As your company starts to grow and diversify, you may find yourself becoming responsible for divisions and staff around the world. While this is fantastic news for your business, if you’ve grown into a regional or global organisation, you’ll no doubt be grappling with the challenge of managing travel in different markets.
It might mean that the amount of international flights you are booking begins to surpass the domestic ones, short-haul flights becomes long-haul flights, economy is traded in for business class and your current travel risk management strategy probably doesn’t cut it anymore.
One solution is to consolidate your travel program globally, with the aim of increasing your level of control, consolidating your supply base and, perhaps most importantly, reducing your level of risk.
But not all organisations are in a position to globalise their programs – nor does it make sense for every business to do so.
Is a globally consolidated program right for you?
There are a number of factors that are important when considering the move to a globally consolidated travel program:
- Spend levels: Even though you have operations in various countries, you may not have the size and scale needed for a global program. A rule of thumb is that a minimum travel spend of $5 million is required to make it work.
- Technology adoption: Most travel programs are built around self-booking and other technologies, and unless your organisation is ready to embrace the tools, you may not benefit from any changes.
- Culture: To work together, your divisions need a common business culture. And to further complicate matters, you also have to deal with different regional cultures and different ways of doing things in different markets.
- Access to content: Various markets have unique ways to access travel content and your policy will have to accommodate all of that too.
- Consolidation: On paper, by adding all your divisions’ travel needs, you should be able to achieve critical mass and leverage in negotiations with your suppliers, but that is not so easy on the ground, where the supply markets may not match your demand patterns.
Travel management models
While you are considering they question of whether or not to consolidate, you should also have a think about the different travel management models and which of them may suit your travel program best. We've broken them down in a little more detail below:
What is it?
This model is based on selecting the most appropriate solution for each market, and usually involves using a different TMC for each region and selecting the best GDS and booking tool to access the local travel inventory.
The main benefit of this approach is that you are working with a TMC that provides you with intimate knowledge of the local market and the best in market technology and service. Consequently, this model allows you to adopt policies relevant to each region, tapping into the best local expertise and the broadest available supply chain. It also accommodates those tricky cultural differences.
This approach can be quite cumbersome and requires internal travel managers and/or arrangers in each market. It also means you may miss out on some sourcing consolidation, with each market buying locally for itself.
But perhaps the biggest challenge is data consolidation – getting a full understanding of your travel patterns and spend from different suppliers with diverse accounting and reporting systems. One way around this is to add a third-party data consolidator to pull it all together.
What is it?
This model comprises a single travel management company servicing you in all locations globally. This includes the same GDS, same technology and a standard SLA.
The pros of this approach is that you get the Global Management of your travel program (e.g. reporting, account management etc.) which is lacking in the regional approach. Additionally, there is a continuity of service and technology across all service, which means that if your travellers or arrangers move countries, there is no upskilling and re-training process involved.
The cons are that because your program is managed by a single TMC globally, you get a “one size fits all” travel program, which means that don’t have access to the market specific high touch service and best in market technology that the people managing your travel program in each of your emerging markets have come to expect. Additionally, you are forced into a technology solution in all markets that may not necessarily fit. This a pertinent consideration for emerging markets.
A third option is to look for a TMC in your core market that is part of a global network. Besides the mega-TMCs, there are a number of networks of leading TMCs, each with expertise and linkages in their home markets. By combining the strengths of these local leaders, travel buyers have access to a virtual global network. This model combines the strengths of both the Regional and Global approaches to deliver a service that will meet the expectations and requirements of your stakeholders in each of the local markets, while working within the frame work of a global travel program.
This model allows you to get the best of both worlds. You get to work with a local TMC, which equates to best in market technology and service that is well suited to the culture. You also get the benefits of global support for your travel program through a global Account Management structure and strategy, global reporting tool and a standard service level agreement globally.
It really depends on the network... Even though they present themselves as a network, this solution will expose you to a bunch of individual TMCs of varying degrees of competence. It is important to scrutinise each network member in your key markets to ensure that they’re up to the task. Additionally, you can also have a chat to the network themselves and determine how they select their partners, and the validation process that they need to go through.
GlobalStar, for example, only approaches TMCs that are in the top 5 in their market. QBT works in partnership with GlobalStar to provide global coverage for all clients who require it.
So where to from here?
Firstly, identify whether it is time for your company to globalise your travel program, and then, find a solution that matches your requirements.
If you’re expanding into the global market and would like some advice on how to proceed, or would like to know more about our partnership with GlobalStar, contact one of our travel management consultants.