The travel bug

For many smaller businesses, the idea of using a travel agent is a luxury. Catherine Chetwynd asks why

Air, hotel and rail travel can all be booked on the internet and usually at advantageous prices, so why would they pay someone to do the same job? At first sight that might make sense, but since 9/11 keeping track of people has become a duty of care. And anyway, people can get engrossed in trying to find the best fare or rate, taking up time they might better spend doing their job.

The large travel management companies (TMCs) – Carlson Wagonlit (CWT), Hogg Robinson Group (HRG), BCD Travel and American Express – all provide some level of dedicated service for small and medium-sized enterprises (SMEs). ‘SMEs’ loyalty is based on service and the ability to get the best deal at point of sale, but the service has to be at the highest level. It is personal contact that holds them,’ says Peter Kite, the managing director of HRG UK. And according to the general manager and head of sales for BCD Travel, Chris Crowley: ‘There is no commitment from the customer.’

The major TMCs do not allocate a manager to SME accounts. Services are largely menu-based and offer varying degrees of management information (MI) to help customers cut their travel spend. Fees are charged by transaction, and the more complicated the request, the higher the fee.

‘Companies like Ian Allen Travel and Reed & Mackay are service companies first and they do appear to care at director level,’ says a consultant, Colin Brain, director of Management Solutions UK. ‘Directors of smaller companies are happy to maintain that closeness with their clients; their customers are part of them. In the big TMCs, you would not get senior directors involved in smaller accounts. It makes sense for companies to match their TMC with their own size.’

But Bernard Harrop, managing director of Imagine Group Management – advisers for responsible travel – points out: ‘They do try to provide services for SMEs but their speciality is large global organisations and they are geared up to that, and they are not able to give the flexibility nor the levels of service smaller companies want.’

BCD Travel’s Direct service for SMEs offers a basic account management service with MI. ‘They can make bookings online through BCD Business in the same way as they would on Expedia, for example,’ says Crowley. ‘They can also build in nine or 10 policy controls, including preferred carriers.’

Local service is often a requirement for smaller companies. Crowley says there is a strong SME presence in the north of England, and so BCD has offices in Hull, Manchester and Leeds, which respond to that need.

Less flexible is HRG’s service, which is run from a call centre and offers no travel management. Customers can ask for an individual they like but that does not guarantee the person will be available. ‘Smaller clients book through us for complex travel, they want advice at point of sale, but they are likely to buy a point-to-point fare on an airline website,’ says Kite.

He says the chaos last summer at London Heathrow, caused by terrorist threats, highlighted how important personal service is. ‘We took a lot of calls from people who had booked tickets on the internet and did not know where to go. If you establish what value you bring, people will pay for that,’ says Kite.

Local

CWT assesses the need for personal relationships. ‘When we are introduced to clients, we find out where they want services and whether they want someone with local knowledge,’ says Alison Smith, the director of sales. ‘We always implement the human element first and allocate a team local to the client with named counsellors, even if we know they will only book online.

‘We have done a lot of research in the EMEA [Europe, the Middle East and Africa] region to service SMEs and, as a result, we invested in technology,’ she says. ‘CWT Connect Express is an online service and also gives a lot of information, including management information, in around 50 standard reports.’ These cover the suppliers used, the amount spent, how it was spent, whether travel was booked online or by phone, and more.

Services from Amex fall into two areas. Corporate Savings Plus allows cardholders to take advantage of rebates and/or point-of-sale discounts with selected partners, ranging from airlines to business services. In addition, each account has a named business manager who is available for consultation. Otherwise, day-to-day business is carried out through a call centre or online technology integrated with that.

However, call centre response does not always meet the desire for personal service. ‘I have an SME client in Bath who had a good relationship with a local TMC; when his contact transferred to a call centre, service levels dropped, it was impersonal,’ says Hugh Edwards of Hedway Travel Consultancy. ‘A smaller TMC will jump higher than a multiple and SMEs want someone local. The relationship is important.’ The business went out to competitive tender recently.

The International Tanker Owners Pollution Federation (ITOPF), an oil spill response organisation, had been using Reed & Mackay’s services until the latter underwent a merger four years ago. ‘We need our staff to be well looked after and we thought the service was not as good as it had been before the merger,’ says Amanda Howarth, the finance administration manager for ITOPF.

‘We had presentations from three TMCs and we decided to go with another small agency, running them alongside Reed & Mackay for three months,’ she says. ‘Their presentation was superb but they did not understand the business and the service couldn’t adapt quickly enough for our needs: much of our business is last minute.’

Pricing was also an issue and, when Howarth looked at the market two years ago, she felt Reed & Mackay’s charges for train, car and ferry were ‘a little higher than [we wanted to pay]’. As a result, the Federation now books its own land transportation online. However, the account is still with Reed & Mackay and ITOPF has three dedicated agency people on the account.

Howarth is now satisfied. ‘Service has improved no end and consultant Stuart Birkin is superb, he really looks after us and calls regularly to discuss possible savings and reports,’ she says.

Incentives

Reed & Mackay provides the same levels of MI to all clients. ‘Some slice and dice it online, others want route reports,’ says the sales director, Tracy Baumfield. ‘We have negotiated deals that SMEs can use, and our management fees are dependent on how successfully we keep fares low. All our staff have to offer a minimum number of fares and we give staff incentives on savings we make for customers, not on turnover.’

Portman Travel sees itself as a halfway house between the big travel agencies and those offering smaller services. ‘We are the largest independent TMC, with the most branches in the UK,’ says Bob Govan, director of marketing and development. ‘We want to be seen as the logical alternative to the mega model, with strengths such as significant purchasing power, while retaining fleetness of foot and responsiveness.

‘We provide high-touch, high-cost service, but also low-cost service from consultants with high levels of expertise,’ he says. ‘Typically, SMEs don’t need a great deal of account management. They do not have the expenditure to justify a deal with an individual supplier and they don’t need MI. That group is more price-sensitive.’

Portman’s website offers a click-and-buy service for smaller companies and basic MI, providing details of expenditure and opportunities to make greater savings.

It is important to do your research and find out who offers what and whether you like how they do it. Even companies with a small travel budget can still benefit from using a TMC. ‘It is not about haggling over fees,’ says Govan. ‘It is about whether a TMC’s expertise can deliver savings that dwarf the fees.’

Catherine Chetwynd is a freelance journalist specialising in business travel, conference, incentive and exhibition writing. She also writes for The Times and the Financial Times.