Seeing the light | Business Travel News Europe

A surprising statistic emerged when the UK-based Advantage Travel Partnership recently surveyed its travel management company membership. Of the 74 percent of TMCs that saw the number of customers increase during 2023, “almost half of these new business approaches are from companies that had previously organized business trips at home. This is a theme that we see in a way consistent,” the partnership said in its quarterly Global Business Travel Review, published in September.

Advantage is not the only organization seeing this trend. American Express Global Business Travel says 30 percent of its small and medium-sized business customers signed up in the three months to June 30 were not previously managed. It should be noted that Amex GBT defines SME as customers with a travel expenditure of up to US$30 million. Similarly, some unmanaged customers signed up by Advantage members have spent up to £2m, says Advantage global business travel director Guy Snelgar.

Although it may be surprising that even relatively large spenders have come this far without first managing their travel, an assortment of trends have aligned to produce them late in the arms of TMCs, according to Advantage, Amex and Lufthansa City Center, which also focuses on the SME market. Here are six key reasons why unmanaged companies have made this change.

Lessons learned from Covid

“The complexity of travel in those more disruptive times was certainly a big driver,” says Snelgar. During the pandemic, “companies that book their own travel became a can of worms because it was as much about dealing with this disruption as accessing a website and booking a flight. Cancellations, changes, refunds – navigating yourself through that whole process certainly led a number of companies to say “We need professional help. The general manager’s PA who books everyone’s trips can’t cope with anything else.”

Lack of employees

The general manager’s PA may be overwhelmed – or they may no longer be there at all. “In the past, these new customers had secretaries whose job was to book flights and hotels, but many of those employees have left, so now they come to us and ask ‘Can you help?'” says Lufthansa City Center, head of corporate travel. Stefan Pagel. “Travelers now have to book themselves, so we offer them an online booking tool, which is very easy to use.”

The search for efficiency

This was another, less obvious, consequence of Covid, according to Snelgar. “A lot of companies have said, ‘Blank sheet of paper – let’s do things differently now.’ We are asking for time to resolve some of those processes that have been a pain for many years,” he says.

In some cases, companies take the opportunity to rethink not only their journey, but also their management of expenses at once. “Someone has to manually process these expense claims, allocate them to the relevant cost center and reconcile the credit card statements,” says Snelgar. “Alternatively, a TMC can give you an invoice at the end of the month for a sum for all your trips without having done any work, in a statement with each trip broken down by cost center, department code, reason for travel or any information you have chosen, all reconciled and gathered in one place.

He adds: “At the same time, you know that every traveler is not only tracked from the point of view of the duty of care, but every change they make will be automatically updated.”

Sustainability requirements

“We’ve seen a lot of questions about sustainability reports, as well as diversity, equity and inclusion metrics,” says Rachel Tonge, Amex GBT vice president of SME client management for Europe, the Middle East and Africa.

Some SMEs get into travel sustainability because they want to. “Small businesses take sustainability very seriously,” says Tonge. “When you think about businesses that are started by younger individuals, Gen-Z, that’s the core of what they do.”

Others do it because they have to. “Sustainability has been a topic for large companies for years, but due to new laws, smaller and medium-sized companies now also need to report their carbon footprint,” says Pagel. “It is another reason that companies come to LCC and ask for help. No one knows how to bring back their carbon footprint. There is no sustainability person in their business.”

Snelgar considers sustainability one of the most influential factors of all for the conversion of unmanaged accounts. Smaller companies are not yet legally required to report their carbon emissions. However, he says, they find themselves needing to start tracking emissions anyway, when bidding for contracts from larger customers who are required to report the carbon footprint of their supply chain.

I work from home

Advantage no longer has an office in London. “We have members all over the country and now we can recruit people all over the country to connect with them, whereas before they had to be able to go to Old Street,” says Snelgar.

Advantage’s experience is replicated in many companies, Snelgar adds, and “with this virtual and increasingly disparate workforce, it’s incredibly important for companies to follow them,” he says. He also notes that bringing together dispersed employees for regular meetings pushes the use of business trips for internal purposes.

Save money

In the past, travel management was mostly about controlling costs. But is it still a compelling reason to hire a TMC, given that smaller companies with simple travel needs can be frugal by instructing employees to book low-cost carriers and budget hotels? “When we did the survey, cost savings or better value was the lowest response as to why these businesses are looking to work with a TMC,” says Snelgar.

Yet Pagel argues that price is increasingly a factor for SMEs, particularly in an increasingly fragmented distribution landscape. And even “when the price difference is not great, there can be big differences for the terms and conditions”, he says.

Tonge also considers cost control important. “We’re seeing a lot of macroeconomic pressures on prices,” she says. “We see companies that want to have a managed travel program to get savings. Working with a TMC of some scale can provide access to better hotel rates and airfares.”