The Middle East crisis earlier this year left many small- to medium-sized businesses caught out by fast moving events that disrupted flights and cancelled meetings. It was a stark reminder, once again, of the value of managed travel

“When an SME boss is stuck in a Gulf country and they need to be repatriated in a time of absolute need, and they’ve not got that support, it highlights the risks and the need for better duty of care,” says Steve Taylor, Business Development Manager for Clarity Business Travel. 

Yet, only a fraction of SMEs have a cohesive approach to business travel. Earlier this year, an American Express Global Business Travel survey of 500 UK and US SMEs found that only 35% currently manage their travel through a centralised system.

Most SMEs don’t regard travel as a strategic function when they are busy trying to turn a profit in turbulent times.

But if they don’t, warns Clive Wratten, CEO of the Business Travel Association, travel becomes an administrative burden that eats into valuable time and leaves travel spend scattered across the business.

“SMEs are the true powerhouse of our economy. To scale, export, and win new business globally, they cannot afford to waste time managing flight disruptions or expenses,” he argues.

Price sensitive

Once consolidated and accounted for, it can be surprising how much is spent on business travel across an SME over the course of the year. 

Unmanaged travel makes it challenging to understand what’s being purchased and whether better rates can be negotiated.

But even when it’s managed, SMEs have limited purchasing power compared to large corporates. “This makes them more vulnerable to supplier price increases and less able to negotiate favourable rates,” says Wayne Lappage, a senior buyer and ITM Board Director.

Kerry Douglas, Head of Programme at ITM, agrees. “An issue raised by travel managers across smaller programmes is being able to get time with certain suppliers and achieve competitive agreements due to lower travel spend and volumes,” she says.

Using a travel management company (TMC) with bulk purchasing power can help with supplier negotiations.

“SMEs now look to gain savings based on an assumption that a TMC has access to better fares and terms than they couldn’t achieve by going direct to an airline’s website. This remains a ‘baseline’ assumption from most businesses we work with,” details Paul Spencer, Managing Director of Focus Travel Partnership.

He adds: “Most smaller organisations already understand how to procure specialist services externally, from IT and marketing to legal and finance, so the travel conversation should be no different.”

Meeting expectations

While flexible, fast-moving SMEs are an attractive prospect for TMCs, particularly the increasing number of high-growth start-ups, they often require a different approach.

“The biggest issue is serving SMEs profitably,” explains Abi Cummings, a consultant at Festive Road.

“A TMC can spend almost as much time and effort acquiring and onboarding a smaller company as a mid-size enterprise, but the revenue opportunity is far smaller.

“The traditional high-touch enterprise service model simply doesn’t scale.”

“A TMC can spend almost as much time and effort acquiring and onboarding a smaller company as a mid-size enterprise, but the revenue opportunity is far smaller”

It doesn’t help that those booking travel in an SME live in an era of ‘great expectations’.

They are most likely to be using consumer-grade booking tools for business travel, which includes mobile-first tools and self-service support, including chatbots.

“Travel management in SMEs is often handled by someone whose primary role is not travel, such as a finance lead or office manager,” observes James Dow, UK and Ireland General Manager for the global chauffeur service Blacklane. 

“They want solutions where it’s easy to manage changes, resolve issues quickly and where workflows are automated. Bandwidth is tight, so any solution that reduces effort per task can make a meaningful difference,”

What SMEs require is simplicity – with bells on. “They want one place to book, pay and reconcile, minimal administration and something quick to switch on,” explains Cummings at Festive Road.

Increasingly, there are travel suppliers that have carved out a niche servicing SMEs. They make it work by either offering paired down services or rolling out a template they can use across multiple smaller businesses. This means they can still manage to turn a profit on servicing them.

“More modern tech makes it easier to sign up and manage small businesses, and many have had some reasonable success in gaining some of the market,” says Paul Tilstone, founder of temoji.

Industry outsiders

Technological developments mean it’s no longer just corporate online booking tools or TMCs that are vying for the attention of SMEs. Banks, hotels, airlines and leisure OTAs are all getting in on the act.

Loyalty points in exchange for travel spend are increasingly enticing purchases, while plug-and-play solutions allow more services.

Some of these suppliers are lowering the barrier to a more sophisticated travel spend by SMEs, ultimately powered by the data that businesses are sharing.

“The entry point into SMEs for corporate travel is a really interesting space to watch as the access to wider travel services begins to be available through many different access points. This even includes human resource systems and tech like Slack or Teams,” says Temoji’s Tilstone.

“What each of these has in common is that they start with some travel stickiness and then draw the business travel in. It doesn’t mean a single platform gets the whole spend as if it were fully managed, it is still fragmented.

“The SME space is therefore an increasing indicator of a multi-channel future.”

Time is money

Not all SMEs are constrained by tight budgets. Smaller law firms, private equity businesses, tech startups or financial services companies might instead regard time efficiencies as a major driver.

Even within larger organisations, specific groups of travellers – often the C-Suite – will require a higher-touch service, which might mean using a different TMC than the one used by rest of the workforce.

“They still expect high touch offline services. Senior partners in a law firm are not going to get involved with self-service,” says Gary Povey, Chief Operating Officer for Wings Global Travel.

Automation and artificial intelligence (AI) are helping to provide a more bespoke, personal service to SMEs, who can pick and choose what’s most important to them.

“We’re empowering businesses to optimise their travel strategies, regardless of size or budget limitations”

Melanie Quinn, Director of Corporate Travel at Travel Counsellors, says SMEs want modern technology, but also access to a real person who knows their specific requirements.

“For many organisations, highly personal service has historically depended on individual memory, manual administration and heroic effort,” she says.

“That is difficult to scale and creates inconsistency. But AI can help us to understand traveller preferences, patterns, priorities, policies and previous conversations.”

AI-driven data is also being used to help SMEs benchmark and assess their policies and programmes without committing to a full consultancy service.

Amex GBT’s Travel Toolbox, for example, is a digital platform giving consulting insights to SME travel managers to use at their own pace.

“We’re empowering businesses to optimise their travel strategies, regardless of size or budget limitations,” says Dan Beauchamp, Amex GBT Vice President, Consulting.

Having fewer resources no longer means SMEs can’t properly manage their business travel, and when the next crisis inevitably hits, they might be better prepared.