THE INS AND OUTS OF CHANGING TMCs

26 January 2018

The inevitability of change pertains to all relationships, both professional and personal. The relationship between a travel management company (TMC) and its clients is no exception. Sometimes, for whatever reason, the change is complete, requiring a maturity and objectivity to ensure a seamless transition from one TMC to another.

More often than not, a company will change its TMC because:

  1. The TMC has not adhered to the service level agreements signed during the tender process. The dissatisfied client will usually inform the TMC’s Key Account Manager telephonically or via email, at times notifying the TMC in advance, at other times with immediate effect.
  2. The change is rotational. That is, the contract was for a fixed term and the term is coming to a close. The client will normally give the current TMC a month’s notice that their contract is about to expire and will be going out to tender.

HANDS OFF FLIGHTS

“When acquiring a new account, we are very aware that the current TMC’s flight bookings have in all likelihood already been issued,” says Sharon Nash, Travel Operations Director, Club Travel Corporate. “We can therefore not make changes or in any way take over those flight bookings. In other words, an airline ticket is not transferable from one TMC to another.”

HANDS ON ACCOMMODATION

Hotel/accommodation books are different, however. Unlike flight bookings which are ticketed and invoiced by the supplier almost immediately, the current TMC’s accommodation bookings will in all probability not yet have been invoiced at the time of change.

“As the new TMC we can therefore negotiate the same rates on behalf of the client,” says Sharon. “We simply inform the accommodation supplier that we are the new TMC, or we get a letter from the client informing the supplier of the change.”

THE COST OF CHANGE

Having two TMCs during the transition phase shouldn’t add unduly to costs. “Significant costs may be incurred in specific situations, for example if the client requests additional expensive technologies,” says Lindi Chiya, Account Management Director, Club Travel Corporate. “A temporary negative to having two TMCs will be two sets of reporting, the client having to pay two TMCs and, if on lodged card, two sets of accounting.”

CLIENT REFUNDS

Should the current TMC be holding unused tickets, they need to be submitted to the airlines for refunds. If the payment method is lodge card and the client has tickets to be refunded, then the client needs to keep the lodge card open for around six months. This will enable the airline to refund the lodge card from where the payment originated.

If the client is on a cash basis, the airline will refund the current TMC, who will in turn refund the client.

“Change can add to the stress of having to perform far from home in unfamiliar destinations,” says Lindi. “The need for a new TMC’s staff to be extra mindful and to always uphold the values of the company they represent is essential.”