Business Travel and Corporate Travel Management, Explained

Summary

The video script introduces the world of corporate travel, highlighting the role of travel management companies (TMCs) in facilitating business travel. It discusses the evolution of TMCs from traditional agencies to essential partners, offering expertise in travel programs, expense tracking, and policy enforcement. The script also explores the value-added services of TMCs, such as disruption management and personalized customer support, and how they generate revenue through service fees and commissions, emphasizing the importance of TMCs in optimizing corporate travel operations.

Takeaways

• 🌐 Corporate travel is a significant part of the global economy, connecting business professionals worldwide and contributing to the second largest expense in most enterprises after salaries.
• 📈 The rise of travel management companies (TMCs) was prompted by the need for specialized expertise in managing the complexities of business travel, including employee movement and corporate spending.
• 💳 The introduction of corporate expense tracking by American Express in 1966 marked the beginning of a more structured approach to corporate travel management, which later evolved with the emergence of TMCs.
• 🛫 Business travelers are less price-sensitive and more focused on punctuality and comfort, which is why they account for a significant portion of airline revenue despite making up a smaller percentage of total air travel.
• 🤝 TMCs act as intermediaries between corporations, suppliers, and technology providers, ensuring that business travelers reach their destinations safely and efficiently.
• 🛍️ Large corporations often have the ability to negotiate direct deals with suppliers, but they still rely on TMCs for the value-added services they provide, such as flexibility and disruption management.
• 🔄 TMCs offer personalized customer service and 24/7 support, which is crucial for handling unexpected travel disruptions and ensuring business continuity.
• 📋 TMCs help develop and enforce travel policies, manage risk, and oversee duty of care, which is essential for maintaining order and safety within a corporation's travel program.
• 📊 Data interpretation and visualization provided by TMCs help corporations understand their travel expenses and make strategic decisions regarding negotiations with suppliers.
• 🛑 TMCs also handle meetings, incentives, conferences, and exhibitions (MICE) tourism activities, showcasing their ability to organize and manage various aspects of business travel.
• 💼 The services provided by TMCs extend far beyond booking flights and hotels, including niche industry specialization, carbon footprint alignment, visa assistance, travel insurance, and payment solutions.

Q & A

What is the purpose of the new video series by Altic Soft's managing director, Carol Study?

The purpose of the new video series is to shed light on the intricacies of corporate travel and the vital components that keep the wheels of business turning smoothly.

Why did the mid-20th century see a rise in the need for business travel management?

The rise in business travel management was due to the increasing complexities of travel needs for organizations, which required specific expertise beyond just making reservations.

What is the role of travel management companies (TMCs) in corporate travel?

TMCs offer professional assistance to large corporations, ensuring the safe and efficient movement of employees around the world and managing how corporate funds are spent on travel.

When did American Express introduce corporate expense tracking, and how did it impact the market?

American Express introduced corporate expense tracking in 1966 with its first corporate credit card, which took a couple of decades to influence the market and the emergence of real TMCs.

How did technology solutions in the '90s and 2000s change the corporate travel industry?

Technology solutions lifted corporate travel management to new heights by introducing flight and hotel booking tools, expense management systems, reporting, analytics, and other advancements that are now integral to the industry.

What is the significance of business travelers to airlines, and why are they different from leisure travelers?

Business travelers are significant because they account for a large portion of airline revenue due to their preference for punctuality and comfort over price sensitivity. They are different from leisure travelers in that they value timely arrivals and have unique needs.

Why might a corporation still need a TMC even if they can negotiate their own deals with suppliers and adopt existing software?

Corporations need TMCs for the value-added services they offer, such as flexibility, disruption management, personalized customer service, travel policy enforcement, and duty of care, which help corporations manage their travel operations efficiently.

What are some of the specific services that TMCs provide to ensure efficient corporate travel?

TMCs provide services such as 24/7 customer support, travel policy development and enforcement, risk management, approval workflows, expense tracking, data interpretation, and supplier relationship management.

How do TMCs contribute to the organization of MICE tourism activities within corporate travel?

TMCs can organize MICE activities by setting up events, booking venues, managing catering, organizing group travel, and handling logistics for various types of business-related travel.

What are some of the misconceptions about the role of TMCs in the corporate travel industry?

One misconception is that TMCs only resell travel products or offer their tech solutions. In reality, they provide a wide range of services tailored to a corporation's unique needs, including technology consulting and value-added services.

How do TMCs generate revenue if they are not just reselling travel products or offering their tech solutions?

TMCs generate revenue through service fees, commissions, markups over supplier net rates, and fees for value-added services such as technology consulting, risk management, and other specialized services.