The Plight of a Multinational SME

The ace in the hole, according to Partnership Travel Consulting CEO Andy Menkes, is corralling your data. Travel buyers "have to prove an ability to provide consolidated data globally because the airlines are going to need that in order to consider any kind of point-of-sale discount," he said. Hotels want to know global hotel spend because, he points out, it's not about where the trip begins for them. Rather, "it matters where the country of consumption is for the room nights." He adds, "If the SME is going to look to optimize their TMC program, they want to go global with one TMC, and that TMC is going to need to know the travel spend and number of transactions by country." He noted that a consolidated global payment system is a boon in this search for data.

Dart Container travel services manager Cheryl Benjamin recommended identifying your largest geographic area of spend. "If I choose this air supplier as my preferred [in the U.S.], what is this going to do for me globally?" Also think about what's coming up the pike. "When I'm ready to move toward the next step in my program, are they equipped to be able to help us within Europe?"

As intimidating as this data quest might sound, what you present to the suppliers doesn't have to be complicated. "It could be as simple as Excel," Menkes said.

So the airline agreements are in place, how can you be sure your travelers are accessing the best ones, especially on a global scale? Menkes reminds us that online booking tools and TMCs are not silos. They both get their airfares from the global distribution systems, so multinational TMCs are at an advantage because they have access to multiple GDSs. "I would not endorse picking a TMC who says, 'Hey, I use the exact same GDS in every market, whether it's APAC, Latam, EMEA or otherwise,'" he said, "because a strong GDS in the U.S. is not necessarily the right choice of GDS in APAC or even EMEA." Sykes director of global finance and travel services Al Mazzola added, "A real good TMC will have all four of the GDSs out there or the three major big ones."

But they don't need to play ball with SMEs, right? Don't be so sure. An SME's annual volume may not compete with a larger player, Menkes said, but by profit per transaction, "there's more money to be made on the smaller accounts than on the bigger ones." Big accounts are high maintenance, requiring a lot of resources from their TMCs. They also use their volume and their consultants to negotiate low transaction fees, and on the hotel side, they return a fair amount of hotel commissions to their larger clients via rebates. The point is, SMEs offer TMCs their own kind of value, and TMCs recognize that.

Mazzola also said that SMEs that want access to TMCs' negotiated supplier rates should consider not only multinational TMCs but also smaller ones that have partners in other countries and have pooled their market share for supplier negotiations.

Ultimately, though, TMCs are not the largest factor in sourcing for a multinational program, according to Menkes. "Focus on optimizing your supplier spend, not your TMC fees," he said. "Choosing the TMC that charges the lowest transaction fee is not going to give the same savings as choosing the TMC that can help you drive compliance to policy, that can give you some inherent airline discounts … as well as bring better traveler experience, which includes mobility." Breaking it down farther, he said, concentrate on hotel spend and then air spend. "Typically, the best opportunity for an SME to save on travel is going to be hotel."