the tmc model is there a smarter way? cbtg boston – august 4, 2011
TRANSCRIPT
The TMC ModelIs There A Smarter Way?
CBTG Boston – August 4, 2011
• Objective & Process Today
• Antitrust Ground Rules
• Relevant Background
• Value Proposition Exercise
Good Morning
• Traveler tracking
• Full content
• Global relationships
• Timely, accurate reporting
• Good self-booking tool
• Mobility platform
• Proficient agents
• Single source customer service
• Analysis & savings ideas
Travel Manager & TMC Feedback
What are the must-have deliverables today to corporate travel programs from TMCs?
• Traveler tracking
• Full content
• Global capabilities
• Accurate reporting
• Multiple GDS capability
• Consulting services
• Personalized service
• After hours reservations center
• Ticket tracking (unused, non-refundables)
TRAVEL MANAGER TMC EXECUTIVE
• GDS
• Customer service
• Booking tool
• Social networking tools
• Industry knowledge
• Central data repository
• Travel policy administration
Travel Manager & TMC Feedback
What are the key benefits of the current TMC model for your organization? What’s really
working well; worth preserving?
• GDS incentives working well
• Professional counselors
• Vendor liaison
• Client advocate
• Crisis management services
TRAVEL MANAGER TMC EXECUTIVE
• Supporting policy compliance
• Locating travelers in time of crisis
• Supplier negotiations*
• Data management & reporting
• Transparency in spend
• Superior customer service
• One-stop shopping
• Ally with suppliers
Travel Manager & TMC Feedback
Where does the TMC add the greatest value today?
• Policy control
• Risk management
• Negotiated savings
• Capturing data centrally
• Efficient travel operations
• Cost savings ideas
• Experienced people
• Technology
TRAVEL MANAGER TMC EXECUTIVE
• Offerings however the traveler wants them
• Better global support
• Better data
• Better customer relationships
• More consultant than agent
Travel Manager & TMC Feedback
Where could a TMC add greater or totally new value?
• Mobile systems
• Better global reporting
• Better support of online booking systems
• Address existing flawed pricing model
• Ability to book all products through the GDS
TRAVEL MANAGER TMC EXECUTIVE
• Financial transparency
• Traveler access to expertise
• Too GDS dependent
Travel Manager & TMC Feedback
What are the key deficiencies of the current TMC model for your organization? What’s really
broken, in your view?
• Securing real-time global data
• Pricing model
• Constant unbundling
TRAVEL MANAGER TMC EXECUTIVE
• Monthly management fee a better model
• Yes, easy to allocate costs
• Annual management fee would be better
Travel Manager & TMC Feedback
Does the TMC transaction fee, as a central component of the current model, remain useful?
Is there a smarter approach to TMC compensation?
• Transaction fee works if there is transparency in costs to provide services
• Cost plus model better
• Transaction fee does not capture efforts where no transaction takes place
TRAVEL MANAGER TMC EXECUTIVE
• Consult on mobile
• Consolidate traveler servicing to one expert group
• Figure out how to collect a higher percentage of hotel commissions
• More consultative assistance with supplier contracting
• Help with meetings management
Travel Manager & TMC Feedback
Are there TMC revenue opportunities worth exploring that could help sustain the model and
benefit both TMCs and corporate clients?
• Diversify portfolio to include peripheral solutions to include solutions for global traveler
• Manage more information and products
• Sell airline ancillary services
• Lower transaction fees and unbundle work products
TRAVEL MANAGER TMC EXECUTIVE
• Secure all content
• Work as data management company rather than as a travel fulfillment vehicle
• Reduce GDS dependence
Travel Manager & TMC Feedback
What overall changes would you recommend to the current TMC model, if any at all?
• Focus on mobile
• Expand services
• Greater TMC / client collaboration Vis harmful supplier policies
• Work toward multi-sourcing systems
TRAVEL MANAGER TMC EXECUTIVE
• Would reconsider old fashioned rent-a-plate or CTD
• Direct connections with vendors
Travel Manager & TMC Feedback
Are there whole new models worth exploring that you have considered?
• Multi-sourcing environment
• Yes, but the marketplace is not ready for them
TRAVEL MANAGER TMC EXECUTIVE
• Greater flexibility and speed to make program changes
• Clients need to help TMCs develop new products and services
Travel Manager & TMC Feedback
Are there other thoughts and ideas that you would like to add?
• Corporate procurement has caused a shift in focus to the 2% transaction cost away from the 98% total cost
TRAVEL MANAGER TMC EXECUTIVE
What Could A New Model Look Like?
The TMC Model
• Full content• Traveler tracking• Booking tool• Data & reporting• Analysis & cost-savings ideas• Mobile platform• Global capabilities
Must Deliver
• Travel / procurement manager performance measurement
• Cost allocation to business units
• Compelling business case
control of programcost savingsnew valuequantifying program successrisk mitigation
Barriers To Change
• Status quo transaction fee model; improve value proposition communications
Financial Options
Benefits
Drawbacks
Variations
• Status quo transaction fee model; improve value proposition communications
• Cost plus
Financial Options
Benefits
Drawbacks
Variations
• Status quo transaction fee model; improve value proposition communications
• Cost plus
• Management fee
Financial Options
Benefits
Drawbacks
Variations
• Status quo transaction fee model; improve value proposition communications
• Cost plus
• Management fee
• Lower transaction fee; unbundle services
Financial Options
Benefits
Drawbacks
Variations
• Status quo transaction fee model; improve value proposition communications
• Cost plus
• Management fee
• Lower transaction fee; unbundle services
• Zero transaction fee for online
Financial Options
Benefits
Drawbacks
Variations
• Status quo transaction fee model; improve value proposition communications
• Cost plus
• Management fee
• Lower transaction fee; unbundle services
• Zero transaction fee for online
• Other?
Financial Options
Benefits
Drawbacks
Variations
• Status quo transaction fee model; improve value proposition communications
• Cost plus
• Management fee
• Lower transaction fee; unbundle services
• Zero transaction fee for online
• Other?
Financial Options
Benefits
Drawbacks
Variations
• Flesh out models
• BTC analysis to the industry
• Broad travel manager survey
• Regroup with you
• Expand BTC Kitchen Cabinet
Immediate Next Steps
Thank You!