It’s been almost two years since the start of COVID-19. Throughout the pandemic, business travel has been a hotly discussed and debated topic, with varying opinions on recovery depending on who you speak to. Having said that, there seems to be a consensus that business travel will return, however it may well look different than before. With that in mind, what are the biggest challenges and opportunities facing Travel Management Companies (TMCs)?
It’s been almost two years since the start of COVID-19. Throughout the pandemic, business travel has been a hotly discussed and debated topic, with varying opinions on recovery depending on who you speak to. Having said that, there seems to be a consensus that business travel will return, however it may well look different than before. With that in mind, what are the biggest challenges and opportunities facing Travel Management Companies (TMCs)? How can they not only recover but grow in this new world, and what are the practical solutions that will drive success in the months and years to come? These are the questions addressed in our latest e-book: 'Rebuilding Business Travel – Insights from global TMC leaders on the business travel industry outlook and recovery strategies for 2022
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One year after the release of “Reboot, Recharge, Rethink Business Travel”, we have taken the pulse of TMCs once again to understand where their priorities lie, and how we can work together to not just rebuild business travel, but to rebuild it better than it was before. Insights were gathered from 250 TMC executives around the world, through a quantitative survey and 1:1 deep-dive interviews, to get a full global and regional view of the situation. Here are some highlights from our findings:
What are the biggest opportunities for TMCs?
Most of the executives we spoke to saw several opportunities on the horizon. Half of the respondents believe a shift from unmanaged to managed business travel is underway, partially because of the rising logistical challenges of travel and high chances for disruption, the increased focus on optimizing travel spend, and the renewed emphasis on duty of care. One TMC reported that 75%of its newly signed customers did not previously use a TMC.
More than half of the TMCs forecast stricter travel policies, and one quarter anticipated increased demand for additional transactions that complement an airfare and encompass the whole travel journey.
TMC executives also see corporationsincreasingly requesting sustainability servicesas a central part oftheir TMC partner offering. The pandemic has intensified their determination to be more conscious in the choices they make. They will rely on their TMCs to guide them towards greener travel options and expect them to provide emissions data.
Finally, travel patterns are changing. TMCs are seeing a growth in bleisure trips. They are noticing fewer trips but longer stays, with a higher spend per trip, and that companies are willing to allow direct flights and premium cabins to ensure traveler safety. In addition, the small and medium enterprise market has proved more resilient than larger corporations, offering a new customer segment for TMCs to focus on.
What are the key challenges for TMC growth?
Staffing seems to be on everyone’s mind these days. Is now the time to recruit more staff, and if so, where does one find the best people? TMCs seem divided on these big questions. Another challenge is the time spent sourcing and relaying reliable COVID-19 travel information, and managing disruptions, at a time when government rules and regulations are constantly changing. Finally, technology costs, and accessing full travel content, including NDC, rail, and low-cost carriers, are other challenges that could potentially stunt TMC growth.
What are the key solutions to TMC growth?
Diversification to new revenue sources is the top priority for nearly 70% of TMCs. This could involve attracting new types of customers, selling a deeper pool of content (which 42% of TMCs intend to do) or creating additional services (40%). For example, many TMCs are looking to exceed customer demand with enhanced duty of care, with solutions like Amadeus Travel Safety Conditions. This provides accurate COVID-19 risk levels and up-to-date rules and safety measures. In addition, TMCs are looking to improve their accommodation offering and sales, and are relying on new sustainable travel management tools, whilst also developing leisure and bleisure sales.
To support this growth, TMCs are looking to upgrade both customer-facing and enterprise technology, and to reboot corporate strategy. This includes new ways of working: to hire and retain the best talent, some TMCs are looking at new work from home policies, automating manual tasks and recruiting new skill sets.
The TMCs see their glass half-full
The TMCs and we at Amadeus share the view that business travel will rebound – albeit it in a different shape. Growth might be slow, and dependent on several external factors out of the hands of the TMCs. Yet, the silver lining is that companies that engage in business travel see the value of TMCs more than ever before. New needs are emerging, and corporate clients are looking to TMCs to help meet those new demands – to provide a whole new level of service and information, to manage sustainability issues, and to keep travel costs under control.
There is no question that TMCs need to find new ways to grow profitability, but the industry’s top leaders are embracing the change, and are already exploring new avenues to expand their horizons: whether it’s with new customers, more content, new services, different staff profiles, better technology, new business models - or all of the above.
These are just some of the trends we’re seeing on a global level. To go more in depth and to get detailed regional insights, including thoughts from top executives on unique trends in APAC, EMEA and the Americas, download our eBook ‘Rebuilding Business Travel – Insights from global TMC leaders on the business travel industry outlook and recovery strategies for 2022
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