Font Size

- Aa +

Wed 10 Dec 2008 04:00 AM

Font Size

- Aa +

Corporate connoisseurs

Specialist meetings agencies are taking business from smaller travel agencies by offering services rather than just tickets.

Specialist meetings agencies are taking business from smaller travel agencies by offering services rather than just tickets.

Travel agencies and travel management companies (TMCs) that specialise in corporate and meetings related travel are having such an impact on the market that generic travel agents are witnessing a downturn in business from the corporate sector.

Agencies wishing to compete are being forced to provide dedicated corporate teams or risk losing more business to the specialists.

And according to managing director of corporate travel specialists Dream Horizons, C.P Ranjith, it is a trend that hasn't gone unnoticed with "more and more companies specialising for corporate groups".

"Business used to be with the travel agencies, but more companies here and in India are depending on companies like us," he said.

It would appear the lure of the corporate connoisseur comes in many guises for the corporates moving away from smaller generic travel agencies.

However, the shift towards using corporate specialists can be explained by their knowledge of the destinations and their inherent understanding of the specific requirements of the corporate traveller.

"We are not a leisure company at all - we are totally dedicated to the corporate market so we have been increasing our clientele," Ranjith said.

And as Ranjith explained, another advantage for companies using dedicated corporate travel agencies was having one point of contact for a trip.

"We have account managers who give a 24/7 service from the time groups arrive to the time they leave and more and more companies are wanting someone like us in their fold.

"With one click of a button they can transfer all the difficulties of getting the right hotel or transfers to us. It becomes our headache and responsibility not theirs," he added.

V Kishore, assistant sales manager of Kanoo Travel in Dubai Investment Park, Jebel Ali, acknowledged the "stiff competition" from the specialists.

"The specialists are a serious threat because it is the only area they work on so they have more of a chance to corner the market," he said.

But the shift towards companies such as Dream Horizons has not been taken lying down by the larger TMCs.

"We have come up with a dedicated meetings and incentive team in response," Kishore said.

"Having a specific team coupled with our high standards gives us a good platform to compete with these new agencies.

"Corporates are increasingly looking at the service levels they receive and they want to work with professional consultants with sophisticated travel policies. They really want agencies with knowledge so that is really positive for us because it's something we can definitely sell ourselves on," he added.

And specialisation appears to be paying dividends for TMCs that jump on board the specialisation bandwagon.

General manager commercial for Kanoo Travel, Roland Bunge said that one client was witnessing so much meetings and events business that it asked to have a dedicated Kanoo representative in-house to deal with the specialised volume of work."You might, for example, want to go on an incentive trip to Egypt so we would engage our trusted partner on your behalf in Egypt and that adds to the relationship," he said.

But the number of companies who are able to deal with large corporate accounts in the region are minimal, according to director procurement & facilities for Siemens LLC Tobias Mueller-Roden.

"Siemens conducted an extensive market survey," he said.

"We were dealing with travel agents, but we wanted a partner in the Gulf so we looked at our expectations, processes and how Siemens travel policies would be complied with and we wanted people who had global expertise," he added.

Mueller-Roden said in the US the survey would have highlighted a large number of companies that would satisfy the company's requirements, but in the Middle East there were only two, with Kanoo Travel winning the contract.

And the reason for using a specialised TMC was not about "taking money off Kanoo" Mueller-Roden explained.

"I just want to make sure that my travel is operated properly and that is where the TMC is the ally of the buyer in enforcing a travel policy," he added.

"If my employees shop around, we have no control and we are wasting money."

Mueller-Roden added that only if he knew the true cost of the company's travel could he establish its impact on the business.

"And from a buyers perspective if something goes wrong you can shake one partner," he added.

Trust

At the centre of the partnership between Kanoo Travel and Siemens LLC was trust and a transparent relationship, according to both parties.

"It's about being frank and having a transparent open book," Bunge said.

"Any client of ours can have a look at its figures in our accounting system and it can be audited," he added.

Mueller-Roden agreed and said, "transparency is key".

An industry trend that had aided transparency was the continuing move towards a commission-free environment. Bunge stated that the smaller agencies were "grappling with the issue of charging service fees" and that a commission-free environment created a "level playing field".

"Buyers are left wondering what is happening to the commission. The smaller travel agents don't like it as it is far easier to rake off the commission of 5 or 7% of the airline and not go and sell a service."

There were also added extras to consider when dealing with a TMC.

Bunge explained that security was a real issue and as a TMC it was expected to provide pre-trip information.

"So we feed the information, the buyers can access this information to see where any of its travellers are in the world. This is true live information," Bunge said.

But companies do not solely benefit from using a TMC for their corporate travel, Mueller-Roden commented he tried to push all the companies incentive travel through the TMC.

"They have the best visibility in the market and may have the better hotel rates, purchasing power with the airlines then I want to have it in my reporting and I don't want to waste the resources of the people organising these types of events."

For all the latest travel news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.