SPOTLIGHT SERIES | TMC FEES
CONTACT CHARGES Regardless of the pandemic, TMC fees have become increasingly convoluted. “I’ve been through so many TMC RFPs and I’ve seen all the bells and whistles – all the fees and charges,” an independent consultant told BTN Europe. There can be up to 50 line items for transaction fees per country, they said, and then “probably another 20 or more fees for implementation, data hand- offs, single sign-on, re-shopping services, unused ticket tracking… fee, fee, fee! It’s really challenging for buyers to manage and audit all that and I think it’s challenging for TMCs too.” One surcharge that frustrated many buyers during the pandemic was contact fees. When transactions dried up at the onset of the pandemic, some TMCs introduced fees for calls that did not result in a booking. Probably the highest profile of these was a $25 contact fee introduced by American Express Global Business Travel. It applied to phone calls, emails and chat exchanges where there was no booking, although the fee was often negotiated down “to a couple of pounds per call” according to one source. One corporate who had enough clout to have it waived completely told BTN Europe: “We absolutely fought that and in the end they didn’t apply it. We felt it was completely against what a TMC should be. It shouldn’t be an expectation that every call results in a booking.” The buyer adds: “TMCs say the fees are not about profit but about being able to provide the level of service we expect so I am sympathetic to a certain point. We value their partnership and appreciate there are reasons for costs to go up.” A spokesperson for Amex GBT said the contact fee was introduced during the pandemic “at a time when we were handling a disproportionately high volume of calls from travellers seeking information
rather than booking travel. It is one of the many approaches we have taken with customers to best align the pricing between the cost structure of our services and the activities that drive those costs.” Margaret Birse believes most TMCs’ contact fees are around the $10 mark and can be applied multiple times in relation to a single booking. “If someone calls to check the itinerary, request the ticket etc, that could be $40 on top of the initial online booking fee,” she says. “They [TMCs] don’t seem to be discouraging people from making those contacts yet some are struggling with the resources required to maintain a high level of customer service.” But contact fees aren’t all bad, believes another independent consultant, Chris Pouney, who says they can help root out particular behaviour among travellers. “Rather than putting my transaction fee up, the TMC can bring in that [contact] fee and get more revenue for a while, while you stop those people calling when they really shouldn’t be. I’m fine with that. I doubt many buyers have said that but, in theory, it’s right as long as it’s done in a transparent and collaborative manner.” Although many contact fees were introduced or increased during the pandemic, they are not an entirely new concept. During his time at CWT, Warner oversaw the launch of an “excess contact fee”. He explains: “If the average contact per transaction was higher than what we’d based the contract on then we reserved the right to charge for those excess contacts. Some customers were very understanding of that.” CWT says it does not charge a “universal contact fee” for calls that do not result in a booking but says there are circumstances where a charge could occur, while FCM told BTN Europe it only charges a contact fee on its emergency out of hours service. One TMC striving to simplify its model with an “all inclusive” approach is Travel
Planet. Its fees include everything from account management, implementation and reporting, to approvals systems, traveller tracking and even out of hours service. “Our fees are all-in…. I’ve seen the price templates from other TMCs and you need an A3 printer for those,” says James Diaz, the TMC’s UK chief executive. Another mid-market European TMC told BTN Europe that they do not “in general” charge a fee for calls that don’t result in a booking, but the organisation is open- minded on high-cost booking charges – another cost some buyers object to. “Non- GDS content currently makes up a relatively small percentage of our bookings, but we would consider introducing additional fees when the demand increases,” they said, without wishing to be identified.
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businesstravelnewseurope.com | SPRING 2023
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