Travel management companies and other suppliers in the past several weeks have reinvigorated efforts to attract midmarket business, primarily by repackaging services that offer a less complex pricing structure and, in some cases, scaled-down versions of products and services they offer to large multinational clients.
Small and midmarket corporations traditionally required less infrastructure support and simpler services, which yielded better profit margins for suppliers. That has started to change in recent years as procurement becomes more involved in corporate travel management, midmarket companies expand internationally and the segment begins to adopt the types of mature travel management practices seen among larger corporations.
Those companies' appeal to suppliers still is strong, as the segment has exhibited travel volume increases and strong growth potential coming out of the economic downturn, according to Travel and Transport executive vice president of sales, operations and client service Tim Fleming.
In addition, corporations that previously managed travel lightly, or not at all, began to change as they looked to reduce costs in the economic slump.
"New corporate customers from the middle market and small market will provide new areas of growth," said American Express president of global travel services Charles Petruccelli at The Masters Program in Washington, D.C., last month. "The mid-segment and the SME segment will always be the first ones to rebound as the economy recovers. This segment has been forced to optimize their travel spend like large corporations, yet they don't have the resources to do so. We'll see increasing demand for managed travel."
American Express Business Travel in early February rebranded a bundled service tailored for corporations that spend up to $10 million in U.S. booked air volume annually.
Rebranded as Axcentis in the United States, Australia and Canada and Axcent in France, the Nordics and the United Kingdom, the rebranding is part of an effort to globally standardize American Express' services and products for the segment, according to John Berkley, vice president and general manager of Axcentis in the United States. One-third of American Express' midmarket clients do business in more than two countries.
Meanwhile, FCm Travel Solutions rebranded its small and midsize business offering in Australia, Canada, New Zealand, South Africa and the United Kingdom under the Corporate Traveller name
(BTNonline, Feb. 4). The service provides an online booking tool and standardized reports for an established transaction fee and no definitive contract.
Travel management company Travelocity Business this month announced an agreement to integrate its tools with those of online expense management company Certify for an offering designed for small and midsize businesses.
Online booking tool GetThere late last month began offering to North American midmarket companies a package of its own tools, the meetings management platform forged through its partnership with Worktopia and Sabre Travel Network's Cubeless community platform
(BTNonline, Feb. 24). GetThere is aiming the bundled offering at companies with 500 to 5,000 employees and less than $5 million in annual travel expenditure, and is pricing on a per-month, per-user basis, instead of the more traditional transactional model.
"We know in the marketplace that there are companies in this category that are unmanaged, lightly managed and some that are managing, but perhaps they are ready to take their programs to another level to take advantage of new capabilities and best practices that others in the larger segment have been successful with and bring those into their company," said GetThere president Chris Kroeger, who added that the company is adding salespeople dedicated to midmarket accounts.
As the midmarket becomes more mature in its travel management practices, companies of all sizes increase online adoption and some travel management companies move to large centralized call centers, the differentiation between corporate market segments has declined, leaving suppliers to focus their midmarket efforts on program management and not necessarily transaction service requirements.
"It's not so much about where the biggest opportunity is of companies that are newly managing this component. It is a question of the competitive marketplace now," according to Consulting Strategies principal Mark Walton. "Travel management companies need to constantly invent tactics, strategies and technologies that appeal to these market segments that will allow them to gain business from their competitors, not from a market that didn't exist."
—Jay Boehmer contributed to this report.