If you've worked with a TMC, you know they can help you streamline booking flights, hotels, and everything in between.
But, like everything else in business, their services come with a price tag. Understanding the fees and, more importantly, the added value you’re receiving can make a big difference to your bottom line and processes.
This guide will help you understand what you can expect to pay when working with a TMC and give you a few savings tips. Because when it comes to business travel, being informed is your best strategy for staying ahead of rising costs.
How much could a TMC actually save you?
Use our travel savings calculator to estimate your current travel spend and uncover the potential savings and value of working with a travel management company.
What is a travel management company (TMC)?
A TMC is your go-to partner for handling all business travel. Imagine having someone book your flights and hotels while ensuring everything runs smoothly. That's what a TMC does.
Here's what they typically cover:
- Booking flights, hotels, and transportation: TMCs take the stress out of finding the best deals, including corporate hotel rates, so you can focus on more important things, like your meeting agenda.
- Expense management: TMCs offer tools and services to help you manage your travel expenses and stay within budget.
- 24/7 support: Whether you need to change a midnight flight or make a last-minute hotel booking, they're available around the clock.
- Policy compliance: They ensure every booking aligns with your company's travel policy, helping you avoid unnecessary costs.
- Reporting and visibility: Want to know how much you're spending on travel or where your travelers are? A TMC gives you the insights you need to keep everything in check.
- Safety and risk management: They don't just book your trips. They also monitor global events to ensure your team's safety.
But that's not all. The real magic of a TMC lies in their ability to save you time and money. With their strong industry connections, the right TMC can unlock exclusive rates unavailable to the general public. Whether it's a discount on your hotel stay or a deal on a rental car, they've got the clout to negotiate prices that optimize your travel budget.
And let's not forget about their global buying power. Because TMCs manage travel for so many clients, they can secure bulk corporate travel discounts you'd never get otherwise. Partnering with a TMC like Corporate Traveler could help you save anywhere from 5% to 50% on your travel spend. That money stays in your pocket, ready to be invested into your business.
Plus, a TMC makes sure that your travel program is strategic. Keeping everything centralized and under control gives you visibility into your travel spend, helps you stay compliant with your policies, and ensures your travelers are safe and supported wherever they go.
So, while TMC fees might seem like an extra cost, they provide immense value. When you consider the savings, peace of mind, and convenience they offer, a good TMC is clear that it's worth every penny.
Types of fees charged by TMCs
Understanding TMCs' fees is critical to getting the best value for your money. While these might seem like just another line item on your business travel budget, knowing what you're paying for, and why, can help you maximize the benefits your TMC offers.
Let's break it down:
1. Service fees
Every time you book a flight, reserve a hotel room, or rent a car, there's a service fee. Think of it as paying for the convenience of having someone else handle all the nitty-gritty details of your travel plans.
- Booking fees: Whether it's a plane ticket, a hotel room, or a rental car, each booking typically comes with a fee. This is what you're paying for: TMCs' expertise in finding the best deals and ensuring everything is booked correctly and efficiently.
- Transaction fees: These are often small fees that apply to each transaction or booking, covering the administrative costs of processing your reservations.
2. Management fees
If you're looking for more than just booking services, say, someone to manage your entire travel program, this is where management fees come into play.
- Monthly or annual management fees: Some TMCs charge a regular fee for their ongoing management services. This could cover everything from policy compliance to travel strategy development.
- Account management fees: If your TMC provides a dedicated travel manager who handles your travel needs, this personalized service might come with a fee.
3. Additional fees
Beyond the basics, a few extra fees can apply depending on your needs and the level of service you require.
- After-hours service fees: Travel doesn't always happen during business hours, and neither do travel emergencies. If you need support outside the usual 9-to-5, there might be a fee for after-hours assistance.
- Change and cancelation fees: Plans change, and sometimes you need to cancel or modify a booking. TMCs often charge fees to handle these adjustments, saving you the headache of navigating change policies yourself.
- Data reporting and analysis fees: Some TMCs charge for this extra service layer if you want detailed reports on your travel spend or insights into optimizing your travel program.
Understanding these fees is crucial in assessing whether your TMC delivers value for money. While they might seem like small charges, they can add up—and it's essential to get clear on what you’re paying for from the get-go.
The good news? With the right TMC, they’ll provide transparency of your fees, and the savings and convenience you gain generally outweigh the costs.
Factors influencing TMC fees
The truth is that TMC fees can vary quite a bit, depending on several key factors. Let's break it down in a way that makes sense so you can see where your investment is going.
1) Size and scope of services
One of the most significant factors that influence travel management fees is the size and scope of the services they provide you. The more customized and expansive your needs, the more time and resources they'll invest to create the perfect fit for you.
Here's how it plays out:
- How customized is your travel program?
- How much travel are we talking about?
If your company needs a highly personalized travel program complete with tailored policies, special travel arrangements, and unique reporting needs—this customization will naturally come with a higher price tag. It also means you're getting a service designed specifically for you.
Simply put, the more travel your company does, the more work your TMC has to handle. Whether it's managing hundreds of flights, coordinating group travel, or handling complex itineraries, the volume of travel can significantly influence the fees. But don't forget, higher volumes can also mean more savings opportunities, as TMCs often secure better deals for frequent travelers.
2) Technology and tools
TMC fees also depend on the technology and tools they offer, and advanced tech can make travel management way more streamlined.
- What booking tools are in play?
- How well does everything integrate with your systems?
The best TMCs use sophisticated booking tools that make the process faster and ensure you're getting the best deals. These tools can automatically apply your company's travel policies, flag any out-of-policy bookings, and even offer recommendations based on past preferences. Advanced tools mean smoother, more efficient bookings. And yes, that tech investment is reflected in the fees.
Seamless integration with your company's existing systems (like HR or expense management software) can make travel management a breeze. However, developing and maintaining these integrations takes time and expertise, which can contribute to the overall cost.
3) Level of support
Finally, the level of support you receive from your TMC is a significant factor in the fee structure. After all, you're not just paying for a service but for peace of mind.
- Is support available around the clock?
- Do you have a dedicated account manager?
When travel emergencies strike, you need someone you can call, day or night. Travel management companies that offer round-the-clock support ensure that no matter where your travelers are, help is always just a phone call away. This kind of comprehensive support is invaluable, but it's also one of the reasons fees might be higher.
A dedicated account manager who knows your business inside and out can make all the difference. They're your go-to person for everything from booking advice to handling complex travel arrangements. This personalized service ensures your travel program runs smoothly, but having a dedicated pro on your side does come with a cost.
Understanding these factors can help you see why TMC fees are structured the way they are—and, more importantly, how those fees translate into value for your business. When you consider the time saved, the headaches avoided, and the money that can be saved through expert management, TMCs offer a lot more than just booking services.
Common TMC pricing models
TMCs charge for their services in various ways. Instead of a common standard, you'll find a few pricing models that cater to different business needs and travel patterns.
Let's break them down.
1) Flat fee model
The flat fee model is pretty straightforward. Here, you're charged a set amount per booked trip, regardless of how complicated the trip is. It's simple and predictable, no surprises, just a consistent fee every time you book. This can be particularly useful if your travel is relatively uniform or you value knowing what you'll pay each time.
2) Transaction fee model
The transaction fee model is like a pay-as-you-go approach. Every time you make a flight, hotel, or car rental booking, there's a fee attached. This model is great if your travel is a bit more sporadic or you only want to pay for what you use. It's flexible and allows you to control costs by managing the number of transactions.
3) Subscription models
Like your favorite streaming service, the subscription model involves a monthly, quarterly, or annual fee. This fee grants you access to the TMC's services for a set number of users. This model is ideal if you have a steady flow of travel bookings and want to keep things simple with one predictable payment.
Ultimately, the suitable pricing model depends on your business's operation and what you need from your TMC. Whether you prefer the predictability of a flat fee, the flexibility of transaction fees, or the all-inclusive vibe of a subscription, there's a model out there that'll fit your travel program like a glove.
How to evaluate and compare TMC fees
When picking the right TMC, you want to get the most bang for your buck. But how do you know if you're comparing apples to apples?
Let's dive into how to evaluate and compare TMC fees so you can confidently choose.
1. Request for proposal (RFP)
Let's start with the Request for Proposal (RFP). This might sound like a lot of paperwork, but think of it as creating your personalized roadmap to finding the perfect TMC match. It's your way of laying out precisely what you need and seeing who's up to the challenge.
Here's how to get it right:
- What to include in an RFP
- How to compare proposals effectively
First, get your teams involved—HR, Finance, Tech—everyone who has a stake in ensuring your travel program runs smoothly. The idea is to cover all your bases so the TMC you choose can meet the needs of your entire company. Don't forget to consider cultural fit. After all, you want a TMC that aligns with your company's values and work style.
Once you've got a few potential partners lined up, it's time to really get to know them. Set up demos, have some deep-dive discovery calls, and maybe even meet face-to-face. This isn't just their chance to impress you; it's also your opportunity to see how well they understand your needs.
When comparing proposals, don't just look at the price. Think about the quality of service, the technology they bring to corporate travel planning, and how much they can save you in the long run.
Creating a solid RFP is about more than finding the cheapest option. It's about finding a TMC that delivers real value, fits seamlessly with your business, and supports your goals.
2. Do a cost vs. value analysis
When comparing TMC fees, it's easy to get caught up in the numbers. But don't just look at the cost, think about the value you're getting in return. A lower fee might sound appealing, but if the service quality drops or you're not getting the savings you expected, is it really worth it?
Take Bumble, for example. They're a fast-moving tech company that needed a TMC to keep up with their pace. When they partnered with Corporate Traveler, it wasn't just about booking flights and hotels – it was about getting proactive service that matched their growth. And guess what? They experienced massive savings while enjoying a seamless travel program.
Corporate Traveler's Client Savings & Value Team knows how to make every dollar count. Last year alone, we saved our US customers over $1.4 million by finding cheaper fares, tracking expiring credits, and securing upgrades at no extra cost.
Here's a snapshot of those savings:
- $496,648 through creative ticketing
- $463,625 by tracking expiring credits
- $251,321 by switching to different airlines/routes
- $192,088 by securing upgrades and perks
When evaluating TMC fees, it's crucial to balance cost with value. Look beyond the price tag and consider the potential corporate travel savings and efficiencies the right TMC can bring to your business. A great travel management company doesn't just manage your travel, they optimize it, turning every dollar spent into a wiser investment.
Always remember: the best TMC isn't the one that charges the least; it's the one that brings the most value to your travel program.
Tips for reducing TMC fees
Saving on TMC fees doesn't have to be complicated. Here are some straightforward tips to help you cut costs without compromising service.
1. Leverage technology
Technology is your best friend when saving money on travel management.
- Start with an online booking tool (OBT). An OBT simplifies corporate flight booking and helps travelers or travel bookers search, book, and manage all business travel in one convenient place. The best OBTs personalize your experience, showing you the most relevant, in-policy, and best-priced options every time you book. An OBT simplifies itinerary changes, cancelations, and air credit management, making the process smoother and more efficient. Plus, by choosing to self-book on straightforward itineraries, you’ll cut back on service fees significantly.
- But that's just the beginning. A good reporting tool lets you see your travel spend and booking behaviors. This insight helps you spot trends, identify savings opportunities, and ensure compliance with your travel policy.
Want a platform that does both? Check out Melon. Designed to help SMEs book quickly and easily, Melon is more than just a booking tool. It's an all-in-one travel management software that gives you complete visibility of your travel program.
Melon's top features can save your business time and money.
- Melon remembers traveler preferences and past bookings. It's easy to input frequent flyer numbers and memberships for point collection. Plus, Melon's chat function provides 24/7 support from real people.
- Melon's Advanced Flight Search lets you shop for different airlines in one place, helping you find cost savings on multi-stop itineraries. Melon also combines rates from multiple sources, offering a mix of carriers and greater flexibility. It eliminates the need to navigate multiple tabs and puts everything in one place, saving you time and money.
- Melon drives policy compliance by flagging non-compliant bookings and helps manage air travel credits to avoid expired tickets. It also generates a recommended spend based on live prices and availability, which can be adjusted for different roles or departments.
The more bookings your business makes with Melon, the more you save on booking fees. With a user-friendly interface and simplified approval process, Melon ensures a smooth booking experience.
Want to see how Melon can transform your travel management?
2. Insist on transparency with TMCs
Be direct about asking for full transparency on pricing and what each tier or model includes. Discuss your travel volume and specific needs. Find a pricing model that works for both parties. Finally, ensures you fully understand what is included and what savings you can realize by handling some tasks yourself.
3. Consolidate services: One TMC for all your needs
If you're working with multiple travel providers, it might be time to streamline. Consolidating all your travel management under one TMC can lead to significant volume discounts. Managing your travel program becomes much simpler with a single point of contact.
When you consolidate with a TMC like Corporate Traveler, you get great rates, a dedicated travel consultant, and a customer success manager. Plus, with 24/7 support, your travelers are never left hanging, no matter where they are.
Centralizing your travel program can save your company thousands of dollars each year and give you back valuable time and energy. With the right partner by your side, managing travel doesn't have to be a hassle—it can be a streamlined, cost-effective process that supports your business goals.
Let’s sum it all up
We've covered a lot, so let's recap:
- TMC fees: From service fees to management and those pesky after-hours charges, knowing what you're paying for is essential.
- Pricing models: Whether flat fees, transaction fees, or a subscription, pick the model that fits your business like a glove.
- Saving tips: Use tech to your advantage, get full transparency on pricing packages, and consolidate your services under one TMC for volume discounts.
Time to check your TMC setup
Now that you're in the know, it's the perfect time to take a closer look at your current TMC setup. Are you getting the value you deserve? There's always room to optimize business travel costs and ensure your travel program runs as smoothly—and affordably—as possible.
Managing travel expenses goes beyond cutting costs. You want to build a transparent and strategic partnership with your TMC. The right partner won't just help you save money—they'll make your business travel smarter.
Ready to take the next step? We're here to help you maximize your travel budget and ensure the success of every trip.