What is a travel management company (TMC), and why do you need one?

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‍If your team frequently travels for business, you know the amount of time and effort that goes into booking trips, managing travel expenses, and chasing down receipts.

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A travel management company, known by the abbreviation TMC, can help relieve those headaches. TMCs free up your team from booking their own travel and help reduce business travel expenses by negotiating with suppliers and using their industry connections to get deals.

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Outsourcing travel management services to a TMC can be a game-changer for companies of all sizes. In this article, we explore how TMCs reduce the complexity of managing business travel and help save you money by providing a streamlined business travel program.

What is a TMC? 

What does TMC stand for? TMC, not to be confused with The Movie Channel or Toyota Motor Corporation, is short for travel management company. It’s an organization that helps other businesses manage their travel expenses and streamline their booking processes. Some of the largest corporate travel management companies include American Express Global Business Travel (Amex GBT), CWT, Egencia, and BCD Travel.

What services does a TMC offer?

TMCs are service providers for a number managed travel functionality, including:

• Booking 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 and expense policies that employees must follow. They also monitor travel bookings and expenses to ensure compliance.
• Reporting and analytics: Many TMCs provide detailed reports on travel spending, savings, and trends, which can help companies with budgeting and strategic financial planning
• Technology and tools: Some TMCs offer travel management solutions that simplify the booking process and enforce company policies. This software helps travelers manage their itineraries and receive updates and alerts while on the move.

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TMCs get their primary revenue from fees, either as a percentage of the total travel cost or as a fixed management fee. This fee-based model incentivizes TMCs to find cost-effective options while providing high-quality service.

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Online travel booking tools (OBTs) vs. travel management companies

Online booking tools (OBTs) are self-service apps and websites like Expedia and Hotels.com. In contrast, travel management companies are full-service, all-inclusive travel booking operations.

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While online booking tools offer convenience, they lack the oversight and guidance that TMCs provide. TMCs offer a tailored approach to corporate travel and serve as a connector, using their industry expertise to negotiate favorable rates with suppliers, ensure compliance with company expense policies, and provide 24/7 support.

Why you should use travel management companies

TMCs offer practical solutions that can help improve your company's travel experience and financial outcomes. Here are some of the benefits you can expect from partnering with a travel management company:

1.  Reduced costs and concierge service

TMCs employ experts who know the travel industry inside and out. They have a nuanced understanding of market trends, airline routes, how to negotiate with hotels, and other skills that can help businesses secure better prices.

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By leveraging their industry connections and expertise, TMCs often negotiate reduced rates and perks that aren't readily available to individuals or small businesses. These cost-saving strategies can improve your ROI from corporate travel.

2. Streamlined travel booking and management

TMCs are a one-stop shop for all travel solutions. They offer user-friendly online platforms and mobile apps that simplify the booking process for employees. TMCs also integrate with business expense trackers, making it easy for companies to analyze and report on their travel expenses. This centralization reduces the administrative burden on your team and helps guarantee compliance with your company’s travel policies.

3. Emergency assistance

In the event of unforeseen circumstances, such as a sudden natural disaster, TMCs will provide emergency assistance. They can help locate employees and make sure they’re safe. This responsibility for protection provides reassurance for both travelers and businesses, reducing potential risks and liabilities that could occur from unexpected events.

4. Safety assistance

Hiring a corporate travel management provider is a smart move for risk management. Imagine you’re sending employees to an unfamiliar overseas destination. Your representatives at the TMC have all your traveler information and can provide 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, which gives your business insight into your travel spending patterns. By identifying trends and opportunities for improvement, companies can proactively refine their travel policies and strategies. TMCs also provide detailed reporting that helps businesses make informed decisions, whether it's renegotiating contracts with preferred vendors, adjusting travel policies, or exploring alternative travel options.

6. 24/7 support

Many TMCs offer 24/7 customer support, which means employees have assistance whenever they need it. This level of service is especially valuable for businesses with international travel needs or employees in different time zones. Immediate support can be crucial for resolving issues, rebooking flights due to disruptions, or addressing any travel-related emergencies like last-minute cancellations.

7. Integration and compliance with your travel policy

A TMC integrates your travel policy into its searches, so employees are guaranteed to stay within the bounds. And a TMC will flag if for some reason a non-compliant travel itinerary is created. It saves time both for you and your team making the travel plans.

How Ramp can streamline your corporate travel

Ramp Travel is specifically designed to improve your business travel management. From predefined spending policies that prevent unauthorized expenses to freeing up employees from time-consuming expense reports, Ramp simplifies business travel with the power of automation.

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Here’s how Ramp can help streamline your corporate travel process:

• Prevent overspending: Employees get corporate cards with predefined expense policies to keep travel costs within budget and catch out-of-policy spend before trips start
• Effortless expense submission: Business travelers can easily submit expenses on the go. Ramp automatically collects and matches receipts, saving time and reducing errors.
• ‍Integration with accounting platforms: Ramp integrates with accounting tools, speeding up your monthly close. By accurately coding, categorizing, and mapping transactions, Ramp offers seamless syncing, freeing up hours of manual work and keeping your T&E on track.