How to Find & Select Your Next Travel Management Company

The travel industry continues to change becoming increasingly complex due to new and changing distribution channels, the financial health of airlines & other service providers. And while online agencies establish themselves, the traditional agencies offer more technologies and many travelers have found the web doesn’t always offer the best or simplest solution. Others forces impacting travel include alternative technologies i.e. video conferencing, Webex, and the global economic forces whether the price of oil or increasing use of off shore services.

Where do you start and what do you do first?

1. Evaluate your current environment and determine your vision for the program. And ask yourselves the following questions:
   1. Which is more important, service or cost?
   2. What is the geographic scope of your business operations & travel needs, regional, national or international?
   3. Clearly articulate your corporate culture; is it centralized, decentralized, do it yourself or you’re willing to pay for services & focus on your strengths?
   4. What is the history of your travel program and vendor relationship(s)? Does it or should it impact anything we do next?
   5. Inquire of travelers & travel arrangers re their needs and expectations. Are there things they need or can do without?
   6. Evaluate your current arrangements and agency relationships? Is your organization web savvy and heavily book online, or are you highly dependent upon agent services & support? Do you want to move the program in a certain direction functionally?

   If after review, you determine a review and possible change is appropriate, evaluate the users of your “travel program” and consider the different groups that might participate on a selection committee representing a cross section.

   If your company is serious about making a change & upgrading your program, it is essential to have support from a senior level executive.

2. Form your selection committee, again look at the users and who they are: travelers, travel arrangers, A/P, different departments or divisions as appropriate to your company.
   1. Do you need representation from Purchasing? The answer may be dependent upon their participation already, your expertise in vendor selection / evaluations?
   2. Do you need representation from Legal? If your culture or the size of your program requires a formal contract, the earlier they participate, the easier it will be to complete a contract.
   3. Is a 3rd party consultant required? Again, what is the scope and complexity of your program and long-term vision? What expertise do you have, or is available within the company?

3. Define your service requirements; do they vary by user, by department, or functional responsibilities?
   1. Identify your priorities in the trade off of service & cost control/avoidance.
   2. Support services required i.e. communications, management reports, vendor negotiations, savings measurements & benchmarks.
   3. Do you need group & meeting services?
   4. How important is the international expertise of an agency or TMC?
   5. Are VIP services required?

4. Meet with the incumbent agency(s), to determine:
   1. Are they capable of providing the level of support & services you envision?
   2. Are there contractual obligations preventing you from moving forward,
   3. Do they have relationships which allow a “consortia” of agencies be put together to serve you?
   4. Gain their agreement to work with you in a possible transition and dependent upon the past relationship, etc, what consideration if any needs to be provided to them as part of a transition?
   5. What has been the process of vendor selection in the past?

5. Consider that there may not be any reason to change vendors? Perhaps a change to the structure of relationship, roles & responsibilities is all that is needed. Go back to what needs to change or improve, can it be done in current relationship or environment?

6. Gather your data. Depending upon the size of your organization this may require collecting data from vendors, credit card companies, and other suppliers. It may even require a Data Warehouse provider. Specifically look at and quantify:
   1. Total travel volume by airline, hotel & rental car.
   2. Transaction breakdowns by
      1. Net & gross, inclusive or exclusive of refunds, voids, exchanges
      2. Domestic & international, again net or gross
      3. Vendor market shares by dollars & transactions
      4. Average costs by ticket, transaction, room night, rental car day
      5. If the data merits it, extend the above breakdown to your top 10, 25 destinations.
      6. Clearly define the above terms, the travel industry is full of jargon, which may or may not be clearly understood the same way by all.

      Again, depending upon the complexity of your company or program, it may be beneficial to present these metrics by divisions, departments, locations etc.

   3. How many frequent travelers are there within the company?
   4. How many carry corporate credit cards or use their own? (Evaluating a corporate payment plan may be a separate undertaking)
   5. What are the current staffing configurations?
   6. By location, # of agents, # travelers served
   7. Any impact on your IT / Telco needs if travel is to be housed within your space
   8. You may wish to evaluate the # of phone calls, average length of call etc. This element should be taken in light of your goal of automating the process as well.
   9. Breakdown current activity by full service reservations, online via agency site, identify that portion which has bypassed the existing vendor(s) systems or channels.

   By providing the above data, the companies you ultimately invite to bid will have a much better understanding of how they might be able to help you and your value to them as a potential client. Share in confidence how your company is growing, by headcount, new geographic markets or at least be cognizant of this in the process. It may impact your near term and long term service or support needs.

7. Travel Management Company Bidder List. Depending upon your answers to the above questions re the company profile, structure & corporate culture, now is the time to decide if you need a local, regional, national or international TMC.
   1. Prepare a database of companies to invite based on their ability to handle your needs. They might be identified and culled by face-to-face interviews, phone survey or a preliminary request for information.
   2. Preliminary questions to ask might include:
      1. Agency sales volume
      2. Staff size & experience
      3. Technical resources
      4. Mix of business
      5. Typical services provided to a company of your size & complexity
      6. Is their emphasis on service or cost reductions
      7. What is their commitment to technology and how does it fit your own
      8. Will they participate in discussions with travel suppliers
      9. What other value added services do they offer that line up with your near term & long term goals?
      10. Do their preferred vendors match up with your own?

      From these meetings, and other research you will determine the profile of the size and scope of company which best fits your needs.

      Consider the more important service & support are to you, the greater likelihood you may lean to a local company. If your culture is high tech and/or do it yourself, you may prefer an online company. If you are a multinational, then look at the locations & management strength of a potential vendor in key locations.

8. Preparing The Request for Proposal, RFP, from all of the above internal & external discussions, data collection & analysis, prioritization of needs and establishment of goals prepare your RFP. Key considerations;
   1. Clearly establish time frames for bidders’ questions, your responses and decision process.
   2. Rules & process for bidders to follow re contacting staff i.e. all questions must be submitted to X by X date; no one on the committee maybe contacted after X date, if at all.
   3. Specific decision criteria & weighting, if you have a matrix, you might even provide it to the bidder(s) for completion. We recommend you edit it, but it might save you some time.
   4. Clearly state those services, technologies & support etc which maybe required, desirable and other
   5. Depending upon the size & complexity of the bid, a bidders conference maybe helpful. This arena provides one approved forum where all questions are presented and then all bidders receive a copy of all answers.
   6. The above referenced profile details should be included.
   7. Request information re the bidders including;
      1. Staff makeup & experience
      2. Management makeup & experience
      3. Key contacts & availability/accessibility
      4. Technological resources including;
         1. GDS
         2. Front office, mid office QC & back office accounting & reporting tools
         3. Online booking tools
         4. Traveler Profile resources & confidentiality
      5. Financial health
      6. Account mix
      7. Industry & business memberships & consortia
      8. Their recommended savings programs & measurement tools
      9. Their recommended service configurations
      10. Plan to help you reach your stated goals
      11. Operational processes
      12. Traveler services, including VIP if appropriate
      13. Feedback mechanism & tools
      14. Policy controls
      15. Hotel & car reservation services & strengths
      16. Consulting services
      17. Group & meeting services
      18. Form of payment terms
      19. Fee structures i.e. transactional or management fee
      20. Implementation steps, time frames & responsibilities
      21. References

9. Do You Need A Contract, this is a function again of the complexity of your program. Consider the following:
   1. The finances to exchange hands,
   2. Expected service standards,
   3. Consulting services to be provided,
   4. Financial commitments of the parties to implement and sustain the program
   5. Length of commitments requested
   6. Data confidentiality & ownership

10. Account Implementation, these steps should be clearly laid out in the bidders response to the RFP including:
    1. Timeframes & key dates, if the program warrants it, consider a phased implementation with different countries, regions or locations starting at different times. Build a feedback loop to catch any “oops” before it’s too late.
    2. Specific responsibilities of each party for implementation
    3. Scheduled updates for staff within both the client company & TMC
    4. Specifically who is involved from both the vendor & client companies beyond implementation
    5. Provision of introduction meeting agendas & materials in advance
    6. Travel schedule of site visits if appropriate

The above information has been gathered and prepared by Hobson Travel, Ltd. Our resources include Business Travel News, our own experience and previously published information from related periodicals.

Hobson Travel is a full service travel management company in business for over 23 years. We are committed to providing the highest possible levels of service while at the same time have the latest technologies to maximize our ability to serve your company & your travelers. Our three departments include 1) Groups/Meetings & Incentives, 2) Corporate, and 3) Leisure Travel. Call us to learn more about how to select a travel company or how we might best serve your travel needs.