TMCs risk becoming obsolete, says report
Traditional travel management companies risk becoming obsolete, according to a report by online hotel booking portal HRS.
According to HRS’ latest UK Companies Business Travel Report, the number of companies using a single TMC has dropped by 14% in the last year, while among FTSE 500 companies the drop was even higher at 25%.
Instead, HRS says more companies are using a range of specialist agencies or are booking direct.
“TMCs need to address their business models if they want to be here in five years’ time,” said HRS commercial director Grant Appleton. “Corporates are seeing the benefits of using specialist agencies and booking direct in order to get the best deals, thereby making their budgets go further by reducing the cost of excessive management fees and financial kickbacks.
“In an age when, at the touch of a button, virtually anyone can compare the best deals around, TMCs must move swiftly in order to remain ahead of the game.”
HRS said its report identified a number of reasons for the drop, including concerns over transparency.
It said 61% of the companies surveyed believe they are steered by TMCs towards using specific suppliers.
HRS also claims that management and transaction fees have dropped by around a third in the last year as TMCs are forced to squeeze their margins by clients. It said fees for train travel and car rental have been particularly hit.
Meanwhile, the number of FTSE 500 companies now using a range of specialist agencies has doubled to 25%.
By Bev Fearis
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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