What is a travel management company?
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A travel management company (TMC) is an organization that offers business travel services, such as organizing business trips, managing travel expenses, enforcing corporate travel policies, offering visa and passport assistance, and providing travel insurance.
TMCs help to reduce time and expenses on travel arrangements, negotiating with suppliers and using their industry connections to get favorable deals. Their primary revenue comes from fees, either as a percentage of the total travel cost or as a fixed management fee. This fee-based model is designed to incentivize TMCs to find cost-effective options while providing high-quality service.
Some of the largest travel management companies in the industry include American Express Global Business Travel, CWT (formerly Carlson Wagonlit Travel), Egencia, and BCD Travel. Partnering with travel management providers can be a game-changer for businesses of all sizes, offering tailored solutions for your company's travel program.
Online booking tools vs. travel management companies
In business travel management, the choice between online booking tools and travel management companies (TMCs) can significantly impact the efficiency and cost-effectiveness of their corporate travel programs. Online booking tools offer convenience, allowing employees to make their own travel arrangements swiftly. However, they lack the comprehensive oversight and strategic guidance that TMCs provide.
Travel management companies offer a tailored and holistic approach to corporate travel. They leverage their industry expertise to negotiate favorable rates with suppliers, ensure compliance with company travel policies, and provide 24/7 support for travelers.
While online booking tools may seem more cost-effective upfront, TMCs can uncover hidden savings through strategic planning and negotiation for travel bookings.
Online booking tools vs. travel agencies
The rise of online booking tools for travel stems from the late 20th-century digital revolution, but it has also brought about its share of challenges for the travel industry.
As travelers began to embrace the convenience of booking flights and accommodations online, traditional brick-and-mortar travel agencies faced increasing competition and had to adapt to survive. Many struggled to stay relevant and had to pivot towards offering specialized services and personalized experiences to keep their clientele. This shift also intensified competition among airlines, hotels, and online travel agencies (OTAs), often resulting in cutthroat pricing battles that left travelers navigating through a maze of options, making it challenging to find the best value for their money.
However, amid this digital disruption, the role of travel agencies has become increasingly crucial. That’s because travel consultants offer a lifeline to businesses seeking to navigate the complex and often overwhelming landscape of online travel options. They provide a human touch, expertise, and personalized guidance that’s often absent in the realm of online booking tools.
6 reasons businesses use travel management companies
TMCs offer practical solutions that can significantly impact your company's travel experience and financial outcomes. Let's explore how these industry experts can streamline your travel management:
Expertise and cost savings
TMCs employ travel experts who are well-versed in the intricacies of the travel industry. They have a keen understanding of market trends, airline routes, hotel negotiations, and other nuances that can help businesses secure better deals. By leveraging their industry connections and expertise, TMCs often negotiate reduced rates and perks that aren't readily available to individual travelers or small businesses. These cost-saving strategies can significantly reduce your money spent on travel.
Streamlined booking and management
TMCs provide a one-stop shop for all travel services. They offer user-friendly online platforms and mobile apps that simplify the booking process for employees. TMCs also integrate with expense tracking and reporting tools, making it easy for businesses to manage travel expenses. This centralization reduces the administrative burden on employees and helps guarantee compliance with your company’s travel policies.
Duty of care
In the unfortunate event of unforeseen circumstances, such as a sudden natural disaster or political unrest erupting in a foreign destination, TMCs will provide emergency assistance. They can help locate employees and make sure they’re escorted to safety. This approach to responsibility for protection provides a reassuring safeguard for both travelers and your business, reducing potential risks and liabilities that could occur from unexpected events.
Hiring a business travel management company is a wise decision for risk prevention, providing a strong approach in an unpredictable world. Consider, for instance, a company sending its employees to an unfamiliar overseas destination. These experts act as the compass, providing real-time guidance on potential travel risks, local conditions, and safety protocols. They make sure that the journey isn't only efficient but also secure.
TMCs collect and analyze a wealth of travel data. This data-driven approach gives your business insight into your travel spending patterns. By identifying trends and opportunities for optimization, companies can continually refine their travel policies and strategies. TMCs also provide detailed reporting that helps businesses make informed decisions, whether it's renegotiating contracts with suppliers, adjusting travel policies, or exploring alternative travel options.
Many TMCs offer 24/7 customer support, making sure that employees have assistance whenever they need it. This level of service is particularly valuable for businesses with international travel needs or employees in different time zones. Immediate support can be crucial in resolving issues, rebooking flights during disruptions, or addressing any travel-related emergencies, like last-minute cancellations.
In summary, businesses use TMCs to tap into their expertise, streamline travel management, prioritize employee safety, glean data-driven insights, and access 24/7 support. These benefits not only enhance the overall travel experience for employees but also contribute to cost control and better decision-making, making TMCs a valuable partner in corporate travel management.
Business trip expense management
When it comes to travel expense management, Ramp is a strategic partner that can help your business navigate with confidence. From establishing pre-defined spending policies that prevent unauthorized expenses to liberating employees from time-consuming expense reports, Ramp simplifies travel with the power of automation.
Here are some of the ways Ramp can streamline your business travel:
- Prevent overspending: With Ramp, employees receive cards set with pre-defined spending policies, making sure that travel expenses stay within budget and unauthorized expenses don’t go through.
- Effortless expense submission: Business travelers can easily submit expenses on the go, whether it's a cab ride or a car rental with services like Lyft. Ramp streamlines this process by automatically collecting and matching receipts, saving time and reducing errors.
- Integration with accounting platforms: Ramp seamlessly integrates with accounting tools, speeding up your monthly close. By accurately coding, categorizing, and mapping thousands of transactions, Ramp offers direct integrations for seamless syncing with your accounting platform, freeing up hours of manual work.
Get started with Ramp for free.