A company or startup can generate incremental revenue by increasing business travel spending. But no business can get a higher ROI without overcoming many business travel challenges. Many companies overcome existing and emerging business travel challenges by partnering with a travel management company.
A travel management company helps employees accomplish predefined business travel goals by business travel experience and mitigating business travel risks. At the same time, it helps employers get higher returns by controlling business travel costs and detecting cost-saving opportunities.
But your organization can get a higher ROI only by working with the right travel management company. Also, you need to evaluate the pros and cons of working with a travel management company (TMC) before outsourcing one of the complex and crucial business processes.
Pros of Working with a Travel Management Company
Policy Implementation and Enforcement
A TMC will make it easier to implement and update travel policies by sharing industry best practices. Also, the travel experts deployed by the company will help you optimize travel and expense policies according to emerging trends and changing conditions.
Hence, you can implement policies that help employees accomplish business travel goals without escalating the average business trip cost. At the same time, the TMC will ensure policy compliance by recommending only in-policy travel products and services to employees.
Customized Business Travel Itinerary
Employees find it challenging to accomplish business travel goals without elaborate business travel planning. They need to gather travel-related information from diverse sources to reach the right place and do the right thing at the right time.
A TMC will help your employees plan business trips and schedule activities by providing a business travel itinerary template. Also, employees can consult travel experts to create custom business travel itineraries according to business travel destinations and goals.
Travel Choices and Booking Options
Your organization cannot encourage and motivate employees to engage in business travel without providing many travel choices. Leading TMCs these days support self-travel booking and managed travel booking. Employees can use the travel booking solutions provided by the TMC to book their preferred travel products by accessing an extensive travel inventory.
Also, they can choose the right travel products by consulting with the tech experts deployed by the TMC. However, the TMC will ensure that your employees comply with organizational policies while booking their choice of flight, hotel, car rentals, and similar business travel solutions.
Duty of Care Solution
Your business must invest in the duty of care resources to protect the physical and mental health of employees during business trips. A TMC makes it easier for your organization to meet the duty of care obligations. It helps work travelers mitigate common business travel risks by delivering real-time information.
At the same time, the real-time support provided by the TMC makes it easier for your employees to handle emergencies and mitigate emerging business travel risks. Some TMCs provide comprehensive duty-of-care solutions by partnering with global health and security service providers.
Consolidated Expense Reporting
The TMC will help your organization centralize travel booking by acting as a single point of contact. The consolidated travel expense reports submitted by the TMC will make it easier for your finance team to track, manage, and audit travel expenses incurred by various employees.
Also, many TMCs have launched travel management software featuring expense management solutions. Your employees can use the software to generate automated expense reports by scanning receipts and invoices. The digital expense reports help your business speed up travel expense reimbursements.
Leading TMCs help clients automate the business travel management process completely by providing unified travel and expense management software. Your employees can use the software to book their choice of travel products and submit automated expense reports.
At the same time, your finance team can use the software to reduce the time required to reimburse travel expenses. Also, they can track travel expenses using a dashboard and analyze expenses by generating custom reports.
TMCs gather employees’ travel and expense data regularly. They share actionable insights with clients by analyzing real-time data using data analytics tools. The actionable insights shared by them help your organization to get real-time visibility into the data.
Your organization can use data-driven insights to get higher ROI by updating business travel policies and curtailing unnecessary expenses. At the same time, you can leverage the insights to make business trips successful by adopting emerging business travel trends.
Cost Cutting Opportunities
You have to pay fees to work with a TMC. But the TMC will help your business control business travel costs in a variety of ways. Firstly, it will enable your employees to book travel products at negotiated rates while using the best deals and offers provided by vendors.
Secondly, it will help your business prevent travel expense fraud by ensuring that employees book in-policy travel products transparently. Thirdly, the data-driven insights shared by the TMC will help you find opportunities to curtail unnecessary expenses and prevent employees from overspending.
Cons of Working with a Travel Management Company
Leading TMCs generate revenue by charging transaction fees on travel bookings. But some TMCs charge interaction fees to clients in addition to transaction fees. Your business needs to pay interaction fees each time an employee contacts the TMC.
The interaction fees will increase when an employee interacts with the TMC several times to secure or modify travel booking. However, you can avoid paying interaction fees by partnering with the right TMC.
TMCs differ from each other in the category of business travel inventory. Leading TMCs allow employees to access extensive domestic and international travel inventories. Also, they enable your employees to book their choice of business travel products and services.
However, some TMCs require your employees to choose from selected suppliers and vendors. Employees lack the option to access an extensive travel inventory and book their choice of travel products.
Varying Discount Rates
TMCs help your company control business travel costs by enabling employees to book travel products at negotiated or discounted rates. But the discounts vary according to the volume and value of transactions.
Your business will find it challenging to access better rates if the value of transactions does not exceed $2 million. Also, the transaction fees charged by the TMC will escalate the discounted prices of business travel products like flights and accommodations.
TMCs help your business control costs by making travel products available at negotiated rates. Some TMCs even help employees control costs using the best deals. Also, they help you control business travel costs by sharing data-driven insights.
But TMCs escalate the average business trip cost by charging hefty fees. You can save money only by comparing various fees charged by individual TMCs. It is always important to partner with a TMC that does not escalate the average business trip cost by charging hefty fees.
The services and tech solutions provided by the travel management company help your business increase the ROI of business travel. In addition to helping employees accomplish business travel goals, the travel management company makes it easier for your organization to control business travel costs.
But you must evaluate the pros and cons of using a travel management company before outsourcing one of the time-intensive and cost-intensive business processes. At the same time, you must partner with a travel management company that meets your organization’s long-term and short-term business travel needs.