The recent spate of travel market mergers and acquisitions makes big business sense. After all, most large global organisations choose to select a TMC they consider to be similar in size and organisation, namely a large global travel management company.
And the small number of potential respondents to the RFP has just gone down by one.
Does this really matter?
The relative importance of the four points below will depend totally on corporate culture and objectives:
1. Account management
American Express GBT has been at pains to stress the geographic complementary of the acquisition — HRG is stronger in Canada; Amex GBT is stronger in the US. Some countries that were only represented by a franchise partner become wholly-owned operations so local touchpoints are improved.
Physical presence has traditionally been important in relationship management. Account management today, however, is less about chatting things over in a bar and more about forensic benchmarking and analysis of data, targets and identifying opportunities for greater efficiencies.
2. Technology
This is an area where Amex GBT and HRG have been pursuing different strategies. Both offer data reporting from multi-channel content sources but booking options and access to content are not as straightforward.
Amex GBT is a GDS disciple and it pursues GDS-based solutions with as much functionality, flexibility and content as possible — hence its NDC deal late last year with British Airways and Iberia. HRG, however, has been at the forefront of looking at distribution alternatives beyond the GDS. It believed that trends in other markets plus the increasing popularity of multi-channel content sources demanded that clients have more distribution channel options, such as direct connects.
GBT has pledged to respect the different ways that individual clients operate but this may not be a long-term commitment. And a choice between the two systems might not be available for future clients.
3. Costings
The enlarged Amex GBT is still far from being a monopoly but one fewer large global player in a market inevitably means fewer options. But they may be more clear-cut.
The trend has been to use technology to steer travel management to the transactional model which keeps the cost of travel management as stable and low as possible. After all, in a world where suppliers universally practise revenue management and dynamic pricing fares and rates can't be defined for a year. A transaction fee, however, makes budgeting the cost of travel management and meeting that budget target much easier.
Nonetheless some businesses are willing to pay higher fees in exchange for a higher level of service for its travellers.
4. Service
Geographic location is important for companies and cultures that value personal service. It is less important if the business travellers are comfortable with mobile solutions. Many US business travellers will be comfortable with a tool that enables bookings, itinerary changes and 24-hour support. Local offline service may be more valuable to those based in the Middle East.
As Reed & Mackay's acquisition of Hillgate might demonstrate, there may potentially be a market for higher service global companies rather than just those that focus on transactional efficiencies.
The choice may now be clearly based on factors beyond the transaction fee.