The TMC Model Is There A Smarter Way? CBTG Boston – August 4, 2011

The TMC ModelIs There A Smarter Way?

CBTG Boston – August 4, 2011

• Objective & Process Today

• Antitrust Ground Rules

• Relevant Background

• Value Proposition Exercise

Good Morning

• Traveler tracking

• Full content

• Global relationships

• Timely, accurate reporting

• Good self-booking tool

• Mobility platform

• Proficient agents

• Single source customer service

• Analysis & savings ideas

Travel Manager & TMC Feedback

What are the must-have deliverables today to corporate travel programs from TMCs?

• Traveler tracking

• Full content

• Global capabilities

• Accurate reporting

• Multiple GDS capability

• Consulting services

• Personalized service

• After hours reservations center

• Ticket tracking (unused, non-refundables)

TRAVEL MANAGER TMC EXECUTIVE

• GDS

• Customer service

• Booking tool

• Social networking tools

• Industry knowledge

• Central data repository

• Travel policy administration


What are the key benefits of the current TMC model for your organization? What’s really

working well; worth preserving?

• GDS incentives working well

• Professional counselors

• Vendor liaison

• Client advocate

• Crisis management services


• Supporting policy compliance

• Locating travelers in time of crisis

• Supplier negotiations*

• Data management & reporting

• Transparency in spend

• Superior customer service

• One-stop shopping

• Ally with suppliers


Where does the TMC add the greatest value today?

• Policy control

• Risk management

• Negotiated savings

• Capturing data centrally

• Efficient travel operations

• Cost savings ideas

• Experienced people

• Technology


• Offerings however the traveler wants them

• Better global support

• Better data

• Better customer relationships

• More consultant than agent


Where could a TMC add greater or totally new value?

• Mobile systems

• Better global reporting

• Better support of online booking systems

• Address existing flawed pricing model

• Ability to book all products through the GDS


• Financial transparency

• Traveler access to expertise

• Too GDS dependent


What are the key deficiencies of the current TMC model for your organization? What’s really

broken, in your view?

• Securing real-time global data

• Pricing model

• Constant unbundling


• Monthly management fee a better model

• Yes, easy to allocate costs

• Annual management fee would be better


Does the TMC transaction fee, as a central component of the current model, remain useful?

Is there a smarter approach to TMC compensation?

• Transaction fee works if there is transparency in costs to provide services

• Cost plus model better

• Transaction fee does not capture efforts where no transaction takes place


• Consult on mobile

• Consolidate traveler servicing to one expert group

• Figure out how to collect a higher percentage of hotel commissions

• More consultative assistance with supplier contracting

• Help with meetings management


Are there TMC revenue opportunities worth exploring that could help sustain the model and

benefit both TMCs and corporate clients?

• Diversify portfolio to include peripheral solutions to include solutions for global traveler

• Manage more information and products

• Sell airline ancillary services

• Lower transaction fees and unbundle work products


• Secure all content

• Work as data management company rather than as a travel fulfillment vehicle

• Reduce GDS dependence


What overall changes would you recommend to the current TMC model, if any at all?

• Focus on mobile

• Expand services

• Greater TMC / client collaboration Vis harmful supplier policies

• Work toward multi-sourcing systems


• Would reconsider old fashioned rent-a-plate or CTD

• Direct connections with vendors


Are there whole new models worth exploring that you have considered?

• Multi-sourcing environment

• Yes, but the marketplace is not ready for them


• Greater flexibility and speed to make program changes

• Clients need to help TMCs develop new products and services


Are there other thoughts and ideas that you would like to add?

• Corporate procurement has caused a shift in focus to the 2% transaction cost away from the 98% total cost


What Could A New Model Look Like?

The TMC Model

• Full content• Traveler tracking• Booking tool• Data & reporting• Analysis & cost-savings ideas• Mobile platform• Global capabilities

Must Deliver

• Travel / procurement manager performance measurement

• Cost allocation to business units

• Compelling business case

control of programcost savingsnew valuequantifying program successrisk mitigation

Barriers To Change

• Status quo transaction fee model; improve value proposition communications

Financial Options

Benefits

Drawbacks

Variations


• Cost plus

Financial Options

Benefits

Drawbacks

Variations


• Cost plus

• Management fee

Financial Options

Benefits

Drawbacks

Variations


• Cost plus

• Management fee

• Lower transaction fee; unbundle services

Financial Options

Benefits

Drawbacks

Variations


• Cost plus

• Management fee


• Zero transaction fee for online

Financial Options

Benefits

Drawbacks

Variations


• Cost plus

• Management fee



• Other?

Financial Options

Benefits

Drawbacks

Variations


• Cost plus

• Management fee



• Other?

Financial Options

Benefits

Drawbacks

Variations

• Flesh out models

• BTC analysis to the industry

• Broad travel manager survey

• Regroup with you

• Expand BTC Kitchen Cabinet

Immediate Next Steps

Thank You!

Documents

The TMC Model Is There A Smarter Way? CBTG Boston – August 4, 2011