Alice Linley-Munro is Resourcing and Travel Manager at Oil Spill Response, an organisation that typifies the average SME. Over the last 10 years, the company’s £1m travel spend has soared to £2.5m from 160 travellers. Due to the nature of its business as an immediate response service to oil spills globally, much of its travel is booked last minute.

Linley-Munro demands a more hands-on approach from her TMC and expects all suppliers to be more engaged.

“I know all my travellers, while other travel managers in a huge corporation won’t, and I expect high-touch, personal service,” she says.

“Due to the last-minute nature of a lot of our travel there has to be give and take. We ask a lot of our suppliers and they always help when they can. We have an open and honest relationship.”

SMEs’ nimbleness, growth potential and widening travel needs provide a symbiotic relationship with TMCs, airlines, hotels, technology companies and ground transport firms. On a macro level, SMEs are the lifeblood of the UK economy (and make up 99% of businesses across Europe), and thanks to their flat hierarchy, they helped fill the empty coffers of the industry post Covid.

“Coming back from Covid was rocky but we really didn’t stop traveling,” says Linley-Munro.

One difference she has noticed post Covid is the recognition of the value an SME brings to the table. “Often we didn’t get a new piece of tech before Covid but now it feels like we’re being pushed forward as a soft trial as we have such a mix of business – transient and crisis,” she says.

She notes that suppliers are starting to realise the power of the SME and “are doing more with less and tech is helping with that”.

Levelling out

So, are SMEs now on a level playing field with enterprise clients?

“Absolutely,” says Claudia Jackson, MD UK & Ireland at BCD Travel, where the SME has always been a core customer and accounts for 70% of customers globally.

SMEs are defined by spends of between US$100,000 to US$10m, although a spend definition is not clear cut as industry vertical and company culture holds just as much sway. “There are no hard and fast rules,” explains Jackson.

Arguably TMCs have lifted their game for SMEs, partly because technology has evened out provision, and also because these smaller-sized clients don’t just want a booking tool any more but a whole raft of services comparable to those synonymous with larger enterprise clients.

“Enterprise customers need the same as SMEs in most cases,” says Dawn Lister, Senior Sales and Business Support Manager at Premier Inn. It’s why the company’s business products are identical for all companies regardless of size.

For example, up to six weeks interest-free credit and up to 15% discount on flexible rates is on offer to all customers through Business Account.

Trend watch

SMEs looking to move from an unmanaged space no longer need to gravitate towards a smaller TMC as TMCs of all sizes are focussing on this sector.

Andrea Caulfield Smith, MD Global Business Director at The Advantage Travel Partnership, has spotted other trends: “We’re seeing a significant uplift of corporates wanting to use TMC services, a younger demographic keen to embrace AI and sustainability, and travelling more in economy and premium economy rather than business class. Time is money and they have less disposable income so they tend to book earlier in advance and take advantage of better rates,” she says.

She notes that reasons for travel have changed. “There was US$270 of sales generated for every $1 spent and now it’s US$145, so nearly halved. That’s because travel is no longer just about sales generation but training and education and the like.”

She agrees that the personal touch is key to woo SMEs; they need to pick up the phone and speak to a human being.

“By comparison, the larger enterprise clients are more tech savvy and will use online booking tools more.”

Adam Kerr, CEO and founder of Tripism, notes: “Historically, SMEs were under-served in their travel programmes but now they want risk mitigation, sustainability and so on, and I hope SMEs will be acknowledged more now.

“Look at them one by one then no, but collectively they are a highly attractive market,” he adds.

Tripism is meeting the needs of SMEs with a platform that replaces the intranet by delivering Trip Advisor-style content. It has recently extended its solutions to TMCs, partnering with Good Travel Management to redefine the SME corporate travel experience.

Safe bets

There are other attractive attributes of SMEs which make them a magnet for suppliers, says Scott Davies, CEO of ITM.

“The SME sector is generally less volatile than larger groups of customers and spreading your bets is a safer strategy, and they tend to be more lucrative in terms of the bottom line.”

The changing distribution landscape offers TMCs an opportunity, he adds: “They don’t fare well in complexities of travel so the distribution fragmentation adds to their burden. When there are so many moving parts it’s difficult. The TMC is the trusted confident when it comes to the murky world of the travel eco system.”

What is a common thread for the majority of SMEs is their general lack of a dedicated travel manager, in-house business travel resources or dedicated bookers, so they are ripe for the picking.

What helps SMEs manage their business is the “heavy lifting” TMCs do for them, explains Laura Busby, Commercial Director at Good Travel Management.

“They are more labour intensive and we‘re like an outsourced travel PA. It’s about hand-holding and discovering what behaviour they’re trying to drive. You can help them so much.”

Deal maker

Anything under 100 nights won’t trigger a hotel deal so TMCs group together the volumes of multiple SMEs so they can access nett fares and overrides, and value-adds such as breakfast, Wi-FI, parking, a line of credit via invoicing or hotel billbacks, MI, CO2 reporting, a programme that entices travellers and retains talent and so on.

Route deals are easier to achieve now that clients don’t need to spend hundreds of thousands of pounds to become eligible.

“Today, it’s tens of thousands of pounds – around £50,000 now,” says Donna Joines, Head of Corporate Traveller UK.

Suppliers tend to provide simple, broad-based solutions to appeal to a wide number of SMEs. South Western Railway, for example, offers a dedicated Business Direct booking portal for SMEs with a focus on after sales service to expedite ticket refunds and the like.

“Our big thing is our after sales service,” says Joe Thurgood, Business Sales Manager.

“It’s a one-to-one conversation on the phone to resolve any issue within 24 hours.” Data can unpick spend by cost, reason of travel, type of ticket purchased, CO2 comparison etc.

“You take a gamble with SMEs on a spend of only £15,000 a year, but that could double,” explains Thurgood.

Team work

Recognising their value, Virgin Atlantic has set up a team dedicated to SMEs and specifically to reconnect with corporate loyalty Bluebiz clients and double the numbers after the airline cut back on resources during Covid.

“A huge part of our 2024 plans is to re-focus and re-engage with this sector,” says Amy Stirling, Senior Manager, Sales and Business Development.

SMEs who outgrow the airline’s loyalty club can move to a corporate contract.

Despite sharing common characteristics with enterprise clients, there are clearly nuances, explains Virgin’s Stirling.

“SMEs are different from the global client. They’re more agile and driven by cost but looking for exceptional travel experience and loyalty rewards, and you’re always talking to the person who travels.”

SMEs are able to manage their business travel more efficiently and cost effectively in the post Covid world and are mutually beneficial to travel suppliers and TMC alike.