WHY DINOSAURS DON’T ADD VALUE – ADRIAN MATT ON TMCs
Adrian Matt is an outstanding personality in the German-speaking business travel community. After 20 years in leading roles within the industry, he decided to found TravelBrain. Today, TravelBrain is the leading provider of consulting and project management in the industry.
Adrian loves his job. This is apparent in every moment of a discussion about the business. He curiously follows critical developments and analyses everything open-mindedly. His blog is a must-read for anyone interested in the future of business travel.
Adrian, thanks so much for your time! 2016 is a challenging year for travel management companies. What would be your advice for TMC managers?
First – review your job descriptions! A TMC needs passionate, sales-minded consultants. “Dinosaurs” who define their value through their ability to provide cryptic commands for GDS systems do not add actual value for the clients.
Second – review your KPIs! I would immediately abandon all KPIs that are related to “efficiency” and “handling time”. They are part of an obsolete concept. You lose the focus on your customers and the quality of service. This is the start of a destructive downward spiral.
Third – review your fee model. We see a growing gap between the average complexity of an offline booking and the related revenues. Offline bookings are increasingly complex because simple bookings are booked online. The revenue models don’t seem to adapt to this new reality. This costs a lot of money. There are certainly interesting alternatives.
There are increasing discussions about the traditional TMC business model being outdated. Do you agree?
It is true that this market and the requirements for TMCs are changing quickly. But there’s also a lot of movement within the industry. We see many agile players with great ideas – and they are able to implement them in a short time. That’s future-oriented business.
However, undeniably there is also a generational issue. Some decision makers simply don’t understand this new reality. They are leading their companies into dangerous environments. Or they decide to ignore relevant developments, which has essentially the same effect.
Which are those developments? What is the driving force behind them?
Travel Tech leads the pace. Companies like Concur, Amadeus or Sabre have become important direct partners for travel managers of large corporations. Egencia, with its massive development power, is still being widely underestimated. But we are seeing a clear development where classic TMCs are transforming into interchangeable Call Centres for “offline services”.
That is a dangerous field because there are new competitors: Call Centre specialists like arvato Bertelsmann or Competence Call Center know their business well. They are able to offer similar services for lower costs. The future of TMCs clearly lies somewhere else. Many will turn into consultants. This is definitely a good idea. But such a transformation is difficult. And it certainly implies substantial reductions of their current workforce.
Do you have some ideas about what a quick and agile travel tech company like Umbrella could develop for the business travel industry?
You have certainly made the right decision to focus on Umbrella Faces! TravelBrain has emphasised the importance of Profile Management for many years because it is the basis for automation.
Umbrella Faces is a flexible, state-of-the-art solution and it is very easy to implement. This is the best way to do it. And your success is the proof. I would love to see such agile tech solutions for Business Intelligence and Duty of Care. Most of the existing solutions are too inflexible and too clumsy for my taste.
Thank you, Adrian. We are absolutely looking forward for part two of our interview. We will get to know more about Adrian Matt himself, about TravelBrain and ExpenseBrain!