from all of their agencies and have their primary TMC aggregate it. With suppliers looking for buyers to have more control over their programs to ensure marketshare commitments and other discount thresholds, international agency consolidation is more than just a blip on buyers' radar screens.
"Clients from the largest to the smallest are looking at all of their spend that is not under one umbrella today and are looking to pull that in," said Travelocity Business vice president of sales and account management DeAnne Dale. "It used to be: Consolidate the data so that you have the global information to leverage. Now that the suppliers are looking for more, it is even more important to show that they have control."
Meanwhile, as some companies downsize travel management departments and give travel responsibility to one or several people with multiple responsibilities, corporations are expanding their relationships with TMCs for more services, such as consulting, managing vendor relationships and negotiating. Some TMCs are adding dedicated account management and advisory resources.
"Five to 10 years ago, there were dedicated travel managers and now they might have food services, apartments, credit cards or might be responsible for buying computers," said Bill Tech, president and CEO of Travel and Transport, which has about 15 accounts with annual U.S. booked air volumes of $10 million to $50 million. "A lot of that is the shift to procurement, where they are buying more than just travel."