Travel buyer chatter at industry conferences over the past several months has revealed a healthy appetite for change and innovation with their travel management service provider, but the path to and market for that change is as difficult as ever.
While BTN research in recent months showed, at least among the small and midsized travel program segment, that three-quarters have not changed TMCs in recent months, Mesh Payments CEO and co-founder Oded Zehavi spoke of a "wave of [requests for proposals]" for TMC services that he was seeing across the industry. Research by Corporate Traveler and the Global Business Travel Association last month supported that observation, with more than two-thirds of 299 SME stakeholder respondents saying they currently are looking for a new TMC.
At the same time, with the Covid-19 travel restrictions largely in the rearview mirror, the travel management company landscape has endured without the widescale closures and consolidations some had predicted during the pandemic's darkest hours, but it's certainly a shifting landscape nonetheless. American Express Global Business Travel's planned acquisition of CWT, of course, would be the biggest shift, but a number of other transactions are either underway or recently completed, including Direct Travel's acquisition by a group of investors led by Steve Singh and TravelPerk's acquisition of AmTrav.
Is an RFP Worth It?
As such, the role of the TMC RFP is shifting as well, as some buyers question its value. In a recent BTN benchmarking session among Corporate Travel 100 buyers, one questioned "the value in doing an RFP … when there's a virtual duopoly."
The capability of serving large global programs is at the crux of the U.K. Competition and Markets Authority's investigation into the Amex GBT-CWT merger, to which Amex GBT has responded to dispute the claims of limited competition. In that response, Amex GBT and CWT referred to the growing slate of providers who are pursuing global multinationals, including tech-led companies, such as Navan, or midsized TMCs broadening their ambitions, such as Fox World Travel.
Whether a TMC is able to meet a company's global needs, however, the RFP process is not the place to figure that out. Travel buyers should go into the process knowing exactly what they need from a TMC, with those who are not able to fulfill those needs excluded from the process, Rossana Martin, BCD Travel's North America SVP of global sales, said during an education session at this year's GBTA Convention in Atlanta.
"Don't send out a blanket RFP," Martin said. "If a TMC wants to put together the right value proposition, they need to understand what's important and need to keep an organization's goals firmly in mind."
If a company needs an end-to-end solution, for example, that should eliminate some potential bidders from the onset, she said. If sustainability goals are a top priority for a company, TMCs that aren't able to help a company deliver on those goals shouldn't be in the bid.
Doing that work ahead of an RFP can save a significant amount of effort, Martin said. Through workshops and discovery, a large portion of bids "are won before the RFP is issued," she said. "We met with a customer who did the pre-work, and they told us we won in that first meeting."
Conversely, the majority of customers who develop RFPs for TMC services end up staying with the incumbent, she said, another indication that the process could be a waste of resources if proper planning is not done.
With the current environment for TMCs, there might not be much of a response without sufficient preparation, either.
"Going to bid, it's a huge exercise," Martin said. "With all the activity happening with consolidation, TMCs are not really willing to enter into a bid without some level of engagement."
Stakeholder Importance
Having the necessary stakeholders—including senior leadership and anyone who would be involved throughout the process, such as IT or the executive assistants who handle a large volume of bookings—involved at the onset is a key to success for a TMC RFP, buyers said during the GBTA education session. Those stakeholders also need to understand the complexity of a TMC decision.
Grace Knowlton, director of global travel and expense for General Atlantic, said she had to make it clear to those in the company who thought the process would take three months that it would not be the case.
"We're not buying computers; we're buying travel, which has many more layers: technology, ESG, the agent team," she said. "You're not just buying one thing. You're buying 10 things all in one, and you're taking the time to make sure that it's something that is going to last three, five, 10 or 15 years."
Having that involvement at the RFP stage will make the next steps happen more smoothly once a bid is awarded, she said. "Bringing them in and giving them the voice makes them feel like they are involved in the decisions," Knowlton said. "When you move into implementation, having that buy-in, you make change-management decisions much easier."
Intuitive corporate travel and M&E manager Katie Hollien said that preparation work "helped us be successful" with the company's TMC RFP. "We had the right stakeholders, made sure we had the timeline and dates agreed upon and achieved our goals," she said.
Failure to bring in stakeholders at the onset, on the other hand, can be a grave error, Martin said. She said she had one client with whom she had won the bid, but when they spoke to IT about implementation, they discovered IT was so backed up that they wouldn't be able to start for two years.
"If you don't understand what every stakeholder is doing, if they don't have time to implement the TMC, that can derail your whole process," she said.
Expecting More
The RFP is an opportunity to highlight what a TMC can do beyond the core services, and analysts said they should be tailored to those specific needs. Providing a long list of questions that are not relevant to a company's core goals is not as fruitful.
"They can say yes, yes, yes, but it does not add any value," Travel Consulting Group managing partner Jens Vongehr said during a session at Business Travel Show Europe this summer. "It's about analysis, it's about focus, it's about consultancy."
Buyers in the CT100 benchmarking session spoke of some of ways they are maximizing the potential of their TMC services. The buyer who spoke of the "duopoly" also said they are getting a "pretty big bang for [their] buck" with consulting services, due to Amex GBT's investment in its consulting arm. Another buyer said they are using their agency to manage their soft-dollar program with their airline partner. A third buyer said when they implemented their TMC, they tasked them with building them a new portal as well as work with marketing and communications.
"We're getting so much more service out of our TMC, and we're getting innovation," the buyer said.
As those expectations expand, however, buyers should not lose focus on that core ability of agent service. One CT100 buyer noted that no matter how many agents are serving an account, only a small percentage will be comfortable with VIP services, and the buyer suggested getting those expectations upfront in writing.
Hollien said making sure she had the right agents on her account was a key part of her negotiations.
"You can put in the best online booking too and the best portal, but the first step of a success TMC relationship is having the ability to book travel," she said. "If the agents aren't the best you can get, you might as well throw everything else out of the window."