A Tale of Two Business Travel Programs Transaction vs. Travel as a Service programs

Once upon a time, there were two companies who were recovering from the Covid-19 Pandemic and needed to evaluate their Business Travel provider. In addition, their leadership team was ready for employees to get back out on the road and get face-to-face with customers. Fortunately, both business travel programs were vastly different. One, “Company A,” was working with a transactional business model, and the other company, “Company B” was working with a membership model with TMC (Travel Management Companies).

Since 1995, when airlines cut commissions, the TMC business model has been a ‘transaction fee” model, primarily, in fact, 83% in 2020. Every time a TMC issued an airline ticket, they were charged a “fee.” Over the years it has morphed into charging fees for every type of service. One TMC I worked for had 100+ services and fees. This is hard to reconcile from the customer side, often not fully explained or disclosed.

Newer models are emerging, fully loaded, per “trip fee,” are gaining popularity. Which is a flat fee, per trip, but it only covers the traveler for that specific trip. What if they make multiple trips in one month? You still end up with two times the fees.

Whereas the latest subscription/membership model Travel as a Service (TaaS) allows companies to create a travel program that aligns traveler needs with cost, a more traveler-centric approach. At DCX, we call it the Navigator Travel Pass™. Travelers have the choice to choose what level of service they need for one monthly flat fee. In addition, travelers can have multiple trips in one month for that one fee, and with options for prepaying annually, six months, or month to month, it is much easier to budget.

Both Companies A & B have 100 travelers who travel frequently. Their average total transactions are 1,200 a year. They use an OBT (Online Booking Tool), Travel consultants for changes, international bookings, and after-hours service.

Here is how they compare:

So, the moral of the story is – that easily subscription/membership (TaaS) base model is always a cost-saving, 47% here, with these companies. However, a per-user model, Travel as a Service (TaaS), not only saves money but gives travelers the support they need at any time, without feeling like they cost their company more. Not to mention the commission rebate we pass back to you. Your TaaS travel program would more than pay for itself.

If you have not looked at your TMC fee structure lately, especially since COVID19, now's the time to speak with us –

By Lisa Simpkins, Captain, DCX (Digital Cloud eXperience) Travel & Technology

4/22/22

DCX (Digital Cloud eXperience) Travel & Technology™

Reference: https://www.businesstravelnews.com/State-of-the-Industry/2020/TMC-Paradox-Most-Valued-Services-Don-t-Translate-to-Profits