Consulting's Rising Role in Corporate Travel Management

The timing of business travel's biggest event, the GBTA Convention, doubtless had something to do with it, but recent weeks have seen a notably high number of announced realignments, partnerships and expansions among travel management consultancies. To name but a few:

• Mark Williams left GoldSpring Consulting to join marketing services firm Dots & Lines as CFO. Will Tate and Neil Hammond now lead GoldSpring.
• Nina & Pinta has partnered with travel auditing firm Topaz International and Dots & Lines.
• Festive Road, founded only in 2015, has announced still more recruits, swelling its numbers to 16.
• Former senior BCD Travel executive Louise Miller has joined Areka Consulting as managing partner for the Americas, taking its staff roll to 25.
• Andy Menkes has dissolved his Partnership Travel Consulting firm to join BCD as SVP for global client solutions, while his former partner Tom Stone has joined Nina & Pinta.
• Former PTC consultants Don Murphy and Tanya Racz have joined Duane Futch at Global Travel & Aviation Solutions.
• TCG Consulting quietly has been bulking up to more than 60 full-time associates.
• Scott Gillespie has joined Airlines Reporting Corp. to head analytics—developing data strategies and creating new products—while continuing to run his consulting practice, tClara.

Some of the moving and shaking may be coincidence. However, several of the protagonists caught up in this merry-go-round, as well as a travel manager client interviewed by BTN, believe the changes symbolize major expansion and repurposing in the consultancy market. In turn, those trends are driven by profound shifts within travel management relating to new skill sets and strategic demands, technological advances, an exponentially growing supplier base, resource shortages and geographic coverage.

Miller singles out a group of travel management professionals aged roughly 45 to 65 who are pioneering many of the changes in the consultancy world. Her view is endorsed by Ann Dery, director of global travel for financial data, analytics and ratings company S&P Global. "I think there is a golden age of travel managers that are getting to the third act of our careers," she said. "We look behind us and there aren't many travel managers who have experienced what we have."

Dery's argument is that travel managers historically were operational specialists whose roles expanded and professionalized over the past decade—some would argue longer—by moving into procurement departments. Procurement gave travel managers methodologies and tools to handle sourcing exercises with greater objectivity.

This unique generation of travel managers make for ideal consultants, Dery believes. What is more, she said, "the role of consultants is going to get bigger because the younger [travel managers] are probably multifunctional procurement managers, so their expertise is on the sourcing side but they have limited knowledge on the operations and implementation side. Sourcing is the easy part. The hard part is operationalizing those contracts you have just negotiated. They don't understand why they aren't getting the true benefits out of all these savings they have been negotiating."

Nor is it just a generation of travel buyers who have ripened. So too have the travel programs they are managing, thus stimulating additional demand for consulting. "A lot of large or medium programs have matured, so they are getting diminishing returns," said TCG founder and CEO Albert Taras. "Now, companies are looking over the fence for innovation and what their neighbors are doing." Taras believes companies are looking closer at the entire range of travel spend, "not just agency spend but what is reimbursed. In a best-case scenario, a TMC is only managing 60 cents in the dollar if you look at an expense report."

But nearly all interviewees said the biggest driver of consultancy growth is the corporate trend to keep employee numbers as lean as possible. Instead of adding more headcount to the internal travel team, businesses increasingly prefer to outsource.

"When you look at the total cost of an individual as an employee, it's not just about the salary," said Festive Road managing partner Caroline Strachan. "You've got all of the additional benefits, the office space, the IT infrastructure—everything it costs to run that individual within the organization. But in procurement, you also talk about whether you have a make or buy strategy. The outsourcing era has come to think of that from a people perspective, as well. Is it a role core to our company mission, in which case we have our own people, or do we need some subject matter expertise which does not need to be core within the organization?"

At the same time, the breadth of expertise required to manage a travel program is greater than ever. Not the least of the knowledge challenges is a rapidly proliferating service provider base, especially for digital technology. "There used to be a couple of startups every month. Now, it's a couple every week," said Menkes. As a result, added Miller, figuring out how to work with technologies like bots and artificial intelligence means "the days of handling just the travel management company, online booking, air and hotel are over."

Miller also points to payments as a growth area for consultants. "So much has changed in payments in the last five years that it is much more complicated to work out. It's very hard to have all that expertise in-house."

But perhaps the biggest emerging specialization of all, and the one Festive Road was created to address, is employee engagement. "There is definitely a rise in the objective of making a company a great place to work," said Strachan. "Yes, travel managers need to manage cost, but now, so many more are having to focus on how they get the traveler involved in the program. And we get asked all the time: 'There's 10,000 of them. There's one of me. How do I go about listening to and really engaging them?'"

The need to offer "more subject matter depth" and "knowledge of geographic market idiosyncrasies" similarly explains why consultancies are bulking up, said Nina & Pinta partner Jo Lloyd, who shuttles between the U.K. and South Africa for her work.

Nina & Pinta exemplifies another trend for consultancies to broaden their offerings through partnership. Nina & Pinta has collaborated with, in addition to Topaz and Dots & Lines, The Data Exchange to provide an air data dashboard that allows customers to upload TMC data and carry out its own sourcing analysis. Similarly, Festive Road announced at GBTA a partnership with predictive analytics specialist PredictX to provide more data-driven analysis for clients.

The move takes Festive Road deeper into the traditional consulting territory of TMCs, which often specialize in data-heavy air and hotel sourcing analysis. Such tools require substantial investment and suggest that perhaps the costs of playing in the consulting game are rising. Not all those costs are obvious to the casual observer. Taras said that in addition to employing people in countries like Dubai, Singapore, South Africa and Brazil, "I spend 6.5 percent of my revenue on compliance with data-protection requirements."

At the other end of the scale, U.K.-based Carol Randall used to work for Areka but now flies solo as Sage Travel Consulting. Good individual consultants, she said, with a reputation for deep expertise—in her case, operations and implementation—have no shortage of work either, especially with slightly smaller clients. "It's horses for courses," she said. "There's enough business out there for everyone."