Time for a complete rewiring
The long-form RFP process is no longer fit for purpose, says Festive Road's Louise Kilgannon, so what's the answer?
In early 2021, we undertook a research exercise at Festive Road. The purpose? To review the TMC RFP process through a post-pandemic lens and to understand the requirement for a new TMC value proposition.
Over a period of two weeks, we received survey feedback from 114 global travel buyers and conducted 18 long-form interviews with both global buyers and TMC sales leadership.
The results demonstrated a failure in the existing RFP process to generate compelling engagement and insights. This echoes existing research conducted by Festive Road four years ago. However, we also see opportunity for a new process and a new future proposition for partnership.
It is clear from the results that the existing long-form RFP process is no longer fit for purpose and 69% of buyers surveyed would agree. In fact, it appears we are all on the same page here. The process was described as “archaic, old-fashioned and uninspiring”.
“This is the next evolution of the TMC. They need to challenge buyers, understand the challenges they are facing, and come up with creative solutions”
But, of course, some kind of buying process is necessary, so what are buyers really looking for? At Festive Road we look at sourcing from three angles: culture, capabilities and commercials.
Culture leads as the most important indicator of a future partnership, however it is perhaps the least tangible measure. Key points included that culture encapsulates people, approach to service and a company’s ethos when it comes to (amongst other things) sustainability, technology and diversity. In our survey, 87% of buyers shared that they want to meet with the specialists at a TMC vs. senior managers. In short, they want to meet the people who will be doing the job.
When it comes to capabilities, it is clear there are a series of perfunctory tasks that we would assume all TMCs can carry out with some level of competence. But what really matters to buyers? 92% want real-time servicing capabilities on trip, 87% are looking for traveller health and wellbeing services and 85% shared that sustainability has increased in importance. These were all existing trends, but accelerated by the pandemic. Buyers are juggling competing priorities so this is a huge opportunity for TMCs to provide much-needed support and expertise across a range of new and emerging trends.
It is no surprise that the last 12 months has left buyers with renewed concerns around the financial robustness of TMCs. 95% of buyers surveyed shared that commercials was a key area where additional assurance was required. They were particularly concerned with a TMC’s future ability to invest. When it comes to commercial propositions, 86% of buyers are looking for less complex pricing models. Anecdotally, the pause in travel put fees under the spotlight and buyers are under increased pressure to get future models right. Interestingly, TMC sales folks shared that there is little take-up thus far of more creative models, however this may change.
With 67% of buyers saying the TMC remains their primary servicing partner, the opportunity for a new value proposition is high. Travel managers are, themselves, under increased pressure to demonstrate the value of a managed travel programme and 82% of buyers want to know more about the TMC’s long term strategy and value proposition to help support that.
One buyer shared: “This is the next evolution of the TMC. They need to challenge buyers, understand the challenges they are facing, and come up with creative solutions.”
There is no doubt that as travel returns, TMCs will be dealing with a diverse set of demands from a broad set of clients. With recent mergers and acquisitions it seems there is no better time for TMCs to nail their colours to the mast and ensure their goals are aligned to those of their clients.