Are RFPs the best method for evaluating Travel Management Companies?

Key questions and considerations from your industry leaders at Elite Travel Management.

Evaluating company RFPs to explore or select a new Travel Management Company (TMC) can be a very intensive and expensive process. In many cases, an organization with a preferred partner will do so to determine who else is out there and if they’re getting the best bang for their buck. But is it worthwhile? 

We’re here to identify the pros and cons of conducting an RFP related to your company travel program and when it’s truly worthwhile.


Key considerations: 

Does our company travel spend warrant an RFP?

In most cases, TMCs will not consider a formal RFP unless the entire  travel spend exceeds $2 million annually. A TMC evaluates spend based on total airline, hotel, and car rentals your company books.

Who will our RFP attract?

A travel RFP that is posted on sites such as MERX and Purchasing Connection will attract any agency set to receive a notification if they key word “travel” is triggered. In many travel RFPs, we see more than twenty companies bid, whereas in the corporate travel industry there are 4-5 main players.

Why might a TMC choose not to bid on our business?

Like all companies, corporate travel providers consider a bid or no-bid process. Just like the time and resources that go into a bid process to create and evaluate an RFP, a significant amount of resources go into a quality travel RFP from the TMC. A TMC may consider some of the following questions before determining if they want to bid on your travel business:

  • Do we have an existing relationship with the company? Have they met our TMC in the past?
  • Have we bid on their business in the past and how long have we been in touch with them?
  • Are the outlined legal requirements industry-aligned? If not, it’s a no-bid due to the requirements of your organization and the completed forms.
  • Is it strictly a bidding war? A race to the bottom on service fees, with heavily weighted scoring on fees, can scare away potential TMCs.

ELITE INSIGHT:  A TMC is accustomed to hearing questions about fees first. Industry insiders involved in corporate travel know that fees are not the real areas to save money.

THE 4 PROS OF RFPS:

  1. Provides a black and white comparison.
  2. Requires a commitment to the process. It allows you to determine who is willing to go through this process to earn your business!
  3. Uncovers new initiatives. Even the TMC you do not pick as the winner may uncover new ways of efficiencies, technology, savings, or service throughout the process.
  4. Keeps incumbents on their toes. It’s important to keep your current provider honest and on top of the latest systems and best fees.

THE 4 CONS OF RFPS:

  1. A significant investment of your time and internal company resources is required to to create and follow the RFP process.
  2. Attracts vendors who are less than ideal, but still require equal time and consideration to determine if they are the right fit.
  3. Some TMCs will no-bid. In most RFPs, we see TMCs that decide not to bid on the business simply due to the RFP process in travel, which can reduce your options for consideration.
  4. Often, RFPs contain generic questions that may or may not be relevant for a TMC.

A final word on RFPs:

In our experience, the most proven process when evaluating a TMC includes

  • Reaching out to five key TMCs who specialize in business travel. They can be found by word-of-mouth or a simple Google search. 
  • Asking each of those TMCs for a brief 15-minute introduction meeting to determine the best three potential fits as a TMC partner. If a TMC will not meet you in person during the proposal stages, it’s a good sign your review meetings might be missed too.
  • Requesting those three TMCs prepare a proposal, rather than an RFP (after providing the TMCs with a detailed breakdown of the specific needs of your company so they can best deliver on their proposal).

Want access to our list of top questions for TMCs? Just ask!

Remember: Not all corporate travel programs are the same. Our #AskUsAnything program encourages all travellers to lean on Elite Travel Management as their trusted travel resource.

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