As money flows shift and commercial models come under the spotlight, one big question stands tall: do buyers and suppliers really share the same definition of value?
The topic no one wants to tackle head-on: money. More specifically—how it flows through our industry, and what that means for the future of travel management.
Our CEO, Caroline Strachan, was grateful to the Institute of Travel Management (ITM) for inviting her to host a spirited debate at the recent Conference in Wales on this very subject. Sensitive? Absolutely. Necessary? More than ever. And kudos to ITM for creating space to have this critical conversation. To help set the scene, we shared a view of how we help clients decode the tangled web of payments, rebates, and incentives in our ecosystem.
The First Reaction?
“Wait—why is the TMC taking money from everyone?”
It’s a fair question. And if you’ve ever wondered, “Why am I paying a TMC fee when they’re getting income elsewhere?”—you’re not alone.
Let’s rewind.
The Critical Shift
Decades ago, suppliers paid commissions, and the client got what felt like a “free” service. But as commissions declined, a funding gap emerged. Enter: the client-paid model.
Transaction fees. Management fees. You know the drill.
Now, some procurement strategies might suggest, “Let’s squeeze out those extra income streams.” But that’s an oversimplification. TMCs have fixed and variable costs like any business, and yes, they need to make a profit to create a shareholder return or reinvest into the company (and clients) for a viable future.
When you reduce supplier income, client costs rise. When client budgets shrink, supplier dependencies grow. It’s a delicate seesaw.
Follow the Money, Strategically
A great procurement leader knows: follow the money, and you’ll understand the motivation.
Not in a “Show me the money!” (cue Tom Cruise) kind of way – In a “What behaviours does this incentivise?” kind of way.
If a TMC earns revenue through a GDS, does that shape the tech stack they recommend to you?
If there’s a commercial relationship with an OBT, might that influence their preference?
You get the picture.
Giving Buyers the Power
Jim Davidson of Accelya said it best at ITM: “The buyer presses the buttons.”
When buyers understand the flow of money, they ask better questions. And when they ask better questions, they’re in the driving seat. That knowledge puts them in a position of power—not to break the model, but to shape it into something better for their programme.
The Real Question: What is Value?
One question from the ITM audience captured the room’s attention:
“If buyers were getting value, would they care about the commercial model?”
Boom. That’s it, right there.
If you’re getting real value, the model becomes less of a battleground.
That’s why Festive Road is leaning in here.
We’re working with buyer clients, supporting working groups, and contributing to industry thought leadership to help everyone move toward a shared understanding of value.
There’s work to do. Let’s create a better way.
