With the recent boom in leisure travel, it might be easy for a travel agent to forget the income and other benefits they can derive from pursuing the corporate market.
Data from the American Society of Travel Agents (ASTA) shows that the average member has seen their leisure business slowly increasing the last six years, from 78 percent to 82 percent, while the share of corporate travel has gradually declined.
Many agents who are busy booking vacations might feel that helping a company manage their travel requires purchasing sophisticated software to ensure travel policy compliance; time-intensive commitments to low-return reservations (like air and hotel); and that corporate travelers are far more demanding.
But booking corporate travel can also be extremely lucrative and enhance an agency’s seasonal cash flow because corporate travel is steadier throughout the year. Agents can also then cross-sell leisure travel to their corporate clients, and enhance their ability to charge leisure travel fees, which are more commonplace and accepted in the corporate space.
ASTA recently collaborated with The Company Dime on a survey that highlights how managed and unmanaged travel programs can benefit from a savvy travel agent.
Many agents looking to reap these benefits are already engaged. ASTA says that nearly one-fifth of their more than 2,500 member companies report corporate sales make up 70 percent or more of their annual sales volume. As the size of the agency shrinks so does the percentage of their business coming from corporate travel.
According to Eben Peck, ASTA's executive vice president, advocacy, these numbers, and trends have stayed the same for at least the past five years.
“There is a myth out there in the marketplace that ASTA equals leisure travel only. That myth spurred us to do this project,” Peck said. “If an agent is focused on leisure, and is going through the process of taking a look again at the corporate market, this report is a great summary of how to approach it.”
“If you’re an agency regardless of size, and looking for a steady line of income, the value of the corporate market is there,” said Mark Meader, ASTA's senior vice president of marketing, industry affairs, and education.
Fees are accepted in corporate travel
According to ASTA’s 2016 Service Fee Report, three out of four members say they charge fees, although that percentage has been slowly declining for several years. In that report, ASTA noted how it is an “accepted practice” for corporate-focused agencies to charge a flat fee for booking different travel segments (e.g. air, rail, hotel, rental car) or a percentage of overall transactions over a set period of time.
“Leisure-focused agencies, on the other hand, tend to focus on charging their service fees on trip planning (FIT), tour packages, cruises, and groups,” ASTA said.
Taking on more corporate business, ASTA advises, could make service/transaction fees more acceptable for an agent’s leisure business. “That might be an added benefit to institutionalizing charging fees and reaffirming your value across your entire business,” Peck said.
“If you look at the service that you provide, spending control, providing preferred rates, you can account for and present those savings and show how the fees you charge deliver value,” said Meader. “From there, you can learn how to do the same on the leisure side.”
Getting to and understanding the decision-maker is key
The Global Business Travel Association estimates that companies of all shapes and sizes spent approximately $424 billion in 2016, and ASTA is encouraging agents to seek out their share of the opportunity. That means knowing who the decision-maker is at firms that an agent might already be doing business with, said Meader, and devising a plan to reach out to them.
According to The Company Dime/ASTA report, the CFO/controller is the most likely main contact (27 percent), followed by a procurement officer (21 percent) and the executive/administrative assistant (20 percent).
“Identifying this person is not always easy, and he or she may wear many hats,” ASTA says in the report. In some cases, travel falls to someone in human resources (13 percent) or an office manager (5 percent).
Part of the report focuses on how agents find customers, overcome paint points and explain their value.
To get in the door, agents should find out what the pain points are of a potential client’s top travelers. For many professionals, said ASTA's Director of Communications Erika Richter, the pain is the amount of money a company is losing by having its own employees booking their own travel.
“If you’re a professional who bills clients on an hourly basis, that’s revenue a company is losing,” Richter said. She proposed that agents look for law and consulting firms as potential clients that could see an agent’s transaction fee as actually saving them money.
Demonstrating value during the sales call also depends in part on showing that you understand the most pressing issues in corporate travel today. Meader and Peck advised agents to brush up on issues like corporate travel policy, loyalty programs and duty of care (how companies protect employees while they are traveling).
Don’t let fear prevent you from trying
Many travel agents have stayed away from the corporate travel market because they fear that online travel agencies and large travel management companies (TMCs) have cornered a complex and sophisticated market niche where a smaller agent cannot compete.
“Our study shows, it’s not one-size fits all industry,” said Meader. “There are various forms of managed travel. There are basic scenarios, where employees are booking their own travel and paying either with their own credit card, or a company corporate card. So, all a company might need is for you to help them book the travel. They will take care of reporting, policy, all of that.”
On the more sophisticated end of the spectrum, “the company might want you to have a corporate booking tool, with preferred deals automatically loaded. But that is an extreme. Often it’s more likely in between. You can find the right level of corporations that need travel that you can readily manage,” Meader said.
ASTA can also provide assistance, helping agents looking to enter or expand into the corporate market, Meader said. Corporate travel sales and servicing are a big part of the organization’s twice-yearly Premium Member meeting, he said.
(Article originally published by travelmarketreport.)