It’s the $64 million question – is there such a thing as a truly global TMC? First off, what do we mean by global? If the definition is one vendor for multiple countries delivering the same in each of those countries, then the clear answer is No.
No TMC can standardize completely, but to be fair, some TMCs get close. “Those closest to being truly global are the more mature TMCs. They’ve had the time, but there are also newer entrants working off newer technology and less GDS-centric who are getting there too,” reckons Will Tate, a partner at Goldspring Consulting.
Historically, key to being a global provider was ownership structure. Not all TMCs own in all markets; the best they can achieve is ownership in their largest or top markets, say, the US, Canada, Northern Europe and the UK. It is often not commercially viable to own in smaller markets. “Not even American Express GBT owns in every single country,” says James Stevenson, CEO of Globalstar Travel Management.
Nonetheless, 100 percent ownership is a challenge. BCD for example has ownership in markets which represent 80-90 percent of its customers’ major markets. “We’ve been building it [our ownership structure] for years as far as sole ownership goes,” says Teri Miller, executive VP of global client team. “It’s been a 20-year build and there were some markets which were difficult to acquire, for example China.” And in some markets, it doesn’t make sense to own because the markets are too small, Miller says, so the decision is based on need of the client.
“It’s not an easy journey,” Miller admits, adding, “Some of our partners are so strong we don’t need to own and they are 100 percent of the BCD family.”
And there’s the rub: Is global really necessary? Hybrid arrangements work really well and multinational clients are opting for a best-in-class regional providers versus a single global provider to overcome failures inherent when enforcing compliance in a particular region using the lowest common global denominator. “As long as key program competencies are globally consistent, this has proven to create better outcomes for the customer over and over again-—better user experience, better savings, better service,” says Jamie Pherous, managing director of CTM.
“For example, there’s little point enforcing a single online booking platform across multiple markets if it doesn’t allow for regional customization of travel content and deals or process management that suits one market or culture but not another.”
Pherous maintains that to deliver a global travel program effectively in today’s travel environment requires “a combination of global reach and program centralization complemented by regional customization, local service delivery, regional program management and accountability and customizable technology that’s designed to meet the needs and opportunities of the local market.”
Chloe Carver, head of corporate travel at Acquis Consulting Group, agrees that in some instances a hybrid approach that combines the best-in-class regional solutions with global oversight works well. “Ultimately, the choice between a fully global or hybrid solutions depends on the company’s specific requirements, travel patterns, and strategic goals,” Carver says.
“The capabilities of your TMC are a bigger factor than its scale,” argues Isabel Torres, managing director of Reed & Mackay North America. “Global ownership and infrastructure are appealing, but the ability to provide consistent service and tailored solutions across multiple regions is crucial,” Torres says.
“One-size-fits-all is not the best approach for a global program. A larger TMC may lose sight of the differences across countries within a single, consolidated travel program, where a mid-market TMC with local presence across the globe can provide custom solutions to match their needs within each market.” Torres explains that Reed & MacKay adopts a flexible approach that combines global consistency with local adaptability.
The USP in the DNA
There are clearly many variables which influence best practice, including annual spend of around a minimum of $10 million. Other factors center on travel data, grasping the company’s culture, understanding its mission and values, and identifying its operations and global footprint. “When it comes to finding the right TMC partner, there are no hard and fast rules that apply in every scenario,” says Carver.
She stresses however that client demand is for a truly global program that enables streamlined reporting, standardized processes and efficiency across regions despite the challenges. “Achieving a ‘one size fits all’ solution is challenging due to the diverse needs and systems in various regions, but global TMCs should be able to handle these complexities, integrate disparate systems, and adapt to local nuances while maintaining a consistent overarching strategy. They should also have the capacity to collaborate with local teams to address these localized requirements as needed.”
Other fundamentals which a global client is looking for run deep in the TMC’s DNA, says Gabe Rizzi, president of Altour. “To be truly global you need consistency in culture, technology and reporting, which is very difficult and very few TMCs do that well across those three dimensions.”
One cannot overlook the importance of culture, leading some TMCs to argue that having local partners helps tick that box in one fell swoop, building a stronger case for a network TMC and hybrid arrangements.
Intimate market knowledge is one of the USPs of Globalstar, Stevenson says; for example, having a network of 56 independent TMCs in roughly the same number of countries. They range in size but all are market-leading. “We understand what the local requirements are and every client in every market will be important,” Stevenson says. As a partner network, Globalstar exemplifies a different way TMCs can meet the global requirement of clients.
Lora Ellis, head of consulting at Festive Road, believes there are three ownership routes to becoming a global TMC:
• “Mega TMCs which are wholly owned in a large number of markets and leverage joint ventures or partners in a small percentage of markets.
• Multinational and network TMCs which achieve a broader geographical reach through more joint ventures or networks.
• Platform TMCs can also meet this requirement for highly digital programs, leveraging service hubs in multiple regions.”
Larger TMCs utilize regional hubs to achieve consistency in service levels for global clients, “as it’s much easier to manage three or four regional servicing hubs with tech, reporting and culture than 80 individual partners around the globe,” explains RIzzi.
Partner network Altour has 43 offices and over 690 travel professionals worldwide, claiming to be one of the largest TMCs in the US and globally. “While we’re not a mega TMC, we do service clients on a global scale,” Rizzi points out. “The technology and GDS choices are driven by the markets they operate in. We pull the reporting and duty of care insight together for our clients on a global scale.”
Make a List, Check It Twice
Choosing the right TMC partner comes down to where your major markets are. Goldspring’s Tate advises travel managers to create a heat map by market, and has created a Global Capability Template of 250 lines representing high-value items on a company’s agenda. The Top Ten are:
• Global profile management
• Trip disruption services
• Reporting
• Data
• Account management
• Mobile capability
• Ticket management
• Travel messaging
• Duty of care
• Pre-trip approval.
If one TMC can tick these for your major markets without a workaround for GDS and disparate back-office systems, Tate says, then travel managers should reap the benefits.
However, he warns that “it falls apart in the secondary markets.” Notwithstanding that fallout, he says that the bulk of Goldspring clients are striving for a single solution and “many times they will settle.” Ticking most of the right boxes is good enough, because ultimately, one size does not fit every region and country in the world.
Globalstar’s Stevenson is strongly bullish on the issue, believing that, “If you have the right partner, I don’t think it’s impossible to achieve,” with clients reaping the benefits of delivering global benefits at a local level and happy bookers and travelers. The benefits he cites for travel managers is having one global contract which gives accountability, duty of care, consistent service, access to technology and unform tech portal and access to local market experts.
Interestingly, cost appears to play a small part in driving a global strategy although Lindsay Straub, global head of sales at FCM, says this is a benefit alongside centralized support systems, customized travel programs and increased duty of care: “Global reach can lead to more cost savings and revenue optimization as we have the opportunity to leverage our supplier relationships in different markets across the globe to strategically provide our clients with the most competitive rates for flights, hotels, and other travel services.”
Of course, no travel manager would ignore cost savings. Additionally, BCD’s Miller says managing policy is another benefit, while Ellis cites standardization of service offering, technology and/or data as other key drivers, and Tate points to the streamlining that comes from managing only one supplier, only one technology provider and consolidating spend to achieve higher leverage.
Clearly, it’s horses for courses, and entirely dependent on what the travel manager expects from a TMC to tick the majority of the right boxes to satisfy their company culture, geographic spread, cost and technology.
“What’s also critical is to consider the traveler experience and how will they be impacted by a fragmented global servicing configuration,” Rizzi says. “Being able to pass a ‘super PNR’ in a follow-the-sun format through these servicing hubs removes a lot of the potential servicing risk by keeping the traveler data in a consistent format for reporting, duty of care and service levels.”
Program size isn’t a determining factor says Festive Road’s Ellis, but how the program is governed and managed and where decisions are made about the program certainly are critical. “If decisions are made regionally or locally, it can be a challenge to implement a single global TMC. There are ways around this. However, it typically requires much more change management activity with the multiple decision makers up front before embarking on ‘globalizing’ the program.”
M&A and More
The TMC world is changing fast, punctuated by mergers and acquisitions and interest from venture capitalists. This is driving consolidation in the marketplace and new entrants in equal measure.
The most talked-about is Amex GBT and CWT. Behind the drive for growth is satisfying the changing marketplace, explains GBT’s CEO Paul Abbott. “The supply and customer needs are changing and technology is the driving force,” he says. “Customers want global content, the best software and the best services all integrated.”
Market disruptors include the likes of Navan and Spotnana offering multinationals a different kind of TMC. As Rich Liu, CEO of Navan Travel, explains, “Modern companies are looking for end-to-solutions that provide consistently amazing user experiences on a global scale, not necessarily who has the most geographic locations. Today, being global means TMC plus technology plus inventory plus expense – a true end-to-end experience.”
Navan is positioning itself as a scalable solution to support customers’ global needs by prioritizing global POS, localized tech and inventory, along with local, follow-the-sun agent support. “That said, there is always room to deepen offerings and expand local inventory in locations where a TMC may need more coverage,” says Liu. “For example, Navan will partner with regional OTAs to provide travelers with localized inventory.”
It’s a new world of opportunity for travel managers able to break with the tradition that every multinational client should automatically gravitate towards TMCs with the same global ownership and infrastructure. “It’s worth considering that the traditional view of size equating to maturity or capability might not fully capture the current reality of the business travel industry,” Liu notes. He reckons that a travel manager’s shopping list should be best in technology, a comprehensive end-to-end platform, a superior user experience and advanced support capabilities.
“Most modern travel managers understand that the best solutions are modern and dynamic, with the ability to flex and customize a program that best fits their global needs,” Liu says.
Former co-founder of Concur Steve Singh’s purchase of Direct Travel with a group of investors this spring is another disruptor, integrating Spotnana’s technology stack, Center’s expense management solution and Troops meetings and group travel planning platform. Singh’s vision is for a unique tech-driven TMC exploiting AI on a single platform with centralized data, online booking services, expense management and meetings, and group travel planning capabilities.
A future-focused global TMC solution is out there for multinational clients; one that doesn’t rely on size but fit for the customer‘s needs by providing tailored solutions and value via some local ownership and delivery. CTM’s Pherous sees this hybrid arrangement as the future, ensuring that “travel programs provide consistency where relevant, and value everywhere – to all stakeholders at all levels of the business, in every market.”
