2010: A Tricky Year for TMCs?

Will 2010 be a tricky year for TMCs? ABTN spoke to BTMSBusiness Travel and Meetings Show (now the Business Travel Show) 2010 speaker Simone Buckley, Co-Founder and Director of Bouda, to find out more.

ABTN: Without giving too much away, why should travel managers attend your keynote panel? 

Simone: We have senior representatives from TMCs, technology providers, hotels and airlines on the panel ready to answer the toughest of questions along with some of the most respected and experienced travel buyers in the UK who will not be shy in sharing their opinions and ideas on this subject.

ABTN: What is the biggest issue facing the business travel industry in 2010?

Buckley: The continual pressure from companies to reduce the price of a business travel transaction coupled with the general downturn of travel buying means that TMCs, airlines and hotels are suffering from profit erosion more than ever. The recent recession seems to have escalated the pace of technological evolution in business, which means even greater investment is required from TMCs and suppliers to stay ahead. 

Now, more than ever, TMCs need to protect the alternative revenue streams that are available to them. This has resulted in the business travel buying audience wondering how much of the TMC advice and direction they get is in their interest and how much is in the TMC's own interest. 

Will suppliers such as airlines and hotels continue to see the value of marketing agreements with TMCs if companies gain absolute control of their buying power? Or will direct relationships become direct booking agreements? We are already seeing an increase in companies contracting directly with technology providers whether that is GDS or self booking tools, as well as a move to specialist data warehousing companies. 

This potential unravelling of the travel service provision is a major issue for everyone concerned.    

ABTN: And what are the biggest issues facing TMCs?

Buckley: TMCs are facing pressure to invest in technology to remain at the forefront on behalf of their clients but on a declining income. Demonstrating value is getting harder and harder for TMCs, which also impacts their earning potential. Airline unbundling is causing issues with data reporting, which will be costly to rectify. In the UK market rail commission reduction and the complicated alternative bonding solution will cause some smaller TMCs concern.

Most TMCs use third party technology companies and they are reliant on their chosen partners to maintain a leading edge in the provision of GDS and online solutions. If one of these technology providers falls behind, the TMC could suffer.

Simone Buckley is chairing a keynote panel called ‘Reviewing transaction and service fees - the good, the bad and the ugly!' at 14:30 on Wednesday 10 February at BTMS 2010.