Travel agencies are pivotal in guiding travelers to hotels and other accommodations, which is particularly evident in the significant power of Consortia and Travel Management Companies.
What are Consortia and Travel Management Companies
A Consortia is an organization made up of independent travel agents and agencies joined to increase their buying power, commissions, and amenities which they can provide clients worldwide. Examples include ABC Global Services, CCRA, CTM/Radius, THOR, and Virtuoso.
A Travel Management Company (TMC) manages a company’s complete business travel requirements. TMC’s employ their own agents, who work on behalf of the companies the TMC contracts with. While smaller/mid-sized TMCs are often affiliated with a Consortia to access better rates, larger TMCs have their own hotel programs and therefore exert more control over their agents’ point-of-sale. Examples of Travel Management Companies include Amex GBT, BCD Travel, CWT, and SAP Concur.
In exchange for offering better rates (in some cases) and/or commission to these TMC’s & Consortia, hotels receive listings under their dedicated GDS rate codes, hotel directories, and intranets for additional exposure to all member agents. Viewership of Consortia rates in the Global Distribution Systems (GDS) is restricted and only affiliated agents will be able to view and book those rates. If a travel agent searches for hotels in your city under the Consortia rate code and your hotel is not listed with the Consortia, your hotel will not show up, which makes listing with major Consortia groups invaluable for your GDS production and competitive exposure.
Benefits of Participating
Amplifying Visibility and Reach
Consortia and Travel Management Companies act as pipes, channeling a stream of potential guests toward hotels. Through their extensive networks and collaborations with mid-sized and large companies and with travel agency networks, these entities amplify the visibility of hotels. This expanded reach opens doors to a wider audience of travelers seeking diverse lodging options.
Access to Diverse Markets
Partnering with Consortia and TMCs enables hotels to tap into diverse markets that might have been otherwise challenging to reach independently. These alliances provide hotels with access to segmented markets, attracting specific types of travelers, whether corporate, leisure, luxury, or niche segments, thereby increasing the potential for greater occupancy and revenue.
Negotiating Power and Strategic Alliances
The strength of Consortia groups and TMCs lies in their negotiating power and ability to consolidate travel. They secure favorable terms and benefits for their travelers and affiliated hotels, ensuring advantageous deals for travelers and competitive rates for hotels. In the case of mandated travel programs, participating hotels can benefit from increased occupancy from corporate accounts, or shift share of business from competitors.
Data-Driven Insights and Support Tools
Through data-driven insights and support tools, Consortia and TMCs equip hotels with valuable information and resources. This includes market trends, traveler preferences, and marketing opportunities, empowering hotels to make informed decisions and adapt swiftly to evolving guest expectations. Technological advancements from TMCs empower travelers to book hotels more easily within their travel programs, often without the need to consult with live travel agents or the hotels themselves. These direct bookings from the GDS often come at a lower cost to hotels than bookings made through OTA channels.
Building Credibility and Trust
Associating with reputable Consortia groups and Travel Management Companies elevates a hotel’s credibility and fosters trust among travelers. This is especially true with independent hotels, which don’t have the traditional backing and reputation of larger, global brands. Affiliation with these entities signifies a commitment to quality, reliability, and service excellence, instilling confidence in potential guests and the travel agents who book travel, and leading to increased bookings and guest loyalty.
Considering Costs of Enrollment
Costs to participate in programs offered by Consortia and TMCs can vary greatly. Fees can range from as low as $1,000 to over $6,000 annually, depending on the package offered. Some Consortia have $0 or very low listing fees but may include “Pay for Performance” inclusions that require a commission for every room night generated. Therefore it is very important that hotels conduct their due diligence on production volume in their markets and with their competitors for each Consortia being considered.
In addition, many programs have requirements that all hotels must agree to, such as agency commissions, specific amenities for travelers (WIFI, free breakfast, etc.), and/or special perks like upgrades, and welcome gifts upon arrival. Other concessions may include Last Room Availability (LRA) and reduced or waived cancellation policies. Hotels should carefully consider all these factors and the associated costs to determine if the potential volume of reservations will have a beneficial ROI.
How Can TCRM Help?
TCRM provides professional Revenue Management support and guidance to a variety of lodging partners, including limited and full-service, branded, and independent hotels across North America. Through our work with our hotel clients, we respond to RFPs and enroll hotels in a variety of travel and marketing programs to gain exposure, shift the market mix, and grow revenue.