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Not All "Corporate" Travel Agencies are Alike

Corporate Travel Services Models:  rTMC vs Retail
 
Similarities:
 
·         Discount corporate rates (esp. hotels, car rentals)
·         24-hour emergency line and world-wide toll-free access to agency
·         Similar booking processes (eg. deal by phone, email, or online)
 
Differences:
 
·         Revenue model: A rTMC (“real Travel Management Company”) charges a transparent fee that permits its consultants to provide unbiased services. The fee enables consultants to ignore any supplier incentives and focus on the best interests of their clients. Any back-end deals are used only to subsidize service levels. 
 
·         With a rTMC, tickets and ticket exchanges are NEVER marked up. Ticket exchanges handled poorly or unethically are extremely costly to the client. A rTMC uses highly-trained specialists to handle all but simple exchanges to ensure the reservation has been changed at the lowest possible cost. Ticket exchanges are the single most difficult transaction for a consumer to audit, and a place where trust is most important. The Retail model of travel agency normally adds additional mark-ups to ticket exchanges.
 
·         rTMC consultants are paid a salary and are explicitly mandated to provide unbiased services. They are not rewarded to sell preferred suppliers. Retailers hire and train for sales skills; rTMCs hire for technical ability and customer service skills.
 
·         Strategic services: rTMCs help align each client with suppliers that are most suitable to that company: eg. they negotiate rates at hotels (Sutton Place) or airlines (AC, WS) that match the client’s needs. We create deals for your company, not ours! Retailers tend to use special “net” arrangements with airlines and hotels that are beneficial to them, but problematic for their clients (ie. non-refundable rate, inflexible reservations, undesirable airlines/hotels sold solely for the retailers benefit.
 
·         Duty to Care: rTMCs take this very seriously. Our consultants ensure your travellers avoid risky connections, unsuitable hotels, and problematic airlines (eg. DL on the YVRLAX route). Our focus is on comfort, safety, and perks (eg. loyalty programs) to help avoid burn-out.
 
·         Administration services: typically with start-ups and expanding companies, growth outpaces administration. We help you cope with our top-notch admin services – chasing down hotel bills, reconciling expenses to trips, customized & coded corporate reports. We do this quickly and reliably. We customize reports on demand.
 
·         Research, hotel prepayment services, & meeting-planning assistance (free.)
 
·         rTMCs help you build & enforce travel policy: eg. executives might be permitted to choose AC “flex” fares or fly a particular preferred airline as long as pricing stays within certain parameters. We help you set policy as to who can and cannot make certain kinds of decisions.  Corporate policy, for example, should answer this question: what do you do when traveler wants to combine a holiday with a trip? 
 
 
How to Detect a “Retail” Model:
 
1. Credit card is often billed to the travel agency’s merchant account rather than airline. (One sign that some tickets are being “marked-up!”
 
2. Ticket reissue fee waived: ticket reissues are tricky and often require a highly-skilled consultant to be done correctly and at minimum cost. If this fee is waived, it is a sign of hidden markups. Ticket exchanges are very difficult to audit; an unethical travel service will exploit this.
 
3. You are never shown the official IATA electronic ticket receipt. If your ticket (or ticket exchange) has been manipulated, a retail agency will hide the electronic ticket receipt. In many cases, the ticket financials can be viewed at the airline website, and it is a good policy to do random checks if you are concerned about your service provider. (Some airlines, however, offer retailers the ability to “cloak” the financials, so you have no easy way to audit.)
 
4. Airline refers you back to the agency for all information about a booking. “Retail” agencies that regularly mark-up tickets have an arrangement with most airlines to refuse to discuss the ticket with the passenger.
 
5. Tickets start to become increasingly expensive. Retailers typically mimic a real TMC for several months. As they become more confident that the account is no longer auditing or checking prices closely, the mark-ups are gradually introduced.
 
6. When an airfare is challenged, a retailer offers suspiciously glib justifications.
 
7. The agency uses full-time salespeople. Except for the very large ones, rTMCs do not require salespeople, which can be an expensive addition to over-head. rTMCs enjoy long-term customer loyalty. Retailers must rely on a large sales force to replenish lost business.
 
 
Conclusion:
 
Ultimately, when you consider a Travel Management Company vs a Retailer it comes down to trust vs “buyer beware.” Whether yours is a fast-growing company trying to keep pace with a steady influx of new employees and travellers or a mature company trying to manage costs and ensure consistency and reliability, the single most important issue to take into account is do you have a long-term relationship of trust with your travel services provider?

 

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