Updated 12th December 2018
Over the last week I've been asking or hearing from travel management companies (TMCs) about mergers and acquisitions. There has been consolidation cross-Europe and transatlantic for years but the recent mega-merger has got the industry talking more about what is to come.
Here's what some TMCs had to say.
Speaking at a UK press event recently Jason Geall, vice president and regional general manager for Northern Europe at American Express GBT said, "We will focus on new acquisitions in the UK and globally as we grow further…technology, content and people. It could be another TMC, or technology is very possible. We acquire for people too." While an integration team for the imminent HRG deal is being put together, the TMC is also switching SMT in Finland to the Amex GBT name and has made "good progress" to integrate KDS into its core offering. A new bundled offering for medium and small sized companies means the company wants to "use our global footprint but still be a local player too," says head of marketing EMEA and APAC Kate Roe.
No news or comment on acquisitions from Carlson Wagonlit Travel but says it is no secret that TMCs are aggressively investing or buying start-ups. CWT invests and is an active partner in accelerator programme Plug and Play. Its last acquisition was mobile technology firm WorldMate in 2012.
BCD Travel is in a three-year plan to grow earnings by 35%. Its recent acquisitions have included taking full ownership of operations in Brazil, Hong Kong and China while also acquiring Ticket Biz and growth in the meetings and events market. A spokesperson said, "We have a very aggressive acquisition strategy. We also have low debt and an owner that wants to grow. We're looking at acquisitions across the board: some to strengthen our global network strategically, some to open up new lines of business, with an emphasis on meeting and events and technology."
Under its umbrella Flight Centre Travel Group already has FCM Travel Solutions, Corporate Traveller, Cievents and Stage and Screen (and 4th Dimension in Australia) as well as more than 20 brands in the leisure travel space. It has been focused on chatbot SAM and through its group connections could integrate leisure content such as attraction recommendations for down time through its tools. At a pre-Business Travel Show event Steve Norris, corporate managing director at Flight Centre revealed the group's hotel management plans after it acquired Bespoke Hospitality Management Asia in July. While currently in Asia and focused on the leisure market, its hotel expansion could include hotels in major business destinations such as New York, Paris and Singapore. It means control over where and how rooms are allocated and what can be offered to corporates by way of volume, LRA or otherwise.
"We have no immediate plans," says James Parkhouse, CEO of Capita Travel and Events. "The acquisition of NYS last year has added tangible benefits to our customer offering with innovative meetings technology and talented people with strategic meetings expertise. And similarly, we wouldn't rule out further acquisition based on delivering smarter ways of working which benefit our customers, suppliers and people - as long as there was a strong cultural fit."
Could Corporate Travel Management (CTM) continue its growth via acquisition? There is no current news, but acquisitions in the last 2-3 years have included Chambers Travel Management (Europe), Redfern Travel (UK) and Andrew Jones Travel (Australia). Update Dec 2018: CTM acquired Hong Kong-based Lotus Travel Group in July
Egencia's CCO Mieke de Schepper echoed what others had mentioned on the Business Travel Show floor — when companies are busy with mergers they are distracted. "It's an opportunity and clear reflection of what's going on the industry," she told me. Egencia itself has completed the integration of Orbitz and bought expense tool Traveldoo in 2011. For Traveldoo's CEO Stephane Donders, it's an opportunity to offer an alternative. "Consolidation is a way to manage policies and technology globally but if the TMC, technology etc is all in one…travel buyers might not want to put their eggs all in one basket," he suggested.
After the merger last year, Mervyn Williamson, managing director of Travel and Transport Statesman says the teams are "relaxed in their new environment" and there is a "real strength" in the London-New York network and service level. It doesn't appear to be actively looking but would consider if the "right strategic acquisition came along". Update Dec 2018: That opportunity came along; in October Travel and Transport announced it is acquiring Radius Travel.
Clarity is a year into its merged operations with Portman but is looking for more. CEO Pat McDonagh told me, "Yes, we're looking to acquire. It could be in a range of areas but the principle targets will either be additional volumes through acquiring another TMC or adding technology or capabilities we don't have. We're in no hurry and it has to be the right deal at the right time."
Andrew Waller, chief executive officer, the ATPI Group said, "Following the agreement with ATPI and Direct Travel and the launch of Direct ATPI Global Travel, our current focus for expansion is on growing its offer and ensuring it reaches its potential worldwide." This week it has also announced an alliance agreement with booking and expense tool Serko which will see the Zeno tool rolled out at ATPI globally.
Fred Stratford, Group CEO at Reed & Mackay said, "We listen very carefully to our clients and there has been a clear and consistent message that they would like to see wholly-owned Reed & Mackay operations in their key markets, so growth is absolutely a part of our strategy…it is critical that the growth aligns with the strong service culture we foster. In some cases, such as our recent acquisition in France, Frequent Flyer Travel Paris, buying a like-minded business is a great option, in other cases organic growth can be a better route to market." Update Dec 2018: Just a few months after in May Reed & Mackay announced its acquisition of Hillgate Travel.
UK-based Gray Dawes Group has added five TMCs to its group in the last three years and is actively looking for more. A spokesperson said "We have further M&A plans. Our acquisitions of BTP Travel, Travel Focus/Events in Focus, Travel Management Group plc, Cambridge Business Travel and CTM Travel have proved resounding successes not only through the synergies we've been able to drive through scale but importantly for the customers of these companies who are benefiting from GD's service and pioneering technology. We would like to develop our presence in Greater Manchester and are also looking to continue to scale our business in the South with further acquisitions this year and next." Update Dec 2018: Gray Dawes announced its acquisition of Giles Travel last month.
Another UK TMC, Business Travel Direct, would also consider further acquisitions. Most recently it has been extending its partnerships with technology firms such as Traxo and TripBAM. "Business Travel Direct is growing organically and our new business pipeline is very strong with £10 million of new business already secured in the last quarter," said Julie Oliver, managing director. "We also have a track record of acquisitions with the most recent successfully completed in 2015. We will continue to be active in considering further acquisitions when they are the right fit. That means companies that have the same vision of the future and that are focused on deploying advanced technology." Update Dec 2018: The TMC acquired Uniglobe Preferred Travel in Brighton back in April.
Amber Road (updated Dec 2018 as formerly CTI) is on the acquisition hunt after the Manchester-based TMC sold a majority stake to private equity firm Endless last year. CEO Clive Wratten told me, "We're excited to have an investor who is willing to help us through organic growth and acquisition; scale becomes increasingly important. It's a huge opportunity for us."
Travel Leaders UK has already grown with the acquisitions of Barrhead Travel and Colletts Travel to join its Protravel and Tzell UK brands, as well as a merger with ALTOUR UK with Travel Leaders Group Holdings. Its hunt continues. A spokesperson said, "We focus on high-quality businesses with strong market presence and organic growth opportunities. We constantly evaluate the market for meaningful acquisition opportunities. We have adequate capital resources and will continue to look for businesses that fit or complement our existing model."
Newly-formed Fello Travel, the merged Sandy Row Travel and World Club Travel, is "open to acquiring", CEO Simone Buckley told me. "It would have to be the right fit and likely outside of the UK; we have partners at the moment but when the delivery isn't the same, and with our high service level, it's better to own it."
Update Dec 2018: Key Travel and Dutch-based Raptim Humanitarian Travel announced a merger last month, while UK-based EFR bought Scottish TMC WD Travel