A new benchmarking report has shed light on which European corporations are paying the highest travel management fees, based on where they are headquartered. In the follwoing guest post, David Chapple explains some of the differencies and the the reasons behind.
The report from Business Travel iQ shows businesses in the UK and Ireland have the roughest deal, paying the most for online air bookings particularly long-haul and low-cost flights. They are charged more for online touched bookings, while also paying the third highest offline fees in Europe.
French travel managers have a more mixed fee structure, the report has found, paying the lowest in Europe for touched and touchless online bookings but the highest for offline overall especially long-haul flights.
Elsewhere in Europe, travel managers in the Netherlands pay the highest offline fees for low-cost carriers while those based in Spain pay the lowest offline fees generally. Finnish-based corporations are charged the most for touched online bookings.
Below is just one of 40 charts in the report which split the data into factors such as travel volumes, travel profile, geography, air, accommodation and rail. This one makes it easier to compare the fees mentioned above.
Why do the fees vary so much around Europe?
Netherlands-based Marijke Poppink, EMEA Travel Manager, Global Procurement at Reed Elsevier explained: “There are many reasons why TMCs charge such wildly inconsistent fees: labour costs, different business models, whether they are wholly-owned or franchise offices, which tools they use, their level of local knowledge and whether clients in that territory are more predisposed to using OBTs as is the case in northern Europe.”
She added that a lack of competition can also encourage higher prices or sometimes TMCs charge more just because they think they can. Her advice? “Buyers need to flex their muscles and negotiate harder.”
A mysterious figure
Interestingly, nearly a fifth (18%) of European travel managers and procurement professionals simply don’t know what percentage of their travel spend is allocated to TMC fees. For the others that do, the fees usually make up less than 6% of travel spend, with only 7% saying it costs more than this. More than half (54%) claim fees represent 4% or less of travel spend, while 21% put the figure between 4-6%.
Download the executive summary of the report here
David Chapple, Business Travel IQ
Unfortunately Switzerland and Germany are not shown in the graph above. The detailed study includes a lot more details though and can be ordered from Business Travel IQ.
Adrian Matt for travelBrain
