Before you start a TMC tender, it is worth knowing how they usually end.

American Express Global Business Travel reports customer retention of around 95 to 96 per cent. Corporate Travel Management's most recent full-year results record roughly $670 million of new business wins against $1.5 billion in retenders and renewals. Retenders are more than twice the size of new business.

Read those two numbers together and the picture is not subtle. Corporate travel tenders happen constantly. They very rarely change anything.

You could object that retention figures include clients who never went to market, and you would be right. But the CTM number does not. That is money the incumbent had to defend in a competitive process, and it dwarfs the money that changed hands. The tender happened. The supplier stayed.

Why the incumbent nearly always wins

None of this is a conspiracy. It is structural.

Your incumbent knows your programme better than any bidder can learn it in a six-week response window. They have priced it before, so they know where the margin is. They can see roughly what the alternatives will offer. And they know exactly how much you do not want to run an implementation.

Meanwhile your evaluation panel is scoring proposals against questions written from your symptoms. If the RFP asked about service levels, everyone will promise excellent service levels. By the second round the submissions look broadly the same, and the decision falls back to price and to the relationship you already have.

The process is well designed to produce a lower fee and badly designed to produce a better programme.

And the terms are usually worse

A tender reliably delivers one thing: a lower transaction fee. That feels like a win, and it is the number procurement will report.

But the fee is the input to your service model, and travel management companies are not sitting on the margin to absorb it. In 2018 American Express Global Business Travel turned $25 billion of transaction value into $1.9 billion of revenue and $22 million of net income. That is a net margin of 1.2 per cent, in a boom year, at the largest TMC in the world. CTM's most recent full-year net margin was 2.6 per cent.

These are not businesses with fat to give up. When you take fifteen per cent out of the fee, it does not come out of profit. It comes out of the team that answers your phone: fewer experienced agents, a higher ratio of travellers per head, the dedicated desk quietly folded into a shared one.

Which is how programmes end up with the same complaints eighteen months later, and a thinner service model to fix them with.

What it cost you to get there

Nine months, typically. Time from travel, procurement, IT, security, legal and finance. Consultant fees if you used one. An implementation. Then twelve to eighteen months before service settles back to where it was before you started.

Set that against the fee saving and work it out honestly. For most mid-sized programmes, the cost of running the tender exceeds several years of what the tender saved.

I am not against tenders. I built the software for them.

In 2004 I built ETABID, the first e-tendering tool in corporate travel. FTSE 100 companies and a Fortune 50 bank ran their sourcing through it. American Express, CWT, HRG and BCD all responded through it.

I thought the problem with tendering was that it was slow. It was not. We made it faster, which was a genuine improvement and an entirely different thing from fixing it. Organisations still went to market without having established what was actually wrong. They still received proposals shaped by whatever questions they happened to ask. They still, very often, reappointed the incumbent and wondered why nothing had changed.

Three questions before you go to market

What specifically is wrong, and how do you know? Not "service is poor" but which service, for whom, measured how, and since when.

Which of your problems would survive a change of supplier? Content gaps, policy design, payment failures, traveller behaviour and your own data quality all move house with you.

What did your last tender actually change? If the honest answer is the fees, that is your forecast for this one.

Sometimes the answers point straight at a tender, and then you should run one, with a much sharper specification than you would otherwise have written. Often they point somewhere else entirely, and you have saved yourself nine months.

Considering a TMC tender? It is worth establishing whether it will fix the problem.

Sources: Amex GBT investor reporting; CTM FY results; TCG Consulting.