Buyers: Beware Of Conflicts Of Interest
<H1>Buyers: Beware Of Conflicts Of Interest</H1><B>I</B>have bemusedly read numerous articles written by many travel industry
consultants about the changes going on in our marketplace. For the most part, I agree with many of their premises. What I don't agree with is their generalizing of travel
management company functions, and their questioning of whether or not travel management companies bring value to corporations.
Just as it would be wrong for me to lump all consultants together into one classification, it is inappropriate for consultants to lump all agencies together into one classification. All agencies are not alike.
All travel management consultants are not alike, either. In fact, most are quite different from each other. Some have experience in running travel management companies. Some are lawyers. Some previously were travel managers. Some are marketeers. Some come from the airline industry. Some have in-depth knowledge about the value of travel management companies. Some do not.
No one has mentioned publicly that there are some inherent conflicts of interest within the travel-related consultancy industry, just as there are within the agency community. For example, if you dig beneath the surface, you might find that in reality some consultants work very closely with specific airlines to help them to raise their yield. At the same time, those very same consultants are retained by corporations that are negotiating to bring price down with those same airlines. Rosenbluth International does not endorse that practice.
Another example is that some consultants sell and market software products designed to compete with the very travel agencies their clients ask them to evaluate as an unbiased third party. Some consultants even have gone so far as telling agencies that unless they succumb to using those consultants' services, they will be blackballed from that consultant's recommended list of agencies that corporations should pursue for service.
Some consultants are independent, unbiased authorities on travel. To those who are, we salute you. But we all should reflect for a second on the motivation of the others. In reality, excellent, well-resourced, and client-motivated travel management companies provide the same consultancy services as do many travel consultants. When consultants knowingly recommend to corporations that they partner with a travel agency far less qualified than others under consideration, one must ask the question, "Why?" Does it create an unnecessary, long-term dependence on the consultant for knowledge and guidance? Does it create a travel agency foil with which a consultant's value is guidance? Does it create a travel agency foil with which a consultant's value is benchmarked? Does it undermine client relationships with agencies offering products that are competitive-and possibly more valuable than the consultant's offering?
It has become fashionable over the last couple of years for consultants to say that agencies must transform themselves into consultants and not succumb to being order takers if they are to survive. They are absolutely right. Some agencies have always been consultants, and others are now working assiduously to become just that. The big question one must now ponder is, "Do travel management firms and travel consultants compete with one another?" And if so, "Do corporations realize that both parties may be working at cross-purposes?"
Is there room for both to service the same client? Perhaps so, but both agencies and consultants must be open and honest with clients. No hidden agendas. No distortions of each other's capabilities and value. And please, no generalizations.
Hal F. Rosenbluth is CEO of Rosenbluth International.