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On September 22nd 2020, the Advantage Travel Partnership hosted a webinar in partnership with MIDOCO GmbH on the subject of the subscription model for TMCs. Regardless of the pandemic, the TMC pricing structures have been in discussion for some time. The core concept of the subscription model is to allow customers to buy into the entire TMCs value proposition . An ITM survey shows that 60 % of travel buyers are open to review their pricing structures.1
View the session recording here:
Bex Deadman MD of Blue Cube Travel is one of the first to break new ground installing a subscription model in a TMCs pricing structure.
Matt Griffin CPO of TRAXO that specialises in itinerary intelligence and travel data aggregation to organise and unlock all travel data
David Chappel is Country Director UK at MIDOCO that provides travel Mid-office software with the mission to create a data backbone for travel organisations that want to benefit from multiple content channels and integrate these efficiently into their technological landscapes.
Simon Potter Group Procurement & QHSSE Officer at Inchcape Shipping Services provides market and port intelligence allowing their customers to focus on their core business and make informed decisions.
The evolution from the transaction-based to subscription-based view has been going on for some years. The subscription model allows TMC clients to subscribe to a set of services based for monthly, quarterly, annual fees based on modules or other elements. The value proposition and service of TMCs have changed due to new technological developments, regulatory requirements and other factors that have come about in the evolution of how people consume travel services. Compared to the booking only as it was decades ago, the subscription model pays attention to the broad service portfolio of a TMC. TMCs are doing a lot more than just booking travel.
Needs to be there for a TMC to be able to offer everything. Price is still going to be there as an argument. NDC idea might help to streamline internal costs which is necessary for the subscription model to work.
Multiple contents are the future. Knowing your commercials is crucial to make it work though. It depends on whether your commercials show that moving down that road applies to you. If you have started going down that road, it should be easier to use a subscription model because you offer a broader service portfolio.
For a corporate, it is more straight forward as it is easier to justify travel cost, which is lower. It changes travel policies because you can make travellers book through the TMC program which has a lower cost related hurdle.
The poll conducted during the webinar showed the 52 % out of 130 attendees would consider introducing the subscription model in theirTMC.
1 Source: https://www.thebusinesstravelmag.com/index.php/news-pages/articles/itm-unveils-buyer-survey-results