15 September 2010 | Angeline Albert
Suppliers and travel management companies (TMCs) should reveal details of preferred financial partnerships to travel buyers in the interests of transparency, says a report.
The Institute of Travel & Meetings (ITM) study found that disclosing the names of suppliers, from whom intermediaries receive a second income, would benefit travel buyers.
ITM chairman Jamie Hindhaugh said: “The quest for transparency is to understand what comprises the rates for travel supplies, from hotel rooms to air fares and to charges for the distribution and management of business travel.”
The report, based on anonymous interviews with suppliers and buyers, said although disclosing additional incomes related to corporate transaction volumes may not be practical, revealing a register of interests would be viable.
Hindhaugh said: “Disclosure of the suppliers from whom intermediaries receive secondary income would provide travel buyers with all the information they need to assess the intermediary influence, not just cost.”
Intermediaries purport to act on behalf of their corporate clients from whom they receive fees. However, they also receive money from suppliers in the form of sales and marketing agreements (SMAs).
The ITM report said: “Most intermediaries are reluctant to acknowledge their existence and so SMAs are shrouded in secrecy. Just as members of parliament now have a register of interests, it behoves intermediaries to be more open about their commercial relationships.”
Buyers should be able to trust TMCs to offer value for money, it said, while disclosing their commercial relationships with suppliers.
Being open about relationships is not the same as revealing sensitive commercial information, added Hindhaugh.
ITM represents more than 1,000 professional buyers and suppliers with a travel and meetings spend in excess of £34 billion a year.