How TMCs Approach SMEs

Travel management companies, from the megas to midsize and smaller players, have seen the number of small and midsize enterprises that wish to manage their travel spend increase during recent years. The experts have differing opinions about just why, but TMCs are nevertheless working to cater more solutions to SMEs, both through in-house initiatives and via external partnerships.

The 'Why' of SME Travel Management Growth

There are a number of working theories about why more SMEs seem to be embracing managed travel programs than in the past. One idea is tied to another growing area of the industry: travel risk management. In a recent BTN survey of 229 travel buyers and managers and corporate safety and security managers, 65 percent said their companies' attention to traveler safety and travel risk management has increased over the past three years. "Companies in [the SME] segment of the business are wanting to make sure they know where their employees are," said BCD Travel SVP Kathy Bedell, who oversees BCD Travel Affiliates.

Gant Travel Management president Patrick Linnihan's explanation tracks closer to broader conditions in the workforce: Employees job-hop frequently, and small and midsize companies fill executive positions with leaders who have worked for larger companies. According to a 2016 report from the U.S. Bureau of Labor Statistics, the median number of years that wage and salaried employees, regardless of age, had been with their current employers was 4.6 years. For workers aged 25 to 34 years that dropped to 2.8 years. "the idea of 'Yes, we can manage our travel when we couldn't before'—that's being injected into companies as the American worker no longer stays in the same place for 20 years anymore," said Linnihan. "The ambitious CFO has worked at two or three companies and they know what best practices look like from the time when they were working at Deloitte. And they're naturally cross-pollinating what the best practices are across the SME landscape. That's why you see the trend that you're seeing right now: leadership."

But part of that equation is also the development of and investment in technology, which allows leaders coming from large companies to implement the same or similar technology at an SME without the cost concerns of the past.

Bedell said the biggest opportunities in the SME market for TMCs "fall into areas where new technology solutions enable these smaller companies to manage their travel programs, create compliance and change behavior through engagement with the traveler." Bedell added that the growing emphasis on traveler engagement and traveler experience also are leading SMEs to adopt managed travel. Those, too, are driven by technology.

Three TMCs, Three SME Approaches

ATG's Small Business Division

The SME market doesn't even crack the top three list of business priorities for ATG, a large TMC based in Columbus. Instead, ATG primarily focuses on global accounts. However, about three years ago, the company established a small business division to service corporates with less than $1 million in annual air spend.

ATG CEO Tammy Krings said the division came about because corporates with small travel spend were approaching the company "and we realized that there was a need," she said. "We felt like this was an area where we could be almost immediate heroes. We could have a positive impact very quickly."

Small business enterprises—as Krings calls them, even though this can sometimes describe large companies with very limited travel spend—are able to take advantage of economies of scale provided by ATG.

Among the greatest benefits for SMEs, Krings said, come from ATG's supplier relationships. For example, a large air carrier may have an existing product geared toward SMEs, but the SME may not know it exists and the air carrier has trouble targeting small, managed programs. ATG makes that connection and provides SMEs with a travel framework that will help them as they continue to expand. "[Corporates] are able to introduce these controls and mechanisms and services to the travelers as they're growing," she said. " If they go from 30 to 300 travelers in a very short period of time, then trying to introduce brand-new policies and procedures to travelers becomes more cumbersome."

Gant's SME Pay Solution

SMEs make up about 98 percent of Gant's customer base, and the Bloomington, Ind.-based company's growth during the past five years makes a compelling case for the expansion of the SME market. Between May 3, 2011, and May 2, 2012, Gant had $103 million in total client spend, $83 million coming from ARC. In the same 12-month span five years later, between 2016 and 2017, the company reached $220 million in total client spend, $155 million coming from ARC.

Gant is a preferred partner with Concur, a company that has been making its own inroads with the SME market, most recently with Concur Risk Messaging, which has a batch of enhancements planned for this summer. But Gant also has rolled out a virtual pay option for hotel bookings via an integration between Conferma and Concur. Linnihan said the product provides special value to the midmarket. "All companies have non-employee travel," he said, but for large companies, it's easy to establish direct billing, "whereas in a small company, you don't have that power. So they're doing things like 'OK, we'll set up a direct bill,' but it's laborious."

The first customer to roll out the program, called Gant Strategic Pay, is Harmony Healthcare, an SME.

Conferma, Linnihan said, has made it "simple for an SME to have as easy of a third-party billing process as the megacorporation with tons of purchasing power that has a bank tripping over itself to solve their banking problems."

Amex GBT's SME Relaunch

Amex GBT in March began selling a new service bundle designed specifically for the midmarket. It's meant to enhance traveler experience and, as a result, increase travel program adoption. "We really took a step back and wanted to recognize that there isn't a one-size-fits-all approach when it comes to either travel policies or programs within the midmarket because the needs and the challenges that midmarket companies have are so diverse," said American Express Global Business Travel general manager and VP for the U.S. and Canada Colin Temple. "The more we looked at this, the more we came back to really elevating the traveler experience because if the traveler isn't really buying into the value of the program, the company isn't really going to get the usage they're looking for."

The company worked with Jigsaw Research and industrial design company Livework to design an end-to-end experience for the midmarket, guided by seven principals: personalization; proactive servicing, which means access to real-time information and solutions when, for example, trips are disrupted; consistency; value for money; clarity, aimed at providing companies with greater insights into travel spend; customer effort, which pertains to simple and easy processes; and knowledge, which speaks to expert advice provided to corporates.

Temple said Amex GBT further developed the program in a pilot that began in December 2016. He said that while the seven principles are not necessarily special to the middle market, "we typically find that, based on the services that larger companies can afford to pay for, they're more readily available." He added, "Our goal was to really democratize this approach to the middle-market client and really leverage technology to do that," he added.

One piece of technology now available to clients through the company's core bundle of midmarket services is Premier Insights, Amex GBT's reporting tool. "We understand the vast majority of the smaller clients really need visibility into what their travel spend is, the opportunity to manipulate certain thresholds, for example, to get what-if scenarios," Temple said. "That really has resonated well with the midmarket client: having this highly visual and intuitive tool to use, which was previously inaccessible to smaller companies." The core offering only allows companies to visualize travel spend. Corporates can choose to add on card spend, as well, if they are American Express corporate card clients.

—Additional reporting by Elizabeth West