April 21st, 2023

Is Your TMC Service Fee Working For You?

How your Travel Management Company (TMC) bills for their services is an important part of any managed corporate travel program. As the world of travel becomes more complicated, our role as a TMC is becoming even more important to the success of your travel program. Travel Leaders 365 offers two types of TMC service fee models; a traditional transaction based model, and a more streamlined flat monthly fee based on transactions. Travel Leaders 365 offers both TMC service fee models, depending on the needs of your company:

Traditional TMC Service Fee Structure

In a traditional TMC service fee structure, the TMC will charge your company per transaction that your travelers engage in with a TMC. Transactions can include making a new reservation, canceling an existing reservation, making changes to a reservation, etc. These service fee’s are often tiered on type of transaction done, and whether or not the transactions occurred online through an Online Booking Tool (OBT), such as Concur, or through a Live Advisor (via phone, email or live chat).

The Pro’s of this Traditional TMC Service Fee structure are:

1. If your company bills back to clients, we can tie service fee’s to specific project codes, job numbers, client folders, etc
2. The more traditional service fee model may receive easier acceptance within your organization

The Con’s of a Traditional TMC Service fee structure are:

1. Complicated reconciliation for fee’s
2. Challenges for your Accounting Team on how to bill back fee’s internally
3. Frustration from travelers on understanding the fee structure
4. Perception of another barrier to use a TMC as part of your managed travel program
5. Higher per transaction and total costs

Travel Leaders 365 Monthly Flat Fee Structure

With the feedback from our customers, and looking at the industry as a whole, Travel Leaders 365 now offers an additional pricing model for managed corporate travel programs. Taking into account your annual transactions, Travel Leaders 365 will provide you flat rate monthly pricing. The pricing model also has transaction thresholds to manage your travel spend, as it increases or decreases. The Travel Leaders 365 Monthly Flat Fee model gives your travel program some consistency, that it otherwise may lack.

The Pro’s of this Monthly Flat TMC Service Fee model:

1. Consistent pricing
2. Streamlined budget item for your accounting and finance teams
3. No frustrations from your accounting team’s challenges to reconcile individual fee’s
4. No traveler frustration with paying additional up front fee’s
5. Up to a 20% reduction on per transaction and total costs

The Con’s of this Monthly Flat TMC Service Fee model:

1. Not as easy to correlate fee’s to specific specific project codes, job numbers, client folders, etc
2. May be harder to present internally to your corporate teams

ROI On TMC Service Fee’s & Overall Program

In either service fee scenario, the Return on Investment (ROI) that your TMC delivers on your Service Fee spend should be an important metric on your overall travel program. With Travel Leaders 365, we maximize our clients ROI through our wide array of exclusive products and discounts across Air, Hotel and Car providers, delivering our corporate accounts lower pricing and better benefits.

As part of our consulting process, your team at Travel Leaders 365 will help guide you on the best pricing model that would fit your company’s needs, as well as understand your businesses requirements to better estimate the savings and ROI we can provide your travel program. We look forward to working with you and helping you improve your business travel program.