Shape of TMCs – Creative Changes For Efficient Travel Businesses

Post-pandemic, the shape of TMCs (Travel Management Companies), is set for major change. The International Air Transport Association (IATA) forecast for Travel in 2021 is 52% of 2019 levels. The estimate for 2022 is 88% of 2019. Only by the end of 2023 will it be 105% of 2019 levels. The demand for Air Travel in June 2021 was just 60.1% compared to June 2019. 

The Shape of TMCs - Post Pandemic Scenario
IATA Estimate – The Covid-19 Scenario

The revised estimate for travel in 2030 is 7% lower than former pre-Covid-19 estimates. All of this is of course, Travel in general. We all know that Corporate Travel has been affected more than travel in general.

The prognosis, therefore, for back-to-normal when comes to Air Travel, is not very good. When corporate travel eventually comes back, there will be a new normal. There will be no going back to the old normal. 

IATA Statistics

When we review 2020 against 2019, the figures are shocking. Let me illustrate with some of the latest IATA figures available:

  • 1.8 billion passengers flew in 2020, a decrease of 60.2% compared to the 4.5 billion who flew in 2019
  • Industry-wide air travel demand (measured in revenue passenger-kilometers, or RPKs) dropped by 65.9% year-on-year
  • International passenger demand (RPKs) decreased by 75.6% compared to the year prior
  • Domestic air passenger demand (RPKs) dropped by 48.8% compared to 2019
  • Air connectivity declined by more than half in 2020 with the number of routes connecting airports falling dramatically at the outset of the crisis and was down more than 60% year-on-year in April 2020
  • Total industry passenger revenues fell by 69% to $189 billion in 2020, and net losses were $126.4 billion in total
  • The decline in air passengers transported in 2020 was the largest recorded since global RPKs started being tracked around 1950

(Source: IATA Press Release dated 03 Aug 2021)

“At the depth of the crisis in April 2020, 66% of the world’s commercial air transport fleet was grounded as governments closed borders or imposed strict quarantines. A million jobs disappeared. And industry losses for the year totalled $126 billion.”

Willie Walsh, Director General – IATA

“2020 was a year that we’d all like to forget. But analyzing the performance statistics for the year reveals an amazing story of perseverance. At the depth of the crisis in April 2020, 66% of the world’s commercial air transport fleet was grounded as governments closed borders or imposed strict quarantines. A million jobs disappeared. And industry losses for the year totalled $126 billion. Many governments recognized aviation’s critical contributions and provided financial lifelines and other forms of support. But it was the rapid actions by airlines and the commitment of our people that saw the airline industry through the most difficult year in its history,” said Willie Walsh, IATA’s Director General. 

It will be a long time before Travel Management Companies (TMC) see corporates returning to the 2019 level of Business Travel. How then, will TMCs reconfigure the Post Pandemic service configuration?

Reduction of Staffing Levels – New Shape of TMCs

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Deserted Airports

It goes without saying that most Corporate Travel companies should have reduced their staffing by at least 50% when compared to 2019 levels. Talking about Corporate Travel Services in the Arabian Gulf (an area I know well), the service configuration for clients and their pricing policies will have to change dramatically. Left to me, I would completely reconfigure the entire service.

TMCs versus Larger Travel Agents

In my opinion, larger run-of-the-mill Travel Agents can no longer handle multinational companies. That segment belongs to the TMCs. Local agencies usually will not have the IT horsepower to compete with the global TMCs. 

Companies today, need their travel services vendor to demonstrate major technology capabilities before they can entrust their Travel account to a TMC. A local large Travel Agent does not also have the global reach needed to consolidate Corporate Travel for multinational companies. Such capabilities are an absolute must-have, to handle a global account across several countries. 

Mechanisation of Processes

To reduce man power costs in Travel Operations (I refer to the Reservations and Ticketing area of the Business), It is imperative that more mechanisation of booking processes will have to come into play. 

For those clients who wish to pay bottom dollars for a Corporate Travel service, Self Booking Tools (SBT) will have to be implemented across the board. There will be no more luxury of a personalised service for clients who only want to pay minimal prices. SBTs with or without Self Ticketing could be discussed in the pricing dialogue

To make to whole process more efficient, Traveller Booking Profiles will have to be completed by the traveller or his Company. As the process moves to the TMC, the company’s Travel Policy will need to automatically come into play. It is the document that states who travels in what class, which airlines and hotels are the preferred choice of the company. Read my post on how to write an effective Company Travel Policy here. This should be automated as well and integrated into the booking system. 

Those TMCs that do not already have the facility, will have to rapidly work with their technology service providers to make it possible for clients to upload all their traveller data and preferences onto the system through an online portal. 

The New Shape of TMCs – Configuration of Travel Operations

The configuration of Travel Operations will largely depend on client service pricing. It is important for the TMC to know exactly how much a client is costing them. 

The shape of TMCs - Post Covid-19
Balancing Time and Revenues

TMCs in the Arabian Gulf have been known to guesstimate their costs. They do not have the technical systems to measure the work hours spent on servicing a particular client. That will have to change if they wish to make predictable profits in their businesses.

They will have to implement or create software that can measure time spent on each booking. It will also help in accurate assessment of the skills of operational staff.

On the clients’ part, they should be prepared to pay for the services they want. There cannot be any more free lunches.

Booking, Ordering Transportation And Billing

The whole process of booking and ordering transportation must also be automated. Travellers must be able to do it by themselves. Corporate clients must have access to the right systems through the SBT. They would be able to view what is available and book all their requirements. 

At that point, their requirement should automatically be pulled into a form for internal in-company approvals. This will then at the push of a button, either be ticketed or be transferred to the TMC for expert handling. The same form should then be transferred to the back office for billing processes. This way the whole travel ordering process will become seamless and cost effective for everyone involved.

The Important Subject of Pricing

The revision of Travel service pricing will have to be done. Bundled Pricing will have to be brought into every TMCs offering. By that I mean the bundling of the booking services: Air ticket, hotel, car booking, transfers etc. 

If all traveller reservations are made at the time of booking, it would cost a certain fee. If they were booked in bits and pieces, it would cost the client more. In the Gulf, only the most advanced TMCs offered Bundled Pricing. Others did not. 

In the end, the TMC will have to make a profit on the services they offer. Clients can no longer tell their TMC, “Go screw someone else for your profit.” It will not fly. They will have to pay their TMCs for the time spent on their account at a negotiated Service Fee. The handling of fees will have to be automated and work in sync with the booking engines used for handling corporate travel.

Client Account Management

Another luxury I would cut straight away would be Client Account Management Services for any travel account that is not worth at least USD 1 Million per annum.  What services were provided by Client Account Managers (CAM) for clients below $1M, can easily be handled by Operations Supervisors over the telephone. 

Shape of TMCs - Post Pandemic Scenario
Greater Use of Video Conferencing

For larger accounts within the $1M threshold, Supervisors should be able to conduct an annual online review using anyone of the Video Conferencing platforms that are available. This should enable any TMC to cut their CAM staffing by 50 to 60% (I am again referring to Gulf companies). CAMs can work from home. They probably will only need to come into the office for weekly meetings or to discuss the service implementation of a client. This will help TMCs save on real estate or rental costs.

Implementation Of The Travel Service For A Client

The implementation of travel services is an often neglected function among Travel companies in the Gulf. It will have to be well planned by the CAM or Operations Supervisor who will be in charge. It needs to be in perfect sync with the client’s Travel Policy.

When I was in charge of businesses in the Gulf, we executed it through simple Gantt Charts. It really needs faultless coordination on the part for the CAM. Everything must function like clockwork. On time, and delivered at a higher level than a client’s normal expectation.

TMCs Sales Team

You will have noticed that I have not mentioned the Sales team till now. Sales Teams always pay themselves by bringing in new and profitable accounts. I would however carefully review the productivity of the Sales team and decide on who stays and who goes. 

For those you would retain, I would recommend a base salary for bringing in an agreed amount of sales each month. Anything above that will go into a process by which they could be paid more and more according to a pre-agreed scale. The more sales they bring in, the higher will be their monthly income. 

Of course, it goes without saying that all their earnings will be adjusted to only business actually transacted. They could also work from home and come into the office only for meetings they need to participate in.

Back-Office Functions

All back Office functions like billing and reporting can easily be automated these days. There are major Global Distribution System (GDS) companies already offering such products. Of course these will have to be carefully negotiated on a per transaction basis. Agencies no longer need a small army in the back office. Most of their functions can be automated.

Diversification of Service Portfolios

TMCs must diversify their portfolios of services. They must offer value added products like VAT Recovery and other Travel related services. This will help bring in additional incomes however small they may be. All income will eventually add up

Who Will Coordinate The Whole Process?

The need of the hour is to automate the complete process, starting with the client ordering in compliance with their Company Travel Policy, their own internal approval processes right through to the TMC reporting their Travel to them. This may even bring in Pre-trip reporting

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The Answer Lies In Technology Solutions

In between all that lies the SBT or ordering to the TC, the actual ticketing process, the TMC report to the Billing Settlement Plan (BSP), data being captured at the back office and rolling in their reporting process to the client. Eventually the CRM will have to manage the whole situation and demonstrate to the client that the TMC is actually saving money for the client and delivering all the travel they budgeted for.

Only a person with a good working knowledge of all the systems and processes can coordinate the coming together of technologies working with a talented Information Technology specialist. This is a specialised job.


We are not yet through with the Covid-19 Pandemic; the Delta Variant rages in many parts of the world and threatens to spread to all countries. These are difficult times that all industries are going through. The Travel Industry has been very badly hit. 

It however is a good opportunity to rationalise on all operating costs. It is a good time to go away for ever from the tentacles of legacy systems that will be of no use in the near future. The situation calls for stringent reviews and studies that relate to staffing, productivity and retention. Please click here to read my article on post covid-19 restructuring of TMCs. Only the very best needs to stay in the business. Would you handle the situation any differently? Please let me know in the Comments Box below.

Post Covid Situation – TMCs FAQs

What is the air passenger forecast for 2021 for the Air Transport Industry?

The International Air Transport Association (IATA) estimates that the volume of air travel in 2021 will be 52% as compared to the pre Covid-19 travel volumes of 2019. 

What is the air passenger forecast for 2022 for the Air Transport Industry?

The International Air Transport Association (IATA) estimates that the volume of air travel in 2022 will be 88% as compared to the pre Covid-19 travel volumes of 2019.

What is a Self Booking Tool

A Self Booking Tool is an online, air travel, hotel and other transportation reservation booking tool that a Travel Management Company provides the travellers of its clientele to book their own travel. It is configured for travellers in accordance with the Travel Policy of the Company in co-operation with the Global Distribution Company involved.

What is Bundled Pricing in the language of Corporate Travel Management Companies?

Bundled Pricing is the facility by which business entities can lower the price they pay for their Travel services by bundling their requirements into one request at the time of booking Travel services. It often contains booking requests for flights, hotel rooms and car rental or airport transfers.

What is Travel Operations?

Travel Operations is the term used in the travel business that refers to the section of their company that handles Travel reservations and bookings.

© Mano Chandra Dhas

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  1. Rajeev Tamhane


    This is excellent report Mano. Extremely useful at all levels. It can be reference material for management projects.

  2. Kenneth D'Souza


    Mano this is very detailed and an excellent report of the current market conditions. With this Delta variant things are changing by the day. Travel Managers will need to be extremely well prepared of what is to come and the ever changing rules like mixed vaccines,vaccine passports and other travel restrictions that each country may impose.One has to be prepared and like I said a iron clad travel policy has to be in place to protect the employees and the employer.
    Well written once again and keep them coming.

    • Reply

      Thank you Ken, for your pertinent comments. The Travel Policy is a rather complicated subject from the point of view of many corporates (unless they’re multinationals that have a professional consultant writing it for them), TMCs and really everyone involved. I have been mulling over writing about it and plan to write about it, next!

  3. Fahim Jalali


    Good stuff as always Mano. Always a pleasure to read your comments and gain insight.

  4. Shabbir Ali


    You have gone into it every major details, bravo that, extremely interesting Insight and good to arm yourself against the continuing battle and these measures will only make us be victorious or atleast survive this storm. Surly no one can predict the future but we can learn from the present and react affective l,rather than go with a knee jerk reaction which would be too late to gather oneself. Once again a huge applaud for sharing a blue print of how to tread and move ahead.

    • Reply

      Thank you for your comment, Shabbir. There will have to be a painful contraction of the workforce. Some will not survive this Covid-19 situation, in the sense that they will leave the Travel Industry all together and move to other jobs. It is a pity that some promising talent will exit Corporate Travel. The Industry will evolve stronger and renewed to handle Business Travel as it really should be handled.

  5. Susan George


    What a great document Mano. So comprehensive & in detail; capturing market trends. Congrats & all the very best!!

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