It’s Small Business Month, a time when we recognize the unsung heroes of our economy – small businesses.
Small businesses provide jobs to 61.7 million Americans and generate nearly half of the country’s economic output. The people within this community are hardworking, passionate individuals who pour their hearts and souls into the business. A testament to their tenacity, they were among the first to resume business travel during the pandemic, excited to get back out on the road and in front of their customers again.
Our earnings report shows that travel among small- to medium-sized enterprises (SMEs) is rebounding faster than any other customer segment. During the third quarter of 2022, SME booking activity hit 80% of 2019 levels – 19 percentage points above multinational corporations. It’s a remarkable achievement considering the barriers SMEs can encounter managing their travel programs.
Terri Buscemi, vice president of business development at American Express Global Business Travel (Amex GBT), is well aware of the difficulties they face. She owned and operated a small business herself – a travel management company (TMC) catering to SMEs – for about 15 years.
Terri says travel expenses are a constant source of stress for SMEs, who often face higher costs compared to larger companies. This is because SMEs typically do not have the negotiating muscle their bigger counterparts have, so they’re unable to meet the spend volumes required for preferred corporate discounts with travel suppliers. The complexities surrounding the return to travel only compound this issue.
“SMEs are challenged with knowing how much they’re going to spend in the new environment, asking questions like: ‘Do we need to return to the same level we did before? Are there things we can do virtually instead? Maybe we can combine meetings so we can travel less frequently?’” said Terri. “This makes it difficult for them to say, ‘Yes, I will spend this much with this specific carrier or hotel.’ It’s a lot for them to absorb.”
Providing duty of care and supporting their traveling employees is another challenge for SMEs, who typically don’t have entire risk management teams performing these services, explained Terri.
Teaming up with a TMC – the simple solution
Working with a TMC like Amex GBT that offers solutions built around smaller businesses’ travel and spend management needs can be a painless way for SMEs to fill these gaps. By taking advantage of the preferred rates TMCs can secure with suppliers, smaller businesses can save a substantial amount on travel costs – sometimes up to 25% to 50% depending on the rates they book. In addition, re-shopping tools that automatically search for and rebook lower hotel rates and airfares can cut trip expenses without travelers needing to take any action.
“Rather than trying to negotiate their own programs, it’s smart for SMEs to partner with a company like Amex GBT so that they can take advantage of our preferred rates and solutions right from the start,” Terri said.
She added that a TMC’s risk management solution can be a vital asset for SMEs to fulfill their duty of care obligations, enabling them to quickly locate and communicate with traveling employees in the event of an emergency. And if a flight disruption occurs, a TMC can provide stranded travelers with quick rebooking support before they have time to stress.
Terri noted that small businesses could overspend on travel if they lack policies and don’t set parameters around employees’ purchasing decisions. A TMC can help implement a travel policy based on best practices, giving employees clear guidance on what type of airfares and hotels they can and cannot book. This can translate into significant cost savings for SMEs.
“We put all that at their fingertips,” Terri said. “We make the customer journey much easier and support the business’ initiatives to effectively manage their spend around travel.”
Small businesses may believe a big, global TMC doesn’t understand their world, but that is far from the truth.
“We have one of the largest databases of customers to draw and learn from, so when we provide SMEs with best practices, it’s not just Amex GBT pushing what we think is right. It’s actually from clients just like them with the same type of needs,” Terri said.
Another reason not to shy away from a bigger TMC? Partnering with a more established company can be a safer choice in this uncertain economy.
“I understand how attractive it might be to work with a local, regional agency where you’ve known the person working there forever,” Terri said. “But with a larger TMC, you have confidence that in a downturn, it has the stability to support you through those peaks and valleys.”
As a company that is committed to the success of SMEs, we understand they aren’t merely looking for a scaled-down version of a big-company solution. They require a suite of tools and services that can cater to their specific needs, both now and as they evolve and expand.
With that in mind, we’re thrilled to announce our recent partnership with the National Small Business Association (NSBA), a nonpartisan organization that has been advocating for small businesses for 85 years. We are excited to be working with this association, united by the common goal of helping SMEs get where they need to be to build and grow their business. By working more closely with the SME community, we can better support small businesses and help them thrive in today’s complex world.