Transcript Document
The TMC Model Is There A Smarter Way? CBTG Boston – August 4, 2011 Good Morning • Objective & Process Today • Antitrust Ground Rules • Relevant Background • Value Proposition Exercise Travel Manager & TMC Feedback What are the must-have deliverables today to corporate travel programs from TMCs? TRAVEL MANAGER • Traveler tracking TMC EXECUTIVE • Traveler tracking • Full content • Full content • Global relationships • Global capabilities • Timely, accurate reporting • Accurate reporting • Good self-booking tool • Multiple GDS capability • Mobility platform • Consulting services • Proficient agents • Personalized service • Single source customer service • After hours reservations center • Analysis & savings ideas • Ticket tracking (unused, non-refundables) Travel Manager & TMC Feedback What are the key benefits of the current TMC model for your organization? What’s really working well; worth preserving? TRAVEL MANAGER TMC EXECUTIVE • GDS • GDS incentives working well • Customer service • Professional counselors • Booking tool • Vendor liaison • Social networking tools • Client advocate • Industry knowledge • Crisis management services • Central data repository • Travel policy administration Travel Manager & TMC Feedback Where does the TMC add the greatest value today? TRAVEL MANAGER • Supporting policy compliance TMC EXECUTIVE • Policy control • Locating travelers in time of crisis • Risk management • Supplier negotiations* • Negotiated savings • Data management & reporting • Capturing data centrally • Transparency in spend • Efficient travel operations • Superior customer service • Cost savings ideas • One-stop shopping • Experienced people • Ally with suppliers • Technology Travel Manager & TMC Feedback Where could a TMC add greater or totally new value? TRAVEL MANAGER • Offerings however the traveler wants them • Better global support • Better data • Better customer relationships • More consultant than agent TMC EXECUTIVE • 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 Feedback What are the key deficiencies of the current TMC model for your organization? What’s really broken, in your view? TRAVEL MANAGER TMC EXECUTIVE • Financial transparency • Securing real-time global data • Traveler access to expertise • Pricing model • Too GDS dependent • Constant unbundling 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? TRAVEL MANAGER • Monthly management fee a better model • Yes, easy to allocate costs • Annual management fee would be better TMC EXECUTIVE • 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 Feedback Are there TMC revenue opportunities worth exploring that could help sustain the model and benefit both TMCs and corporate clients? TRAVEL MANAGER • 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 TMC EXECUTIVE • 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 Feedback What overall changes would you recommend to the current TMC model, if any at all? TRAVEL MANAGER TMC EXECUTIVE • Secure all content • Focus on mobile • Work as data management company • Expand services rather than as a travel fulfillment vehicle • Reduce GDS dependence • Greater TMC / client collaboration Vis harmful supplier policies • Work toward multi-sourcing systems Travel Manager & TMC Feedback Are there whole new models worth exploring that you have considered? TRAVEL MANAGER TMC EXECUTIVE Would reconsider old fashioned rent-a-plate or CTD • Multi-sourcing environment • Direct connections with vendors for them • • Yes, but the marketplace is not ready Travel Manager & TMC Feedback Are there other thoughts and ideas that you would like to add? TRAVEL MANAGER • Greater flexibility and speed to make program changes • Clients need to help TMCs develop new products and services TMC EXECUTIVE • Corporate procurement has caused a shift in focus to the 2% transaction cost away from the 98% total cost The TMC Model What Could A New Model Look Like? Must Deliver • Full content • Traveler tracking • Booking tool • Data & reporting • Analysis & cost-savings ideas • Mobile platform • Global capabilities Barriers To Change • Travel / procurement manager performance measurement • Cost allocation to business units • Compelling business case control of program cost savings new value quantifying program success risk mitigation Financial Options • Status quo transaction fee model; improve value proposition communications Benefits Drawbacks Variations Financial Options • Status quo transaction fee model; improve value proposition communications Benefits Drawbacks Variations • Cost plus Financial Options • Status quo transaction fee model; improve value proposition communications Benefits Drawbacks Variations • Cost plus • Management fee Financial Options • Status quo transaction fee model; improve value proposition communications Benefits Drawbacks Variations • Cost plus • Management fee • Lower transaction fee; unbundle services Financial Options • Status quo transaction fee model; improve value proposition communications Benefits Drawbacks Variations • Cost plus • Management fee • Lower transaction fee; unbundle services • Zero transaction fee for online Financial Options • Status quo transaction fee model; improve value proposition communications Benefits Drawbacks Variations • Cost plus • Management fee • Lower transaction fee; unbundle services • Zero transaction fee for online • Other? Financial Options • Status quo transaction fee model; improve value proposition communications Benefits Drawbacks Variations • Cost plus • Management fee • Lower transaction fee; unbundle services • Zero transaction fee for online • Other? Immediate Next Steps • Flesh out models • BTC analysis to the industry • Broad travel manager survey • Regroup with you • Expand BTC Kitchen Cabinet Thank You!