What role do TMCs play against inflation?
As business travel starts to pick up, the sector's stakeholders are facing yet another challenge: inflation. Although its impact on recovery is limited for the time being, it is still a cause for concern.
In July 2022, GBTA surveyed over 400 business travellers and travel budget decision makers. According to this survey, 73% agree that inflation will impact business travel.
Stronger recovery than expected, sold out planes, trains and hotels, soaring prices, etc. For companies and buyers, there is very little room for manoeuvre and they no longer have the same bargaining power as they did in the past. Have suppliers finally seized control? In view of these new challenges, TMCs must find the right strategies to help companies provide effective support for their travellers whilst controlling costs. At the heart of this ecosystem, TMCs have to find the right balance between technology and people
TMCs: strategic support to combat inflation
In addition to deciding when and to what extent employees should resume travel, companies also need to decide whether travel is necessary. To help this analysis, Deloitte's Consumer Industry Centre has devised a "reasons for travel matrix" called “why we fly”, presenting a structured view of the impact that tech replacement could have on travel in the longer term. The aim is to plot the reasons why companies travel on this matrix.
As a TMC, our aim in this context is to advise and support companies to ensure that their travel is always ever more relevant. We identify alternatives so that they can meet their goals without having to worry about imposed budgetary constraints. In particular, we set up methods to discourage travel that does not seem all that essential. To assist companies to the best of our ability, we offer comprehensive support as well as a matrix for assessing the importance of travel and reporting in order to measure purchases that have not been made. Ultimately, we strive to align the company's interests with those of travellers.
TMCs, an essential role in business travel
TMCs help companies adapt their travel policy to meet current challenges using strategic tools and analysis methods developed according to the needs of each company and following its size and sector of activity.
To be effective, the travel policy needs to be flexible. It is essential to react to changes rather than simply follow a plan. The Travel Manager must listen to employees, analyse the data and make it available in-house. Data analysis is only possible if the company has a reporting and monitoring system that consolidates all travel-related data. The aim is to benefit from the best possible visibility in terms of travel costs.
Inspired by concepts used in software engineering, FCM uses the agile method, a technique which involves breaking the project down into several phases. It implies constant collaboration with stakeholders and continuous improvement at every stage. Once the work has started, teams follow cycle of scheduling, implementation and evaluation. Thanks to this method, companies will be able to point their teams in the right direction so that they can get the most out of their travel programme.
In companies, 70% of attempts to change a travel policy fail. This is due to the fact that employees do not feel sufficiently informed or included in decision-making. They need to be better informed at every stage of the process through internal communication, demonstrations or training sessions which will help allay any concerns.
Agile travel policies help you to react in real time to organisational changes, developments in the industry, or global crises, without disrupting the basic principles too much.
The need is not today's price
Buying a plane ticket, a hotel room or a car rental service requires a slightly different approach. Not only do we negotiate a product, but also a service and an experience for business travellers. In some cases, the price aspect may even be considered less important than flexibility or an assistance and support service.
TMCs must constantly innovate but not overlook the human dimension. Digitalisation should focus on employees well-being, sustainability and not solely consider the net result. The difficulty of this lies in finding the right balance.
Technology plays an essential role in setting up an effective travel programme, not only in facilitating the circulation of information, but also in promoting the human dimension and the quality of the services offered.
With the return of this key travel segment, all those involved face new challenges. Travel remains essential for many companies' growth. But the cost-benefit equation of business travel has been realigned and reassessed.
TMCs need to adapt to new realities: the question of the necessity of travel, the need to include new strategies in its travel policy, and the importance of relationships in business travel. Although, we still have to wait for business travel to recover completely, the coming months will offer an opportunity to strengthen relationships and show that it is possible to excel in the sector.