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Travel agencies back on the radar of corporate travelers

Travel agencies back on the radar of corporate travelers

Battelle, a nonprofit government contractor with more than 22,000 employees at 60 sites, has booked its employees' trips through Travel Management Partners since the corporate travel agency was formed more than two decades ago.

Battelle spokeswoman Katy Delaney says she has memorized the phone number for the Raleigh-based agency's 24/7, 365-days-a-year customer helpline.

"It's hard traveling for business," she said. "Adverse weather can throw things off. Security issues come up. You're dragging around luggage and flights get canceled and you have an important client meeting."

When those problems arise, she added, "it's just reassuring to know when you're out there on the road that you can call (TMP) and they'll take care of you."

The advent of online travel sites such as Travelocity and Orbitz once triggered talk that travel agencies were doomed.

But corporate travel agencies like TMP have survived for a number of reasons, including their ability to obtain volume discounts and the complexity of traveling to multiple cities on different airlines - plus the need to book hotels and ground transportation at each location.

Many businesses have decided that their executives' time is too valuable to be "playing around on the Internet" making travel arrangements, said John Lewis, TMP's co-founder and CEO.

Since it started in 1994, TMP, which today is one of the largest corporate travel agencies in the Southeast, has earned a reputation for forging long-term relationships with customers.

"If they lose a client, it's because it got bought by another company," said Don Swartz, managing director of CTBR, a travel consulting firm in Florida.

TMP has survived and prospered in an industry that has been undergoing significant upheaval, said Lewis, by taking care of its 135 employees, including more than 30 at its headquarters on Highwoods Boulevard. The agency has added about 15 employees over the last 12 months.

If you make your employees No. 1, said Lewis, the employees will make your customers No. 1.

"What we always try to do with our people is provide competitive salaries, excellent bonuses, whatever we can come up with - free trips, things of that nature," he added.

Lewis noted that the agency's vice president of operations and chief financial officer have been with the business since the beginning. And, in order to minimize layoffs during the recession when corporate travel "just dropped off the table," he cut his own salary nearly in half for a 14-month period.

In 2015, TMP reports that it booked more than $300 million worth of airline, hotel and car rentals for its roster of 40 clients.

TMP, which charges a flat fee that it negotiates with its clients based on the level of service provided, doesn't disclose its revenue.

But Lewis did say that the agency's annual revenue growth has averaged 10.5 percent over the past three years. So far this year, revenue is on track to rise 15 percent. That increase is fueled by expanded travel by existing customers whose own businesses are growing, a smattering of new clients and adding to the company's existing services.

Corporate travel agencies can take the lead on, or provide support for, negotiations on obtaining significant volume discounts from the airlines, hotel and car rental companies.

Beyond those negotiated discounts, TMP's agents "are better at finding lower fares and rates than the typical traveler who goes to Orbitz," said Kevin Brown, TMP's vice president of strategic sales development. "Our agents are highly trained professionals, they're very experienced, and this is what they do all day for a living."

Agencies such as TMP also can configure their software so a customer's travel policy is incorporated into the reservation process.

"Every company that spends money on travel has to have a policy that says who can travel, when they can travel, how they pay for their travel, how they get reimbursed," Swartz said.

The dollar value of air travel booked by all U.S. travel agencies - those like TMP that specialize in corporate travel as well as those that focus on individual and leisure travel - rose 1.85 percent in 2013 and 4.02 percent in 2014. Last year, the dollar value fell 1.5 percent to $88.3 billion because of lower average ticket prices; the number of ticket transactions actually rose 6.2 percent, according to Airlines Reporting Corp.

Elanah Abrams, office services manager for Durham advertising agency McKinney, has been a TMP client since 2011.

"They work in the same way we do where you dig in and get to know (the client) you're going to be working with, you identify their pain points, and deliver that really personal touch," she said.

Corporate travel agencies are still feeling the after-effects of the airlines' decision in the 1990s to scrap commissions. Although TMP has always worked under a fee arrangement, most agencies back then were built around commissions.

Terminating commissions, said Swartz, has led to "hundreds of consolidations over the past 15-plus years and many more closures" among corporate travel agencies. However, he added, the corporate travel agencies that have survived are by and large more profitable than ever.

That's in part because the agencies have been expanding their menus of services.

For example, like many corporate agencies today, TMP offers a security service that enables it to track, whenever a terrorist event or natural disaster erupts anywhere in the world, whether a customer's employees are in the vicinity and other pertinent information - such as where they're staying, when they're leaving and how to evacuate them. Other services include providing detailed analyses of travel spending and offering a mobile flight status system that covers all airlines, making it easy for travelers who have to switch en route from, say, Delta to Air France.

Lewis, 65, has three sons who work at the agency but said he has no plans to retire any time soon. Instead, he's intent on continuing to expand the business.

As healthy as TMP's growth has been in recent years, Lewis believes it could grow even faster. So earlier this year he recruited Brown, who previously was vice president of global and strategic markets at industry behemoth HRG, to spearhead efforts to attract new clients.

"You have a very volatile market in that there are a lot of agencies being acquired right and left," said Lewis. The thinking is that when an agency is acquired, some of its customers invariably decide to explore their options.

And when a prospect asks TMP for references, the agency is so confident of getting high marks from any one of its clients that it hands over its entire client roster, complete with contact information.

"I do that for a reason," Lewis said. "It makes it a challenge for the competition to do the same."

Read more here: http://www.newsobserver.com/news/business/article103671287.html#storylink=cpy

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