Like most requirements your business needs to fulfil, there will come a time when you ask whether managing travel is a function you should continue in-house or whether it is time to outsource.
Managing your travel is no exception and each element of your travel programme can be considered for outsourcing.
Managing any element (a Global Distribution System (GDS), IATA licence, ticket queues, airline plates or bank settlement plan) in-house, particularly for larger organisations, is a big job. They also tend to require a senior travel person to manage them – that’s a salary cost and human resource which could easily be freed up and allocated to something more core to your operations.
The reason behind companies choosing to manage their own travel is typically to provide access to net fares but there are two sides to this as it means also negotiating net fares direct with airlines on top of managing all the things listed above.
Contract airline fares are all based on how much volume an organisation can promise to book and how much market share they can leverage. TMCs tend to be part of industry partnerships and employ dedicated teams who focus on negotiating new net fares directly with airlines, which means new net fares are loaded into their platforms for customers virtually every day of the week.
The benefit of any organisation doing all of this by themselves is far outweighed by the cost of doing so, along with the missed opportunity of being part of a larger consortium of spend to assist with negotiations, which comes with using a TMC.
So organisations looking to make the most of their travel spend have two options.
Either they can continue to employ an in-house team and use a GDS natively alongside the offering of a TMC, granting access to all of the TMC’s net fares (on-top of the businesses existing ones). This eliminates the overhead and hassle of managing everything to do with a GDS and IATA.
Alternatively, organisations can outsource their travel entirely to a TMC. This reduces the need for a dedicated internal travel team to manage employee travel, as the individuals are empowered to book directly on the TMC’s booking tool. It also allows for a more streamlined travel programme as policy controls and duty of care requirements can be wrapped up in the booking tool itself.
So we return to the question; to outsource or not to outsource? The benefits in outsourcing any element of your travel programme reflect the benefits of outsourcing any operations; expertise, economies of scale and efficient allocation of your own resources. When the time comes that managing travel is negatively affecting your organisation’s productivity, it may be time to talk to a TMC.