July 16, 2024

Strength in numbers

Joining forces, nationally and globally, can help small and medium TMCs position themselves as viable alternatives to the ‘megas’, says Neal Baldwin

There’s nothing better than the warm embrace of pals. Whether you’re after relationship advice, help with a tricky work problem or just in search of a guiding hand, there’s strength to be found amongst friends.

And so it goes in business travel. In a market increasingly dominated by a handful of players, small and mid-market TMCs continue to seek solace by banding together as members of consortia or alliances. The end game? Using their combined size and clout for greater negotiating heft with suppliers, as well as delivering a more integrated – and potentially global – offering to potential customers thanks to a wealth of shared services and tools.

Of course, the consortia model isn’t new. But for travel managers, the differing ‘styles’ of tie-ups now available have added an extra layer of complexity when searching for a partner to manage their spend.

In the UK, Advantage Travel Partnership is perhaps the best-known grouping, given its longevity and high profile in the leisure sector. It boasts 409 members across both corporate and holiday markets in the UK and overseas, with 96 ‘pure’ TMC members handling a spend of £7.62bn last year. There’s plenty to shout about when it comes to technology and business solutions available in the Advantage package too; deals with leading third-party suppliers such as eGlobal Fares, TripStax, Thrust Carbon and Crisis24 ensure agents have a full suite of tools to meet client needs.

“Other mid-sized agencies are taking the ‘network’ route, which sees like-minded firms partner up to service the
big global accounts”

“OBTs, duty of care, traveller wellbeing, sustainability and budget control are pretty much top of the agenda for every travel manager and buyer nowadays,” explains Advantage’s new Managing Director Global Business Travel, Andrea Caulfield-Smith.

“We see Advantage as a one-stop business hub. We have the scale to negotiate on behalf of members so we can offer the tools, tech, rates and fares that simply wouldn’t be available to them individually.”

Home grown

Ironically, the Covid-19 downturn did wonders for one part of the TMC sector – homeworking. Widespread lay-offs of experienced corporate travel professionals has caused a boom in ‘one-man band’ outfits, most of whom serve their local SME communities.

While not strictly a consortia, Travel Counsellors has been a major beneficiary. It claims around 600 franchisees do some corporate bookings, while it has 300 ‘pure’ TMCs among its ranks handling accounts with a spend of up to £16m annually. It provides its members with an OBT, MI reporting tool and traveller location system.

“We saw double-digit growth last year and took gross sales in business travel to £250m,” explains Travel Counsellors For Business Director of Corporate Travel Mel Quinn.

“The concierge-style service our agents offer is really valued by SMEs that are growing their operations. They can become part of a travel buyers’ team and often handle bigger accounts by forming ‘micro-TMCs’ with other Travel Counsellors.”

The homeworking giant is additionally a member of alliance GlobalStar, predominantly for hotel and air rates and international emergency support.

Equal rights

Elsewhere, attention in the industry is sure to be on the Focus Travel Partnership from November, when its formal ‘non-compete’ agreement with Advantage finally ends. Focus formed in a split  from Advantage five years ago and currently consists of 55 members, and though both groups insist relations remain cordial neither would say how that change in status is likely to play out.

Currently a Focus partner must also be a member of Advantage but after November 2024 this will no longer be mandatory. While Focus and Advantage have a similar set up, incoming Focus Chief Executive Steve Banks, who joined the group this month from Agiito, insists ‘not-for-profit’ Focus is more member-centric and egalitarian.

“We’ve not got a big plan for a recruitment drive, but Advantage members may well come to us in the future,” says Banks. “The beauty of Focus is the relationships we have with suppliers. Ultimately, they all want distribution. Our validation is the longevity in our supplier list; they won’t dance with you unless you fit their needs.”

“In a market increasingly dominated by a handful of players, small and mid-market TMCs continue to seek solace by banding together as members of consortia”

Focus sets store in these relationships. It runs steering groups for sectors such as rail, air and technology, so member issues and feedback can be regularly shared for the benefit of the whole membership, plus events three times each year that give frontline staff of members (“Definitely not just the bosses!” says Banks) the chance to meet suppliers.

Banks is also clear that members are under no obligation to use any part of the Focus offering once they’ve paid their membership fees. “Our credentials sit in the richness of our supplier base and the quality of our resources. Partners buy in to our brilliant commercial terms but we are agnostic about how they service their clients

“Most are servicing SME customers that are buying travel in the UK. Global is a very crowded and difficult market, and being great on ESG, employee retention and traveller wellbeing are pre-requisites for the bigger accounts. We work to have the solutions so smaller TMCs don’t pull out of the tender process because they are frightened by the big boys.”

Going global

It is perhaps no surprise that smaller TMCs see the benefit of consortia. But what of larger firms? In recent years, both Reed & Mackay and Gray Dawes have eschewed the more collegiate approach in favour of acquisitions to build their own global networks.

R&M snapped up rivals in Germany, France, Australia and the US before its sale to TripActions (now Navan) in 2021. The buying has continued since then, with Navan now Europe’s fourth largest TMC. Meanwhile Gray Dawes has made eight significant purchases, including Express Travel (US)
and MP Travel (Australia) in 2023 and VCK Travel in the Netherlands in January, pushing gross sales beyond £500m.

There is a halfway house. Other mid-sized agencies looking to offer a truly global service are taking the ‘network’ route, which sees like-minded firms partner up to service the big accounts.

ATG Travel Worldwide is one such example, with global gross sales topping $6.8bn. The group is rigorous in only having one member in each country to avoid conflicts of interest when bidding on global accounts, while all bookings pass through a central management system.

“Widespread lay-offs of experienced corporate travel professionals has caused a boom in ‘one-man band’ outfits, most of whom serve their local SME communities”

Sarah Wilson, owner of UK member Ace Travel Management, says the major benefit for her business is ATG’s strong tech offer, which covers everything from pre-trip approval to MI, analytics and traveller tracking.

“We are not dots on a map to ATG,” says Wilson. “There is a very collaborative feel among members and we work to service global accounts together, which means travel managers and travellers get a personalised service in every market. What’s coming with NDC isn’t a concern. Many larger customers have negotiated rates anyway and with ATG our clients can always get the best local rate.”

Meanwhile, newest kid on the block is One Global, formed as a partnership between UK-based Clarity and US firm World Travel. It was created in October 2022 and already has 21 members, $5.3bn purchasing power and handles 10.5m transactions globally.

Like ATG, members are compelled to use reporting tools and share data, but otherwise have free rein.

“We’ve had a lot of interest from TMCs who want to join One Global,” says Clarity Sales Director Ewan Kassir. “Those that have come on board have been handpicked after plenty of due diligence.

“When you have a mega-deal such as the Amex GBT purchase of CWT, it makes the whole market sit up. But it presents plenty of opportunity because there are so many accounts out there valued at $10m-$50m that don’t want to be handled by a huge giant.

“The thing One Global insists on is strict service level agreements and KPIs for all members. Often the industry has been worried about developments such as AI, but no client engages a TMC for that. Travel managers want great service. Delivering consistency across the world is the pillar of success.”

The main players:

Advantage Travel Partnership

  • 409 members (96 ‘pure’ TMC members)
  • Head office: London, UK
  • Key member benefits: Large suite of third-party tools, including NDC booking platform (Air Gateway), carbon reporting and offset (Thrust Carbon), safety and risk management (Crisis24, Securewest, GoPass Global), data automation & MI reporting (Travelogix & Grasp Technologies), data capture and itinerary intelligence (Traxo), mid & back office solutions (Midoco, Procon). The Advantage Air programme features net fares from 50 airlines, while the Global Accommodation Programme (GAP) by Advantage offers over 30,000 properties and is set to grow next year thanks to a tie-up with US partner Hickory. Members can also access business insurance and training.

Radius

  • 100+ travel and meeting specialist members (in UK – Clyde Travel Management, Inntel)
  • Head Office: North Bethesda, Maryland, US
  • Key member benefits: In-house tech includes Radius PTA pre-trip authorisation, Radius Secure travel risk and duty of care tool and a delay and cancellation compensation tool. The Radius Global Partnership Program offers best available rates across a raft of hotel chains and boutique properties, with extra discounts of up to 10% and guaranteed last room availability

GlobalStar Travel Management

  • 55 members ( in UK – TakeTwo Travel, Omega World Travel, Travel Counsellors)
  • Head office: London, UK
  • Key member benefits: The group’s ‘Star’ suite of tools include ReportStar global reporting tool, SecureStar risk management and traveller tracking, OnlineStar online booking tool, TripStar app and ProfileStar profile management. GlobalStar members also get access to the HotelStar programme for accommodation and FareStar programmes for flights.

Focus Travel Partnership

  • 54 members
  • Head office: Ashford, Kent, UK
  • Key member benefits: Focus is lauded for its strong air and rail programmes. Members also get access to accommodation programmes. Tools include Cytric by Amadeus OBT, Focus Farefinder, Focus Pinpoint and TripStax

ATG Travel Worldwide

  • 11 members (in UK – Ace Travel Management)
  • Head office: Utrecht, The Netherlands
  • Key member benefits: ATG’s strength is its in-house tech. This includes ATG Request self-service travel request application, ATG &Me profile management, ATG Approve pre-trip approval, ATG Extra customer service platform, ATG Vault reporting and analytics.

Lufthansa City Center

  • 480 members (in UK – Good Travel Management)
  • Head office: Frankfurt, Germany
  • Key member benefits: Free access to flight consolidator Aerticket, LCC hotel programme featuring 40,000 properties. Deals with Air Gateway and Snowstorm as distribution platforms,  SAP Concur for OBT and expense management, Tripstax for Reporting Solution and A3M for duty of care.

Travel Counsellors

  • 2,000 homeworker franchisees based across six countries – UK, Ireland, the Netherlands, Belgium, South Africa and the United Arab Emirates. Around 600 of these make corporate bookings; 300 are ‘pure’ TMCs.
  • Head office: Manchester, UK
  • Key member benefits: OBT (MyTCOnline), MI and reporting (MyTCInsights) and traveller tracking (MyTCLocate). Travel Counsellors franchisees also have access to Travelport GDS, direct connect NDC with major airlines, including British Airways, and technology, hotel rates and airline fares via the group’s GlobalStar membership.