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The pandemic has thrown the futures of many TMCs into question. Business fell by an estimated 80 – 90% during lockdown, compared to 2019 levels, a situation that is not sustainable for the sector.
Many TMCs responded to Covid-19 by cutting costs and laying off or furloughing staff. The situation was much worse for TMCs reliant on transaction fees, who must now find new income streams to survive. Inevitably, client service levels have suffered as a result.
Whilst TMCs have moved into survival mode, travel buyers have used lockdown to re-evaluate their programmes against changing corporate priorities. Sustainability, traveller wellbeing, diversity & inclusion now sit alongside cost savings and duty of care at the top of corporate agendas.
Travellers needs have changed too, with more emphasis on destination information and pre-trip advice around vaccination and visa requirements.
Big decisions for TMCs
At an operational level, TMCs are trying to innovate on service models to achieve a balance between customer needs and TMC costs. At a strategic level, TMCs must decide whether to invest, sell, or stick it out until corporate travel fully recovers.
As TMC business models change, so too will the criteria by which their performance is evaluated by their clients. Purposeful travel is now the order of the day, with each trip coming under greater scrutiny. Virtual meetings are prioritised over internal travel, and successful travel management companies will help manage trips to maximise the ROI for the client. Pre-pandemic, booking processes were becoming more Amazon-like, and that trend will gather pace over the next year or so.
TMCs will be accountable for the content in their systems, for promoting sustainable travel options and for every component of the trip – and allow each client to define the service they receive, and how that service is delivered.
New business models
TMCs may gravitate towards new business models. Fees may be linked to the services provided, or even to a Netflix-style subscription service. Supplier revenues contribute significantly to TMCs bottom line and will have to be re-modelled in the wake of lower volumes.
The TMCs that emerge post-pandemic will be more flexible and tech-savvy, but will need to balance that technology with a strong service ethic. Meanwhile, consolidation will force the remaining TMCs to differentiate themselves, either in their client services or how they deliver them.
Although service, technology and price will remain the criteria by which travel buyers judge TMCs performance, the financial security of the TMC is now a key point of evaluation. Clients want to work with a TMC that not only understands their needs and can fulfil them, but in which they can be confident they will stay in business.
Introducing Take Two
Into this fast-changing market steps TakeTwo, a new TMC committed to providing a premium service to individuals and companies for which travel is mission-critical.
TakeTwo is not affected by any of the issues that have dogged established TMCs. By building a technology suite from scratch, using best-in-class and specially commissioned tools, TakeTwo has none of the costs or constraints of legacy systems.
TakeTwo is the brainchild of two highly respected corporate travel professionals. Chris Thelen and Julie Cope made Chambers Travel the challenger travel brand of the noughties, and the market is just right for them to do it again with TakeTwo.