Global Market Outlook on Travel Management Companies

End-to-End Services/Role of TMCs

TMCs offer vendor sourcing management solutions, where they help the buyer’s organisation during the negotiation process to determine if the buyer gets the right discounts.

A strong internal travel management team might not require the support of the external TMC in the vendor management process.

Vendor Sourcing Management


  • Airline contract/proposal analysis and evaluation
  • RFP process/supplier sourcing
  • Airline fare benchmarking
  • Airline deal performance reporting


  • RFP process/supplier sourcing
  • Hotel rate analysis and benchmarking
  • Hotel rate audit
  • Online hotel rate directory
  • Hotel compliance reporting

Car Rentals

  • RFP process/supplier sourcing
  • Car rental contract/proposal analysis, evaluation, and benchmarking

Other Travel

  • RFP process/supplier sourcing
  • Contract/proposal analysis, evaluation, and benchmarking

Preferred Engagement Model

Large companies engage with one or two TMCs globally. When the focus is on a specific region, it is recommended to engage with a single TMC across the region.

Global/regional consolidation with a single TMC model is being increasingly adopted by large organisations, which is driven by a combination of benefits, such as having consolidated data and effective administration, easy tracking of travellers and easier implementation of travel policy.

  • Widely adopted: A single TMC supplier model is adopted by 46 percent of organisations, as it provides a clear visibility over spend and in implementation of policies
  • A multiple supplier engagement model is preferred when:
    • Organizations have presence in a niche and specific region
    • Merger and acquisition of organisations

Single Supplier

This is the fastest growing and widely adopted model by large organisations.

  • A global TMC will work with local partners in some specific countries


  • Accountability, high negotiation power
  • Easier travel policy administration and compliance
  • Data consolidation and consistency


  • This may not be suitable for a local market
  • There might be difference in data reporting

Examples: Johnson & Johnson (American Express), HP (CWT), Pfizer (BCD)

Multiple Suppliers

Some organizations engage with a global TMC, along with a combination of a local supplier, specific to certain countries.


  • Some companies have a TMC for each region and a lead TMC to manage the regional TMCs, as they have better local knowledge


  • Difficulty in data aggregation across TMCs

Examples: Sanofi, Deutsche Bank, Transocean, Fidelity Investments, GSK

Preferred Pricing model

Transaction fee is the widely adopted fee model, with an adoption rate of 90 percent by Fortune 500 companies. The unbundled transaction fee is popular among the corporates, as it provides complete transparency over pricing and the travel spend data is available by each type of transaction.

Companies can companies adopt a transaction fee pricing model as there is high transparency, since the fee is broken down by each component

Transaction Fee

  • A fee levied by TMCs for each transaction (i.e., for every single action or operation, which is performed to achieve the booking) to cover operational costs and includes a profit margin. There are two types of transaction fees:
  • Unbundled: This involves breaking down the fee into each component
  • Bundled: The fee per transaction includes the transaction cost plus the cost of all other services bundled into one
  • In this model, the commission or rebate is usually retained by the TMC

Management Fee

  • This is a single bundled fee paid to the TMC, which covers all travel services, regardless of the number of transactions for a fixed period, say a month or a year
  • It is generally rendered when the company’s employees perform the transaction themselves; and the TMC is only managing the reporting, etc., hence the agent fee is excluded here
  • This model is rarely used by large corporates, citing reasons of non-transparency into pricing
  • In this model, the commission or rebate is usually returned by TMC to the buyer organization

Typically, the best practice of pricing TMC is through unbundled transaction fee, and the adoption level of the unbundled transaction fee is higher compared to management fee.

The adoption of the transaction fee(unbundled model) would increase the visibility to spend, the TMCs to transfer income, in the form of commissions, back to the buyer and the TMC fees cannot be determined in advance because of its dependence on the transaction volume