How TMCs Make Money: Legacy Models Under Pressure

Travel management companies are at the center of the corporate travel world, connecting buyers to airlines, hotels and ground transportation suppliers and offering technology and client service.

TMC revenue models have evolved over the years. Once relying on supplier commissions, the model shifted after airlines cut and eventually eliminated them. The lion’s share of TMC revenue now comes from supplier incentives, client fees and technology-related charges.

This sets up a broader debate, as travel buyers increasingly scrutinize the model and complain about a lack of transparency. If a large chunk of TMC revenues come from suppliers, are they steering travelers toward choices that maximize supplier payments? Why are supplier deals cloaked in secrecy? Buyers are also pushing back more on transaction fee negotiations and experimenting with alternative fee models as new entrants challenge the traditional TMC model.

"The TMC is the backbone of the travel program, and as long as we don’t have proper clarity, it’s an imbalance. They need to see all of your volume and details, so they want transparency, but they won’t give you transparency in return, which is frustrating," according to a large-market corporate buyer quoted in BTN’s 2025 State of the Industry Report.

Supplier-Generated Revenue

Supplier payments, which traditionally have been the mainstay of TMC revenue, include airline overrides, hotel commissions and global distribution system incentives. 

Overrides and commissions can vary widely. Deeply discounted corporate fares can generate no commission at all, while a full-fare international business-class ticket may yield a lucrative payout, said George Kalka, senior vice president of business travel at Fox World Travel. Hotel bookings follow a similar pattern, with commissions tied to rate categories and booking channels. TMCs also earn incentives from GDS providers like Amadeus, Sabre, and Travelport, which pay agencies per segment booked in order to secure volume through their platforms, he added.

Supplier revenue, Kalka said, functions "as a subsidy to the corporate travel program," and without it corporations would face far higher direct costs.  But due to their confidential nature, they are a source of friction with buyers who have no visibility into these transactions.

Conventional industry wisdom is that TMCs earn more revenue from suppliers than they do from clients. That makes buyers question whether TMCs push decisions that are best for travelers or best for their own revenues.

Client-Generated Revenue

The elimination of universal airline commissions gave rise to today’s TMC model, in which these businesses charge buyers fees on a per-booking basis. This model largely holds today, with 71 percent of buyers paying transaction-based fees, though about a quarter have shifted to per-trip, management-fee or hybrid arrangements, according to BTN’s 2025 State of the Industry Report.

Per-transaction fees can be steep and confusing for buyers. Andrew Menkes, founder and CEO of Partnership Travel Consulting, recalled an instance where a U.K. firm employee racked up nearly £300 in service charges on one trip because the TMC billed him every time he called after booking online. Another charged clients when their system auto-replied “You’re welcome” to a traveler’s note of thanks.

Others may impose a more structured fee formula: an air transaction fee, a car or hotel reservation fee, a cancellation or refund fee and an after-hours service fee, said Kalka.

Among the large incumbents, BCD Travel is focusing its positioning around transparency and customization. A spokesperson for the firm said the company emphasizes its "collaborative approach" and tailored solutions, noting that "our pricing is based on all revenue generated, without letting revenue flows influence our development strategy or client service."

New Approaches

Some buyers are willing to trade in more risk for a bigger payoff. Kalka described a model where buyers cover a TMC’s direct costs—labor, technology and third-party servicing fees—while demanding that all supplier revenue be returned to the buyer.

"It’s the most transparent relationship," he said, with the corporation taking on the risk of fluctuations and reaping the reward if supplier payments increase. While TMCs gain margin clarity and stability from these arrangements, they lose the buffer that supplier revenue once offered.

Meanwhile, startups are challenging the model entirely. Menkes pointed to Blockskye, which partners with Kayak for Business and uses a blockchain-based system to allow corporates to book directly with suppliers cutting out many of the intermediary fees.

"They cut out the agency commission, the GDS fee and the card cost," Menkes said. PwC and Deloitte have already signed on, signaling a willingness among some of the world's largest buyers to bypass the traditional TMC system.