Travelling has become an integral part of the corporate world, and travel management has emerged as a basic requirement for most companies. Simply put, travel management is a strategic approach to travel with dedicated companies taking care of aspects like travel arrangements, documents, foreign exchange, accommodation, insurance, etc. for travelers on behalf of principal suppliers. Regarded as the third largest controllable expense among Fortune 500 companies, the global travel management services market, according to analysts at Technavio, is poised to grow at a CAGR of 7% by 2020.
When it comes to corporate travel, travel management services broadly comprise of:
- Travel booking and tracking
- Issuance of travel cards
- Travel safety and insurance
- Foreign currency
- Car rentals
- Travel advisory
Until recently, the approach of travel management companies was driven by cost-savings. But as more companies emerge and competition increases, the focus is turning towards providing one-stop, tailored, and highly customized travel and hospitality solutions. Additionally, with the advent of technological innovations, travel management providers are partnering with technology providers to offer a full range of travel support services, including tools for booking, expense management, and travel budgeting. One of the best examples of this type of partnership can be seen between SAP and Amadeus. These companies have collaborated in order to integrate SAP cloud services with travel and expense solutions.
Another major change that global travel management companies are undergoing is the move towards ‘localization’. Organizations are looking for companies that have expertise in local rules, regulations and administrative policies, which has resulted in several regional players emerging as key providers of travel management services. This has not only increased employment opportunities at the regional level, it has also helped organizations obtain better deals thanks to low overhead costs.
With cost-cutting being the prime focus of every organization, travel management companies have also created self-booking tools. These tools help large businesses bring down their transaction costs. As most self-booking tools offer consolidated travel information, not only is the transaction reduced by 30-50%, but the price of travel tickets is also 10-15% less than the original cost. GetThere.com, trainline.com, KDS and Cliqbook are some of the popular self-booking tools used by major MNCs.
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