With all eyes now on the ROI of a business trip, travel programmes must have a greater alignment with a business’ core objectives. This shift in optics means that more is being demanded of travel buyers who, in turn, are demanding more of their travel providers.
This has created a virtuous circle where TMCs are increasingly becoming strategic partners. Relationships are becoming less vendor focused and transactional and are now more about value creation. Deeper engagement is therefore key – more active, less passive. It’s also less about logistics and people management but more about delivering real business outcomes, with a focus on the long-term partnership.
“There is now a growing expectation for TMCs and suppliers to demonstrate value beyond just short-term cost savings,” says Sam Davies, Director of Corporate Partnerships at ATPI.
“The pandemic accelerated the strategic importance of managed travel, and that momentum isn’t slowing down anytime soon”
With this expanded brief, buyers and their TMCs are having to collaborate with multiple business departments, whether it’s human resources, procurement, finance, DE&I or ESG teams, as well as the C-suite, accounting for multiple objectives including employee wellbeing, risk management and revenue generation. Centralised oversight is also key.
“In the past few years, engagement with finance, sustainability and security teams has increased the most, aligning travel management with cost control, environmental responsibility and duty of care,” states Teri Miller, Executive Vice President, Global Client Team at BCD Travel.
Broader appeal
TMCs are having to adapt, step up and offer a more holistic approach in order to cope with this expanded brief. There’s also an imperative to go beyond cost control and service delivery. Travel management firms which are thriving are those who have significantly broadened their expertise.
“Buyers now expect collaborative problem solving and joint KPIs. There is an active shift from cost as a focus, to value.
Suppliers are also expected to justify their value through outcomes like service quality, transparency and programme support,” details Scott Davies, Chief Executive Officer of the Institute of Travel Management (ITM).
Complexity is a significant challenge. Travel content has proliferated and has also become more fragmented and buyers are having to make sense of dynamic pricing on NDC. At the same time, buyers expect a customised service, not one size fits all.
“These broader requirements bring increased intricacies, particularly around integrating with clients’ internal systems and third-party travel technologies,” states Stuart Birkin, General Manager of CTM Europe.
“The future will favour TMCs that invest in strong advisory capabilities, flexible service models, and a deep understanding of each client’s evolving business priorities”
Data is the glue in all of this, connecting travel managers, the programmes they deliver and their TMCs. With the rise of artificial intelligence and generative AI, data-driven personalisation and real-time traveller insights are now possible, particularly via mobile apps.
TMCs are being encouraged to harness their data more effectively and integrate AI in order to deliver smarter solutions.
“This shift has made it critical for travel managers to have a good handle on data and analytics,” says Rob Coomer, Senior Director, Global Customer Management, CWT.
Such data also allows buyers alongside TMCs to break down silos, since information can now be shared across divisions. Travel data can increasingly be integrated with data on risk management, ESG goals or traveller wellbeing. Buyers also expect joined-up conversations between their TMC and their suppliers, with more data. So, measuring the overall value of travel to an organisation becomes possible.
“The C-suite also have increasingly higher expectations of operations teams to report more extensively and regularly on planning, implementation and progress of travel programmes to show how they are helping fulfil wider business goals,” says Emma Horton, SilverDoor Senior Client Programme Manager.
One of these goals involves reducing the carbon intensity of travel, accounting for ESG mandates and reporting on sustainability initiatives, while adopting more eco-friendly travel options. Carbon emissions are a burning issue that TMCs are having to deal with, whether meeting Scope 3 targets or tracking progress.
It’s why many TMCs have teamed up with various partners in the ESG sector. They are quickly integrating solutions and data, as well as boosting their offering in this space. The aim is to deliver traveller behaviour change and impact. It is worth scrutinising partner credentials in what is a fast, evolving industry.
Meetings management
With this wider TMC remit, holistic budgeting is also coming to the fore, where travel budgets are considered part of the overall business expenditure. Increasingly meetings and events are being dovetailed into this. That’s because internal ‘energising’ events are becoming more important, and so are meetings as corporate revenue generators. This is why a growing number of TMCs have specialised meeting and events divisions.
Managing meetings and events is also now more complex. It is more than just venue sourcing and event and logistics coordination. TMCs have to help clients align their meetings’ strategies with wider company objectives, as well as accounting for overall cost control, sustainability goals and attendee wellbeing.
On the other hand, there’s been growing demand to consolidate business travel with meetings spend and its delivery. This route has allowed more control, integrated planning and cost efficiencies.
“Unifying budgets for business travel and meetings and events can lead to significant advantages, including saving money, improved management and enhanced policy compliance. By consolidating spend, organisations can secure better deals, streamline operations, and gain comprehensive insights into their total travel, meeting and event spend,” explains Donna Fitzgerald, Executive Director of Clarity Business Travel.
Forward thinking
So what of the future? “The pandemic accelerated the strategic importance of managed travel, and that momentum isn’t slowing down anytime soon,” points out Carrie McCabe, Vice President, Enterprise Customers, CWT.
She adds: “Ultimately, the future will favour TMCs that invest in strong advisory capabilities, flexible service models, and a deep understanding of each client’s evolving business priorities.”
From a travel management perspective, being a strategic partner to travel buyers over time allows the sector to add more value, generate more revenue and build loyalty. This move also allows TMCs to shape company culture, influence policy and ensure business continuity. However, their services will depend on mirroring the expertise and capabilities that travel managers are developing in-house.
“The travel manager of the future will function more like a programme strategist, integrating travel into business continuity, talent management, ESG, and cost-efficiency plans. Their role may overlap with procurement, HR and sustainability — requiring a broader skillset including data literacy, stakeholder management, and change leadership,” says Shelley Mathews, Chief Commercial Officer, Take2Eton Group.
“TMCs will become more embedded in clients’ operations, almost like an extension of the internal travel team. Rather than selling services, TMCs will provide ongoing programme optimisation, risk advisory and ESG consulting.”
With a potential global economic recession in the crosshairs, jitters over how US tariffs will play out across the world in terms of business sentiment, combined with further geopolitical tensions, the future looks harder to navigate. Buyers will therefore expect more agile, rapid and informed support from TMC partners going forwards in order to navigate volatile economic times.
The fact that there will also be greater data-driven automation and AI activity within the managed travel sphere means that TMCs will have to add value through experienced personnel and human interactions with a hard focus on business strategy. They will have to expand into new territory, including global mobility, remote work management and employee experiences.
“Ultimately, we want to make the travel buyers look good and this means always staying one step ahead,” concludes Davies from ATPI.
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