The MacNair Travel Leadership Blog

A Travel Management Company & Travel Agency Are NOT the Same Thing

Posted by Mike MacNair on Apr 24, 2014 2:35:00 PM

TMC_vs_TravelagencyAt times the challenge with introducing a new travel procurement program is that your staff can think that you have just hired a travel agency to help them with travel. First of all, many don’t think they need help booking their trip. Secondly, they have no idea what a Travel Management Company does versus a travel agency. 

So let’s start with not needing help making their travel arrangements. Quality TMCs have both online and call in systems to make easy and complex reservations however the traveler sees fit 24/7 in a managed environment. They also have teams to construct complex muti-leg international itineraries or even change/support reservations when schedules change or weather disrupts the industry. So at one point every traveler is going to need some help to get out of a jam and/or save time. When we say a managed environment we mean that the resulting reservation will make the traveler and the company who is purchasing the trip as happy as possible based on some defined policies, procedures and systemic expectations.

When you Google Corporate Travel Management (CMT) you come up with the following Wikipedia definition: CTM is the function of managing a company’s strategic approach to travel (travel policy), the negotiations with all vendors, day-today operation of the corporate travel program, traveler safety & security, credit-card management and T&E data management. CTM should not be confused with the work of a traditional Travel Agency. While agencies provide the day-to-day travel services to corporate clients, they are the implementing arm of what the corporation has negotiated and put forth in policy.*

In other words, CTM decides on the class of service that employees are allowed to fly, negotiates corporate fares/rates with airlines and hotels as well as sets forth the use of the corporate credit card. The agency on the other hand makes the actual reservation within the parameters given by the corporation and develops, supports, and or enforces the desires of both the company and its travelers. For most companies “travel & expenses” (T&E) costs represent the second highest controllable annual expense, exceeded only by salary & benefits, and is commonly higher than IT and/or real estate costs. T&E costs are not only limited to travel (airline, rail, hotel, car rental, ferry/boat, etc.) but include all costs incurred during travel such as staff & client meals, taxi fares, gratuities, client gifts, supplies (office supplies and/or services), etc. Furthermore, this area often includes meeting management, traveler safety & security as well as credit card and overall travel data management. The management of these costs are usually handled by the Corporate Travel Manager, a function that can be part of the Finance,HR, Procurement or Administrative Services Department. As this function touches on all of these areas in some form and represents such a major corporate expense, it stands to reason that this function should have equal ranking within a corporation as any other major division and not be seen as a sub-set of existing departments.

So if you fully leverage these travel management opportunities, communicate what you will be having your TMC do from a B2B standpoint, clarify the difference between the B2B relationship you have established versus a retail travel agency relationship, track the results, and share progress and expectations with you team,  you can expect more compliance with the big picture value you should expect.

Managed Travel Needs Assessment Checklist

Topics: Travel Management, Procurement