Travel agencies

Advocacy to abandon business travel agencies forever

Skift take

Here we have the proponents of a future where companies employ their own “travel architects” and agencies become obsolete. But it’s hard to gauge how long it will take technology to catch up with their vision. Nothing moves fast in the world of business travel.

Matthew Parsons

It defies logic for a company to cut ties with its travel agency in these uncertain times, but that’s exactly what a consulting firm advocates.

In fact, based in the United States Travel advice in partnership asserted that there has never been a better time for corporate travel managers to create their own program, taking back direct control of their technology and traveler services.

The reason is that companies will otherwise miss out on the innovative new platforms of many startups when the technology is advanced enough that it is easy to plug them in. And it’s also a perfect opportunity to make the switch as most organizations are in a “Covid reset” phase as they come out of the pandemic.

Yet the concept goes against the grain at a time when employees may be in need of a human touch as they begin to book their first business trips in a long time. Vaccine regulations and border restrictions persist, despite some countries relaxing their rules.

Total dependency

Partnership Travel Consulting defines three steps in order to “build your own” travel program: light, deep and total.

Light is where a travel management company operates, but the sourcing, online booking tool, and profile management system is handled in-house. The “deep” phase is the weaning process, during which the travel agency no longer deals with price negotiations or traveler tracking, as they are all integrated internally. But they would continue to handle offline reservations and 24-hour support.

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The travel agency does not run any services in the third scenario except to help recruit the company’s new internal travel team, or offer assistance in acquiring a license from the International Air Transport Association, which is required to issue airline tickets. Having learned that their services are no longer needed, one wonders how many people would stay at this point.

Giving up a travel agency isn’t just for the brave, it’s also for the big spenders. Partnership Travel Consulting recommends that a business should spend at least $ 10 million on travel per year to see the efficiencies.

If only it were that easy, says a sourcing expert.

“It’s a classic case of make versus buy,” said Chris Pouney of Severnside Consulting. “Essentially, this approach to building your own program feeds off what the Kraljic Matrix says – a method used to segment purchases or providers of goods or services -: whether it’s expensive, or too simple, or if there aren’t enough quality suppliers, you might want to consider doing it yourself.

He added that some companies have conducted similar exercises, due to business continuity issues. They are assessing what would happen if their own travel agency collapsed.

“If you spend a lot on travel, ask what it looks like if we do it on our own,” he said. “But what’s interesting here is that there is a risk. What if a business employs 10 people, but only needs five. With a travel agency, you can tweak the numbers a bit more. And the reason why companies don’t tend to do this is because it’s not their core business, there is a risk. “

On the money side, Partnership Travel Consulting argues in its white paper that companies can save more money because they divert the agency’s hotel commissions into their own pockets.

Early adopters

A company has already embarked on this adventure and, as a result, its travel manager sees his travel agency “open” to the idea.

“The agency can continue to play a role,” said Katharina Navarro, Global Head of Travel Category at Gapgemini, during recent conference. “We see them open up a little more. Rather than them doing and owning it all, it’s about creating a new governance structure. The travel management company has a place to play as an interface, bringing things in, but bringing things that I choose. “

Navarro has previously explained how Capgemini’s (pre-Covid) annual travel expense of $ 600 million will likely be significantly reduced anyway.

A startup executive speaking at the same event said travel managers should be able to say “I’m going from this to that, and I’m live now,” with one click. “Sometimes there’s a great new idea that you should be able to plug in without the traveler ever seeing you change the pipelines,” noted Johnny Thorsen, vice president, strategy and partnerships at Spotnana – a new travel technology company backed by Concur founder Steve Singh.

Thorsen believes corporate travel managers will soon embrace what are called micro-services – in his words, services designed to do one thing extremely well, but also designed to connect to other services. “If you go down this road, and what it can mean, then today we have a lot of products in the travel industry that will potentially become obsolete,” he added, noting how the PNR, or passenger name registration was out of date. -by date.

In the future, then travel managers will become architects or designers, he continued. “It’s about being creative with a lot of ability… (it’s) the next step in being brave enough to break out of the historic setup of a travel management company.”

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