Suppliers Show New Willingness to Engage
Small and midsize companies were seen as the driving force behind the rebound in post-pandemic travel and, even in the face of higher airfares and hotel rates, this trend looks set to continue into 2024.
Some SMEs like medical unicorn Palmetto Infusion are in high-growth mode, where a wave of new hires has resulted in an increase in travel to training events at its Columbia, S.C., headquarters and to deliver services at some 40 U.S. clinics.
Travel manager and executive assistant to the CEO Lisa Litt said the company has a “light” travel policy with 150 active travelers but no managed program. Given the recent rise in travel, however, she’s now on the hunt for an online booking tool that will help automate manual processes around expense reporting and also offer greater visibility on traveler whereabouts in the case of an emergency.
Non-profit organization Rotary, which continued to travel during the pandemic, has a global program with some 7,000 trips a year—where 80 percent of travelers are volunteers and mostly one-time travelers. Controlling travel spend is key priority for travel services manager Carla DeSanto, who said the organization last year came close to its pre-Covid travel spend of $7.3 million. Since the pandemic, DeSanto has tightened duty-of-care polices and is looking to consolidate her TMC affiliates outside of the U.S. to better capture spend data.
Travel management companies also are reporting an increase in interest from SME clients looking to newly implement managed travel programs.
“The SME segment has rebounded very strongly,” said Jean-Christophe Taunay-Bucalo, chief revenue officer at TravelPerk, which has about 70 percent of its business in this segment. “It is likely at the same or above 2019 levels by now, though there are some slight variations depending on industries and geographies.”
The Barcelona-based travel management platform entered the U.S. in 2021 and it is now its largest market for new business acquisition. “We have more than 70 people working in the U.S. market,” said Taunay-Bucalo. “We have developed strong ties with expense partners within this market as well as key inventory partners, and we intend to continue doing so.”
The company has also been “investing heavily in AI” to “enhance the traveler experience” and automate post-booking processes such as modification and cancellation, according to Taunay-Bucalo. “The SME market has always been the largest in volume so there’s a lot of opportunity,” he said.
Gant Travel Management, which specializes in small and midsize corporate travel, has also seen new client acquisition return to pre-pandemic levels.Gant president and CEO Patrick Linnihan said companies with a high sales or high service focus are traveling more and looking to rein in costs while making productivity gains and driving down risk during travel.
“There’s an awareness of the increasing cost [of travel] and an awareness of the question, ‘How can we do this better?’” Linnihan said of the mindset of new clients. “We’re also starting to see duty of care matter inside the SME segment [in a way] that we didn’t see before.”
Along with SME business growth, Linnihan attributed the increased need for managed travel among this segment to a series of industry disruptions—from the talent crunch on the supplier side, to changes in distribution and a new wave of Millennial business travelers.
Gant already has tools to support ‘light’ travel management. This includes its proprietary booking tool, Tripcircuit, which now wraps in New Distribution Capability content from American and United airlines.
“The chaos of the ecosystem is such now that [SMEs] are asking for help,” he said. And competition to come to their aid is heating up. “We’re trying to beat each other by being able to identify who needs travel and how we deliver exactly what they want,” Linnihan explained.
“If you’re in [the SME] space, this is probably the best time ever for you because everybody—car rental, airlines, hotels—has all woken up to how big this space is and the need to have a program.”
— Marriott International’s Tammy Routh
Indeed, hotels and airlines are taking note of the power—and resilience—of the segment. So, what does this mean for SME travel buyers? Better bargaining power, for one thing.
“If you’re in [the SME] space, this is probably the best time ever for you because everybody—car rental, airlines, hotels—has all woken up to how big this space is and the need to have a program,” said Marriott International SVP global salesTammy Routh.
During a recent BTN webinar, Routh said the group is “still figuring out” its 2024 pricing but is keen to “lean deeper into partnerships and business relationships” to offer better value—this includes a dedicated program for SMEs.
“We are a little bit behind,” Routh admitted. “But we will have a program in the future that will make it very easy to do business with us. So, that is our greatest desire, to get this launched.”
In the meantime, she advised SME travel buyers to negotiate directly with hotels at the local level for top markets and then “ride” the Bonvoy program for all secondary markets “because if someone’s a member they’re going to get a discount,” she said.
Accor came to the table last January with its ‘Business Offer Auto-Enroll’ offer, which provides discounts of up to 9 percent as well as a “seamless” booking experience. The service also provides an automated contract process enabling customers to enroll after answering a few questions online.
Airlines also are revamping programs to better serve SMEs, with a focus on simplicity and flexibility. Lufthansa Group this summer updated its PartnerPlusBenefit program, which includes United Airlines.
Updates include a “more transparent” way to earn Benefit Points, which is now based on actual ticket price rather than travel class and route. Points also can be converted to sustainable aviation fuel. Additional “adjustments and simplifications” to the program will be introduced later this year.
In October, Delta will begin rolling out its new SkyMiles for Business program, which will supersede its current SkyBonus travel rewards program for small to midsize companies. The web-based tool allows users to book and manage travel and will feature new reporting and administrative capabilities and an easier way to track expenses, according to the airline There will also be greater flexibility for companies to move through different tiers within the program, as well as greater customization of available benefits.
“Even if [companies] don’t have a travel policy, these tools allow them to manage their travel, manage their spend and manage their employees better than they could yesterday,” said Delta senior vice president of global sales Bob Somers.
Somers said the move is part of the carrier’s larger strategy to “continuously listen” to customers and offer a travel solution “at any scale.”
Gant already has tools to support ‘light’ travel management. This includes its proprietary booking tool, Tripcircuit, which now wraps in New Distribution Capability content from American and United airlines.
Indeed, hotels and airlines are taking note of the power—and resilience—of the segment. So, what does this mean for SME travel buyers? Better bargaining power, for one thing.
“If you’re in [the SME] space, this is probably the best time ever for you because everybody—car rental, airlines, hotels—has all woken up to how big this space is and the need to have a program,” said Tammy Routh, SVP global sales for Marriott International.
During a recent BTN webinar, Routh said the group is “still figuring out” its 2024 pricing but is keen to “lean deeper into partnerships and business relationships” to offer better value—this includes a dedicated program for SMEs.
“We are a little bit behind,” Routh admitted. “But we will have a program in the future that will make it very easy to do business with us. So, that is our greatest desire, to get this launched.”
In the meantime, she advised SME travel buyers to negotiate directly with hotels at the local level for top markets and then “ride” the Bonvoy program for all secondary markets “because if someone’s a member they’re going to get a discount,” she said.
Accor came to the table last January with its ‘Business Offer Auto-Enroll’ offer, which provides discounts of up to 9 percent as well as a “seamless” booking experience. The service also provides an automated contract process enabling customers to enroll after answering a few questions online.
Airlines also are revamping programs to better serve SMEs, with a focus on simplicity and flexibility. Lufthansa Group this summer updated its PartnerPlusBenefit program, which includes United Airlines.
Updates include a “more transparent” way to earn Benefit Points, which is now based on actual ticket price rather than travel class and route. Points also can be converted to sustainable aviation fuel. Additional “adjustments and simplifications” to the program will be introduced later this year.
In October, Delta will begin rolling out its new SkyMiles for Business program, which will supersede its current SkyBonus travel rewards program for small to midsize companies. The web-based tool allows users to book and manage travel and will feature new reporting and administrative capabilities and an easier way to track expenses, according to the airline There will also be greater flexibility for companies to move through different tiers within the program, as well as greater customization of available benefits.
“Even if [companies] don’t have a travel policy, these tools allow them to manage their travel, manage their spend and manage their employees better than they could yesterday,” said Delta senior vice president of global sales Bob Somers.
Somers said the move is part of the carrier’s larger strategy to “continuously listen” to customers and offer a travel solution “at any scale.”
The fact that SME business for Delta is the carrier’s fastest-growing channel with higher yields and higher margins than larger corporate clients is also hard to ignore.
“If you look at that [SME] passenger recovery versus 2019, it’s 20 points higher than our larger corporate agreements. And in our SkyMiles account base, it’s 13 percent higher than it was in 2019,” Somers said.
“We’ve been putting incentives and resources towards this channel for a long time,” he added. “We’ve just stepped up our game because the game has stepped up. … We’ve invested tremendously into this channel, not just technology like SkyMiles for Business, but we’ve also invested in the human capital and resources, putting more sellers towards this channel, putting more tools and more policies and procedures.”
Delta isn’t the only carrier putting more resources into their SME strategy. American Airlines restructured its sales team in February to put more emphasis on the segment. It created a new division specifically for midmarket sales that will focus on uncontracted and non-managed business travel. The airline has yet to announce new programs specifically targeted to this business travel segment.
TMCs Offer Targeted Tools
Larger TMCs are sharpening their focus on the SME segment as well, and a series of strategic moves has led to the introduction of new products and services, often predicated on ease of use and easy integration. Several target the unmanaged business travel category and combine travel and expense management with traveler assistance as an ‘all-in-one’ solution.
In July, BCD Travel launched in the U.S. GetGoing, its digital platform for small and midsize clients. First launched in Germany last year, GetGoing provides a booking platform, a reporting tool, traveler safety information and policy automation capabilities as well as support from BCD experts on travel and booking assistance, budgeting and emergency support.
BCD Travel midmarket division president David Mitchell said the TMC “saw a gap in the market” to launch a proprietary, ‘turnkey’ offering because many existing solutions come with “lots of administration complexities” that can be cumbersome for small and midsize clients.
“What we’re trying to bridge into the market is something that has [self-service travel and expense] capabilities, but they don’t have to be overengineered,” he said.
GetGoing has three pricing tiers: ‘Go Free’, which includes BCD-negotiated and GetGoing-exclusive content as well as basic travel policy settings. ‘Go Travel’ has a $4.95 per trip fee and enables companies to load their own fares and rates and access unused ticket tracking software. The third tier will be made available in the first half of next year and will include an integrated expense module.
Mitchell, who oversees Acendas Travel, Adelman Travel Group and World Travel Service, said the group long has had its eye on the SME market, but noted that broader interest in the segment has recently increased as new business emerges.
“I think everybody sees this part of the market has a bright future,” he said. Referring to suppliers he added, “everybody wants to get in early and try to build a foundation with these groups of travelers and these companies… but it can be tough to tap this part of the market.”
American Express Global Business Travel in January restructured its entire business around a segment-driven model to intensify its focus on SMEs. The move followed a series of acquisitions in 2021 that GBT VP of global SME customers Maria Haggarty said has given the TMC the ability to “meet the core needs” of customers in this space.
This includes Egencia, the TMC’s “turnkey” solution that can be scaled globally, and Ovation Travel, which provides high-touch service. Combined with the group’s own Neo1 spend management tool for SMEs, Haggarty said the group’s broader strategy is to “meet customers where they are” by offering “the broadest and deepest set of solutions.”
Recent updates to Egencia include a new suite of APIs designed to make it easier for companies to share travel and expense data, and additional ground transportation options in the U.S. and Canada via an integration with GroundSpan.
“Continuing to evolve solutions over time is exciting, and rallying around the SME customer is powerful,” Haggarty added. “At the heart of our strategy is designing solutions around ease … and balancing tech versus human personalization.”
“If you look at that [SME] passenger recovery versus 2019, it’s 20 points higher than our larger corporate agreements.”
— Delta Air Lines’ Bob Somers
In its first-quarter earnings report, the TMC noted a 61 percent increase in SME transactions compared with the same period in 2022. In the 12 months prior, Amex GBT won $2.2 billion in annual business from SMEs, including 30 percent from organizations whose travel had been unmanaged.
“There’s a huge opportunity in the SME segment, particularly in unmanaged travel,” Haggarty said. “During Covid those travelers continued to travel because they were thinking about their business. ... They were out fighting for their businesses. I’m excited to see so much interest in enabling companies like this to grow because its critical to the overall economy.”
Meanwhile, CWT has turned to partnerships to enhance its SME offering and recently expanded its cooperation with Booking.com for Business to provide a travel booking platform with 24/7 agent support.
Booking.com for Business, powered by its partnership with travel tech supplier Serko, combines Booking.com lodging content with hotel, flight and car rental content from CWT. The content includes discounted business travel rates and membership rewards from third-party loyalty programs, according to CWT.
“When you put all that together—plus the fact that there’s zero subscription, booking, or travel support fees—it’s a very attractive proposition for small and medium-sized businesses that want a user-friendly and cost-effective travel solution without all the bells and whistles,” said CWT global market management VP Tammy Morgan.
Do SME Buyers Feel the Competition to Win their Business?
Recent proliferation of propriety and partnership-led booking tools means more choice for buyers—and more competition for the SME buyer.
“This is an extremely competitive market and there are new products, new players coming out all the time,” said Graeme Milne, head of corporation sales for the U.K., Ireland and Nordics at Amadeus Cytric Solutions.
“Reseller partners we work with offer a ‘menu’ of technologies. They want to give customers choice, and customers want choice,” he added.
This is driving innovation at Cytric, Milne said. A recent example is Cytric Easy, which allows users to search, book and share travel (and manage expenses) within Microsoft Teams.
Milne said Cytric Easy is “well suited” to SMEs, but there’s more work to do. “This is a market we are focused on; we’ll continue to develop products and offerings for it.”
Despite the hype, Palmetto Infusion’s Litt said she hasn’t received any extra attention from hotel or airline suppliers and still feels a “disconnect” with the big TMC players, with fears her account would be overlooked. She’s also wary of becoming too automated, given travel’s current complexities.
“I like to build relationships and talk to people,” she said, adding that she’s not looking for an anonymous set-it-and-forget-it solution. “I want a supplier that knows our business and knows our company because we’re here to serve patients that are chronically ill.”
The TMC that has piqued her interest most promises that the person who makes the sale will oversee the account management. “So, there’s never that disconnect between sales and ops,”Litt said, “and they have a vested interest in how you are using their product and services.”
In its first-quarter earnings report, the TMC noted a 61 percent increase in SME transactions compared with the same period in 2022. In the 12 months prior, Amex GBT won $2.2 billion in annual business from SMEs, including 30 percent from organizations whose travel had been unmanaged.
“There’s a huge opportunity in the SME segment, particularly in unmanaged travel,” Haggarty said. “During Covid those travelers continued to travel because they were thinking about their business. ... They were out fighting for their businesses. I’m excited to see so much interest in enabling companies like this to grow because its critical to the overall economy.”
Meanwhile, CWT has turned to partnerships to enhance its SME offering and recently expanded its cooperation with Booking.com for Business to provide a travel booking platform with 24/7 agent support.
Booking.com for Business, powered by its partnership with travel tech supplier Serko, combines Booking.com lodging content with hotel, flight and car rental content from CWT. The content includes discounted business travel rates and membership rewards from third-party loyalty programs, according to CWT.
“When you put all that together—plus the fact that there’s zero subscription, booking, or travel support fees—it’s a very attractive proposition for small and medium-sized businesses that want a user-friendly and cost-effective travel solution without all the bells and whistles,” said CWT global market management VP Tammy Morgan.
TMCs Offer Targeted Tools
Recent proliferation of propriety and partnership-led booking tools means more choice for buyers—and more competition for the SME buyer.
“This is an extremely competitive market and there are new products, new players coming out all the time,” said Graeme Milne, head of corporation sales for the U.K., Ireland and Nordics at Amadeus Cytric Solutions.
“Reseller partners we work with offer a ‘menu’ of technologies. They want to give customers choice, and customers want choice,” he added.
This is driving innovation at Cytric, Milne said. A recent example is Cytric Easy, which allows users to search, book and share travel (and manage expenses) within Microsoft Teams.
Milne said Cytric Easy is “well suited” to SMEs, but there’s more work to do. “This is a market we are focused on; we’ll continue to develop products and offerings for it.”
Despite the hype, Palmetto Infusion’s Litt said she hasn’t received any extra attention from hotel or airline suppliers and still feels a “disconnect” with the big TMC players, with fears her account would be overlooked. She’s also wary of becoming too automated, given travel’s current complexities.
“I like to build relationships and talk to people,” she said, adding that she’s not looking for an anonymous set-it-and-forget-it solution. “I want a supplier that knows our business and knows our company because we’re here to serve patients that are chronically ill.”
The TMC that has piqued her interest most promises that the person who makes the sale will oversee the account management. “So, there’s never that disconnect between sales and ops,”Litt said, “and they have a vested interest in how you are using their product and services.”
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