The MacNair Travel Leadership Blog

Travel Management vs. Travel Agency: The Value is Clear

Posted by Mike MacNair on Apr 7, 2016 12:00:00 PM

Travel Management vs. Travel Agency: The Value is ClearAccording to Skift, U.S. and foreign carriers flew more than 895 million passengers through U.S. airports in 2015 – a new record. Millions of people, both business and personal travelers, used online services to manage the sometimes-complicated travel booking and reservation system, many of them enlisting the services of a travel agency.

Business travelers benefit from organizations that utilize the services of a travel agency or travel management company (TMC) to effectively organize their travel services. Yet, travel agencies do not provide the high level and high value of service that a travel management company can provide to a business; and in fact, there continues to be a disconnect between the added value a TMC brings to your businesses’ corporate travel management program versus that of a travel agency.

Simply put, a TMC can create a clearer, more effective path to managing travel while at the same time, save your business valuable time and money and provide a systematic travel process, financial predictability and compliant travelling employees, even before the actual reservations are booked.

Learn how to create an effective travel policy here.


Travel Management Benefits

On the outside, SME’s may believe that the benefits provided from a travel agency and a TMC are similar: both offer personalized service with the ability for easy, online booking. That’s where the similarities end. Travel agencies work to benefit their suppliers, for example; travel management companies work to benefit their customers, providing the highest level of expertise and strategic direction to most effectively manage your business’ corporate travel program, in turn generating the best results for your business.

Following are the top benefits that a TMC can provide your business, generating clear strategic value for your travel program.

1. A TMC will align systems and processes first, to efficiently manage your travel and expense (T&E) line item. The T&E line item is the second largest controllable cost in an organization. When you work with an expert travel management company, their first and most important steps should include the following:

  • Ensure your travel policy is complete and up-to-date with your business’ unique requirements that balance the needs of travelers and your organization. Ensuring this document is in place and being utilized will increase compliance and provide the needed structure for your travel program.
  • Review and make recommendations (as necessary) on the best and most efficient automated travel and expense management system for your business. In the Travel and Expense Management Technology Insight Report from PayStream Advisors, the 2014 survey found that “manual data entry ranks as the number one challenge that organizations face in the expense management process.” A broader business solution (that includes automation) integrates your overall business software with your online booking tool, making sure that it’s easy for travelers to comply with travel policy and report expenses as needed, eliminating the use of spreadsheets, potential inaccuracies with expense reporting, and slow reimbursements. The use of an automated system can save time and money, while supporting travelers and ensuring travel policy

2. An expert TMC will provide resources and industry knowledge to support travelers and your business. Utilizing the myriad of online resources, your TMC can develop, integrate and support an online booking and expense management system that allows your travelers ease in managing travel and provides the needed support to your travelers while they are on the road.

A TMC’s knowledge and availability of resources can prove to be invaluable to your business. Real-time traveler tracking ensures your road warriors are safe and supported when travelling to potentially unsafe parts of the world; online trip itinerary management keeps travelers organized and provides easy expense reconciliation; knowledge of data management including the best processes by which to organize this data can help with corporate travel budgeting and travel policy compliance. A TMC’s resources and knowledge provide value to your business’ corporate travel program that cannot be matched by a travel agency.

3. Finally, an exceptional TMC provides unparalleled cost and time savings for your business. Results show that working with a TMC can create a 10-20% savings within your T&E budget line item. Working with thousands of travelers on a regular basis provides industry and vendor knowledge, vital in the travel procurement process, resulting in successfully negotiated travel vendor discounts. Travelers may benefit from airline class of service upgrades, for example, because of a TMC’s knowledge and relationship with a particular airline.

In addition, the employee time saved when a TMC can procure and manage all aspects of travel, including booking, approvals, changes and reimbursements, creates a significant increase in productivity throughout your organization.

When you work with a travel management company, the above items are addressed even before your road warriors begin the online booking process; TMC’s focus on developing the systems and processes that will support your travelers and your business’ travel management program, creating value for your business that far outweighs the possible benefit of using a travel agency.

Globalization, the instant availability of information, and increased competition increases the need for corporate travel within your business. Utilizing the full value provided by a travel management company will not only positively impact your bottom line, but will also provide the necessary processes to ensure travel policy compliance, budget predictability and control over your corporate travel management program.

Are there additional points of value you would like to see a TMC provide? Please share your comments below. If you’re interested in learning more about reducing costs and improving performance within your travel management program, Download the whitepaper: TMCs- What They Mean for Your Company.


Topics: Travel Management