What is a travel management company? A guide for 2024

A travel management company, or TMC, is an organization that offers business travel solutions, from organizing business trips, to managing travel expenses, to enforcing corporate travel policies, to offering visa and passport assistance, to providing travel insurance.

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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.

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Some of the largest corporate 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 companies of all sizes, providing as it does a streamlined, tailored business travel program.

What is a TMC, and what does it offer?

TMC is short for travel management company, and it’s a type of firm that helps other businesses manage their travel expenses and streamline their booking processes. This includes:

• Travel arrangements: TMCs handle the booking of all travel components, including flights, hotels, car rentals, and rail tickets. They also manage travel schedules to ensure efficiency and compliance with company travel policies.
• Cost management: TMCs provide management tools and systems to track travel expenses and ensure that spending aligns with company budgets and policies.
• Travel policies and compliance: TMCs help companies develop and enforce travel policies that employees must follow. They also monitor travel bookings and expenses to ensure compliance with these policies.
• Reporting and analytics: TMCs provide detailed reports on travel spending, savings, and trends, which can help companies make informed decisions about their travel strategies.
• Technology and tools: TMCs offer specialized software that simplifies the booking process and provides options that comply with company policies. These apps help travelers manage their itineraries and receive updates and alerts while on the move.

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By outsourcing travel management services to a TMC, companies can reduce the complexity of managing travel and achieve cost savings through better rates and policy enforcement.

Online travel booking tools vs. travel management companies

Online booking tools describe self-service apps and websites like Expedia and Hotels.com. Travel management companies, by contrast, are more full-service, all-inclusive travel booking operations.

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While online booking tools offer convenience, they lack the comprehensive oversight and strategic guidance that TMCs provide. TMCs offer a tailored and holistic approach to corporate travel, leveraging industry expertise to negotiate favorable rates with suppliers, ensure compliance with company travel policies, and provide 24/7 support.

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While online booking tools may seem more cost-effective upfront, TMCs can uncover hidden savings through strategic planning and negotiation for travel bookings. For that reason, they are a good choice for fledgling companies.

Online travel booking tools vs. travel agencies

As mentioned, online booking tools are apps and websites, like Kayak, that allow you to compare and make travel arrangements yourself. Travel agencies, meanwhile, are traditional brick-and-mortar businesses that do the booking for you.

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As travelers have embraced the convenience of booking flights and accommodations online, traditional brick-and-mortar travel agencies have become less common. 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 benefits of using 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:

1. 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.

2. Streamlined booking and management

TMCs are 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.

3. 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.

4. Risk management

Hiring a corporate 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.

5. Data-driven insights

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.

6. 24/7 support

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—whether in Europe or elsewhere. Immediate support can be crucial in resolving issues, rebooking flights during disruptions, or addressing any travel-related emergencies, like last-minute cancellations.

How Ramp can streamline your travel

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.

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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.