Using a traditional travel agent offers surprising value to small businesses.

By Julie Moline

With the astonishing success of online travel agencies such as Expedia, Orbitz and Travelocity, can traditional agencies-the kind with travel agents (or travel counselors, as they prefer to be called) and hefty transaction fees-be of any use to small businesses?

Surprisingly, the answer may be an emphatic yes. "For simple bookings, online agencies work well and they're inexpensive," says Tom Wilkinson, president of TRW Travel Consulting LLC. "But when itineraries get complicated or changes are made on the fly, it may actually be more cost-effective to use a traditional travel agency than to have travelers make arrangements on their own." Wilkinson, who advises companies on ways to manage corporate travel costs, believes small businesses can benefit substantially by aligning with a travel agency. "Almost every business owner travels a lot and likely knows some tricks, but being a savvy business traveler is very different from knowing how to manage travel across your enterprise," he says.

No matter what your travel budget is – even if it's less than $100,000 annually – your firm can benefit from a strategic procurement approach to travel. That means defining spending guidelines and directing your company's travelers to certain suppliers. Then, by channeling all bookings through a single agency, you can see how much employees spend, with which suppliers and for what purpose. That information will give you an idea of where you can save.

At the same time, Wilkinson says, you'll have an ally when the inevitable snafu occurs. "It doesn't have to be something calamitous. You could miss a flight, or a flight gets canceled or delayed, and you need to rebook. Or you have a reservation at a hotel, it's midnight, there's no record of your reservation and there are no rooms left. Here's where a travel agent is a lifeline. You can call an 800 number any time of the day or night and get that room, or get rebooked on a flight in minutes rather than waiting for hours in line at the airport counter. You also have an instant advocate whenever you need one."

Though many small companies don't have the budget to dedicate a full-time travel manager, outsourcing travel management to an agency is actually a cost-effective way to build in spending controls and get professional service while paying on an ad hoc basis. "You don't have to have a travel agency on retainer," Wilkinson says. "You pay as you go."

Travel agencies, for their part, are creating special programs for small and midsize businesses that compete head to head with online agencies on price and transaction costs, while adding value in the form of discounts and rewards.

At American Express, for example, Preferred Extras provides small businesses with discounts and amenities, secured by the purchasing power of American Express, and offers $5 online transaction fees, the same as online agencies. Customers can opt for a range of live agent services, from standard to VIP. Per-transaction fees range from $20 to more than $50. A price guarantee will match or beat any fare on a public website (except opaque sites like Priceline), says John Berkley, vice president and general manager of Middle Market Direct for American Express. Service quality is guaranteed as well. "Anytime the traveler finds service is sub-par, we refund the transaction fee, with no debate," says Berkley.

To sweeten the deal, every airfare earns double Membership Rewards points. Other benefits include 10 different kinds of reports on travel spending and discounts of 10 percent to 40 percent on air, hotel and car bookings. For details, visit www.americanexpress.com/businesstravel. 

Julie Moline is a freelance writer, editor and editorial consultant in New York City. She is also the former editor in chief of Corporate Travel magazine.