Everything You Need to Know About Travel Management Software
Travel management software and travel reservation systems are interconnected tools that form the backbone of modern travel operations. While travel reservation software is specialized for booking specific travel services like flights, hotels, or car rentals, travel management systems focus on planning, booking, and managing business travel.
Global business travel spending is expected to reach $2 trillion by 2028, growing at a rate of 11.1% in 2024. Without sufficient travel management tools, tour operators have to deal with inefficient booking processes, poor visibility into expenses, and increased risk.
In this article, we’ll dive into how travel management systems can address these challenges and transform your business operations.
Understanding Travel Reservation Systems
Before we dive into travel management systems, let’s address travel reservation systems. Travel reservation systems are the engines that power bookings across the travel industry, enabling real-time travel inventory management, pricing, and reservations.
Types of Travel Reservation Systems
Travel reservation systems primarily come in two forms:
Global Distribution Systems (GDS): These are vast, complex networks that act as a central hub and connect travel service providers with travel agencies, online booking sites, and other distribution channels. The major GDS providers include Amadeus, Sabre, and Travelport (which operates the Apollo, Galileo, and Worldspan systems).
Central Reservation Systems (CRS): These are supplier-specific systems used by individual travel providers (such as airlines, hotel chains, or car rental companies) to manage their own inventory, pricing, and reservations.
For tour operators and travel agencies, integrating with these systems is crucial for accessing real-time availability and pricing across a wide range of travel services. When combined with travel management software, they create a powerful ecosystem that can handle every aspect of travel booking and management.
What is Travel Management Software? 5 Key Components
To fully leverage travel management systems, it’s important to understand how components work together to create a comprehensive solution for managing all aspects of travel for tour operators and travel agencies.
1. Booking and Reservation Tools
At the heart of any travel management system are robust booking and reservation tools. These tools provide self-booking capabilities that allow for easy search and booking functionalities. They offer access to multiple travel suppliers with many options for flights, accommodations, car rentals, and other travel services. One of the most critical features is real-time availability and pricing, which allows for instant confirmation of bookings and helps avoid issues like overbooking or pricing discrepancies.
2. Expense Management Solution and Reporting
Travel management systems typically include features for automated expense report creation, simplifying the process of tracking and reporting travel expenses. They often allow travelers to easily submit receipts for reimbursement. Integration with accounting systems reduces the potential for errors in expense tracking and reporting.
3. Policy Compliance and Enforcement
Travel management systems provide tools for setting and implementing travel policies to ensure compliance. These might include restrictions on booking class, preferred suppliers, or spending limits. Approval workflows can be set up to ensure that all bookings go through the appropriate channels for authorization. Out-of-policy booking alerts help catch any non-compliant bookings before they’re finalized, to help control travel spend and policy adherence.
4. Itinerary Management
Travel management systems typically provide a single source of truth for all travel arrangements. Real-time updates and notifications keep travelers informed of any changes to their itinerary, such as flight delays or gate changes. Mobile access gives them access to view and manage their travel plans on-the-go through smartphone apps or mobile-optimized websites.
5. Traveler Safety and Risk Management
Real-time traveler tracking allows travel managers to know the location of their travelers at any given time to help with traveler safety. Risk assessment tools help identify potential issues in destination countries or regions, such as political unrest, severe weather, or health concerns. Emergency communication systems ensure that travelers can be quickly contacted and assisted in case of any unforeseen events or crises.
Benefits of Implementing Travel Management Software
For tour operators and travel agencies, implementing a comprehensive travel management system be extremely beneficial:
Cost Control and Savings
- Leverage bulk booking discounts: You can negotiate better rates with airlines, hotels, and other suppliers, which can lead to substantial savings, especially for high-volume routes or frequent destinations.
- Enforce travel policies: Set up rules within the system to ensure all bookings comply with your agency’s policies. This might include preferred suppliers, maximum room rates, or class of travel restrictions. Automated enforcement reduces the likelihood of overspending and helps maintain consistent margins across all bookings.
- Reduce booking fees: Self-booking options for clients or streamlining the booking process for your agents can reduce or eliminate booking fees charged by third-party platforms.
Increased Efficiency and Productivity
- Streamline itinerary creation: Quickly build complex itineraries by accessing multiple supplier systems through a single interface. This can significantly reduce the time spent on each booking, so your team can handle more clients.
- Automate routine tasks: Features like automatic ticket reissuance for schedule changes or automated travel alerts can save your team hours of manual work each week.
- Centralize information: Keep all travel details, client preferences, and supplier information in one place, so it’s easy to find and access.
Better Data Analytics and Reporting
- Generate comprehensive reports: Easily create reports on popular destinations, average spending per trip, most profitable routes, or seasonal trends. This data can inform your marketing strategies and help you focus on the most lucrative areas of your business.
- Track commissions and markups: Gain clear insights into your earnings from each booking, helping you identify which suppliers or types of trips are most profitable for your agency.
- Monitor real-time performance: Access up-to-date data on bookings, cancellations, and revenue, so you can make quick adjustments to your strategies as needed.
Improved Customer Satisfaction and Loyalty
- Personalized travel experiences: Use stored client preferences to tailor trip recommendations and create customized itineraries more efficiently.
- Faster response times: With all information at their fingertips, your team can respond to client queries and make changes to bookings more quickly.
- Seamless communication: Provide clients with easy access to their travel details through mobile apps or online portals.
How to Choose the Best Travel Management Platform For You
When evaluating different systems, consider the following factors to find the best software for your needs:
1. Assess Your Company’s Needs
Before diving into the features of various systems, make sure you have a clear understanding of your company’s requirements. Consider your travel volume and the complexity of your typical bookings. Are you primarily handling simple point-to-point trips, or do you frequently book complex multi-leg journeys? Your budget is another crucial factor—determine how much you’re willing to invest in a travel management system and what return on investment you expect. Additionally, think about any specific industry requirements you may have.
2. Key Features to Look For
When evaluating travel management systems, look for comprehensive booking capabilities that cover all the travel services you offer, from flights and hotels to car rentals and activities. Be sure to choose a platform with robust reporting and analytics, mobile accessibility, and policy compliance tools.
3. Integration Capabilities
Look for systems that can integrate with your existing enterprise systems, such as your ERP or HR software, and your expense management tools. Also, consider the system’s ability to integrate with third-party apps and services that you currently use or may want to use in the future. The more seamlessly your travel management system can connect with other tools, the more efficient your overall operations will be.
4. User-Friendliness and Mobile Accessibility
If you choose a system with intuitive interfaces, the learning curve should be minimal and adoption should happen fast. Ensure the system offers robust mobile apps that allow for on-the-go management, booking, and itinerary access.
5. Vendor Reputation and Support
Finally, don’t underestimate the importance of choosing a reputable vendor with strong customer support. Look at customer reviews and testimonials to get a sense of other users’ experiences with the system. Consider the availability and quality of the vendor’s support, as well as the level of implementation assistance the vendor provides.
How to Implement Travel Management Software
Successfully implementing a travel management system requires careful planning and execution:
- Plan the implementation process: Set clear objectives and timelines, identify key stakeholders, and create a project team.
- Train employees and stakeholders: Develop training materials, conduct workshops, and provide ongoing support and resources.
- Apply change management techniques: Develop communication strategies, address resistance to change, and provide incentives.
- Measure success and ROI: Define key performance indicators (KPIs), track adoption rates, and monitor the impact.
Challenges and Considerations of Using Travel Management Software
While travel management systems offer numerous benefits, there are also challenges to consider:
Data Security and Privacy Concerns
Travel management systems handle vast amounts of sensitive personal and financial data, so protecting sensitive traveler information from breaches or unauthorized access is a constant challenge. Compliance with data protection regulations, such as the General Data Protection Regulation (GDPR) in Europe, adds another layer of complexity. Agencies must ensure their systems provide secure data storage and transmission.
Global Travel Complexities
For agencies operating internationally, travel management systems must be able to handle a multitude of complexities. Dealing with diverse supplier landscapes requires integration with a variety of local providers. Additionally, navigating different tax and regulatory environments requires systems to be flexible and constantly updated to ensure compliance across all operational territories.
Balancing Cost Savings with Traveler Satisfaction
Systems need to be sophisticated enough to find the right mix of comfort and economy, ensuring that cost-saving measures don’t negatively impact the travel experience. Addressing traveler preferences within policy constraints is a delicate task, so systems can be both flexible and firm.
For tour operators and travel agencies, travel management systems offer the potential to streamline operations, reduce costs, improve traveler satisfaction, and gain valuable insights into travel patterns and spending. As you evaluate your current travel management processes, take the time to assess your needs, research available options, and plan for a successful implementation.
