Tapping into TMC intelligence

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During 2011, it is expected that corporates will increasingly leverage the unique strengths and abilities of their travel managers to boost bottom line savings.

As a result, travel management data on client purchasing patterns, benchmarking and ROI (return on investment) as well as a travel manager's ability to negotiate competitive supplier deals and provide best-in-class technology, will be high on the priority list for corporates keen to capture every travel cost saving possible over the next 12 months.

For the travel buyer negotiating the road ahead, having access to in-depth travel management reporting and information will ensure your organisation can effectively drive time, cost and resource efficiencies across all aspects of your travel program as market conditions continue to change.

Travel management priorities

Benchmarking

FCm predicts that during 2011, corporates will make more use of TMC-provided benchmarking for comparative purposes and for gaining a greater understanding of which hotel rates and airfares are best suited to their specific needs. Clients with access to TMC benchmarking will be better placed to evaluate the effectiveness of their travel programs and to set goals for the future.

TMCs will also continue to benchmark low cost carrier (LCC) fares against full-service airline fares to ensure clients receive the most up to date airfare guidance available. As the visibility and service offering of LCCs increase, corporates need access to timely data on what the best procurement strategies are for their air travel. For business travellers that require more than just a basic seat and some level of flexibility, a 'no-frills' fare on an LCC may not be the most cost effective option.

Airfare and hotel rate expertise

As an airfare and hotel specialist, FCm believes more clients will be looking to optimise their travel spend with the help of expert data including airfare analysis and comparison studies, benchmarking and supplier consolidation knowledge.

TMCs will be helping corporates maximise trip savings with more effective use of rates, from fixed last minute rates (distressed availability) to flexible corporate rates. A travel manager's ability to provide and match the right rate for certain trips will be crucial for getting the best price eg. fixed rates for planned trips such as internal meetings and training versus customer or prospect meetings that may need to be changed and require flexible rates.

Outsourcing supplier negotiations

It is predicted more organisations will look at outsourcing their supplier negotiations to TMCs that have strong supplier relations, industry knowledge and negotiating skills. With many corporates eager to generate more time and operational efficiencies within their organisation, outsourcing will play a major role in aiding this process.

Consolidation

FCm anticipates that during 2011, there will be further consolidation of corporate travel programs as multinational firms realize the major financial and servicing benefits of having a consistent approach to travel management. For customers trading with FCm in multiple markets, this means having access to the best rates around the world, irrespective of their departure port.

Key industry suppliers are also expected to announce new alliances as they seek to aggressively extend networks and share their cost base. Current examples include the Virgin Group and Etihad in Australia, British Airways and Iberia in Europe.

The benefit for customers will be the ability to interline with multiple suppliers and achieve better rates by negotiating unique deals under these circumstances. FCm believes it's crucial that TMCs are advising customers of these and other supplier updates for travel buyers to stay ahead of market trends and capitalise on industry changes.

Technology

There's no doubt technology is set to play a major role in the future of business travel with travellers gravitating towards online services that are increasingly mobile, informative and easy-to-use. From iPhone applications (currently considered to be the hottest trend in travel technology) to mobile phone technology, online booking and reporting tools, iPads, self-service check in and biometric advancements in passport identification, the rapid and ongoing development of technology in 2011 will see today's gadget become tomorrow's standard. TMCs will play a key role in the development, ownership and implementation of a number of these innovations.

Safety and security

The focus on safety and security is set to continue as corporates ensure their duty of care and risk management plans are capable of mitigating the risks faced by the modern day business traveller. The role of the TMC to advise on best practice, help facilitate risk management strategies and provide a central point of contact on all travel bookings will continue to develop.

Cost saving measures

Corporates eager to achieve maximum savings on business travel in 2011 will be focused on evolving their cost control strategies to suit the changing market conditions. FCm has highlighted five main focus areas for corporate travel programs including:

• ROI - corporates will be more closely monitoring the spending habits of individual travellers to gain a better understanding of how, when, where and why their travel dollars are being spent. As part of this, companies will be reviewing the return on investment (ROI) of individual traveller costs and asking if the business outcomes produced by a travelling employee are generating sufficient ROI for the outlay.
• traveller policy and compliance - we expect updated travel policies will include tighter guidelines around booking procedures and purchasing practices. Companies will be asking their TMCs to drill deeper on data to obtain actionable intelligence that will help to drive policy hard and realise savings faster. Divisional or cost centre managers receiving summary reporting and drill down data, will be taking immediate action on non-compliant bookings. There will be tighter control over the types of air tickets travellers are purchasing and how far in advance tickets are being purchased.
• online booking tools - this year we'll see wider interest in online booking tools provided by a TMC rather than online bookings made over the internet. The cost saving benefits as well as the additional traveller safety and security of an online booking tool have been major drawcards for corporates that want to continue booking online but that want the travel policy management, reporting and compliance functions of a TMC operated online system.
• airfares - corporates will be looking to their TMCs for specialised airfare data and analysis to drive savings on air travel. FCm expects broader interest in ROI investment data on aspects such as best fare of day policy versus negotiating with airlines, how advance purchase is impacting travel cost savings and how the use of flexible fares and or low-cost options affect their bottom line.
• accommodation consolidation - current trending indicates corporates are now more focused on consolidation and policy compliance to secure the best contracted rate. Companies are looking closely at how many hotel suppliers they are working with, which hotels their travellers are staying at and what their booking channels are. Corporates will continue to reign in the number of hotels they're using to better leverage their total room night volume.

Expanding role of the TMC

The evolution of the TMC's role into an all encompassing travel and expense manager, advisor, facilitator, educator and gatekeeper will continue to gain momentum in 2011. At FCm however, our travel specialists have long been fulfilling these roles and you can be assured that as a client of FCm - one of the world's top TMCs, your organisation is in the best position to adapt to the constantly evolving environment of corporate travel.