Shannon Hyland was appointed as president and CEO of Radius in 2013. He joined the global travel management company network as chief financial officer in 2008. Hyland has been in the travel industry for more than 20 years. He has held CFO roles at online travel booking firm Groople, Mark Travel and Galileo, and senior posts at United Airlines and Continental Airlines. Here he speaks to BBT editor Paul Revel.
Q: Do you see Radius as a traditional consortium of TMCs?
A: We don’t, not anymore. For the first 30 year’s of Radius’s existence, it was a classic consortium model. Then in 2007, a number of the members got together and invested capital into Radius, and said: ‘How do we take this beyond a traditional consortium and make this a hybrid, a new model TMC?’ The answer was, we build an infrastructure and hire resources – so that we have a centralized selling system, and our own multinational sales team. So we could develop a technology offering that aggregates all the agencies’ data, and offer that aggregated data into a reporting and analytics package to multinational customers. That was the start of us evolving from being a consortium, to a TMC that leverages a network of agencies all around the world.
Q: Do all those independent agencies in Radius still have their own identity?
A: They totally do, and in fact they have equity stake in us. They’re the ones who made the investment.
Q: So how would an agency join Radius?
A: Today, we would evaluate what market you’re coming from and whether it’s a good fit for Radius – whether it’s a market that we need to have an agency in. There’s a couple of markets where we have multiple agencies – the US is one. It’s such a massive market, really more like four or five different countries. So we have multiple agencies in the US because it makes sense. And in China we have two agencies, that’s about it.
Q: If I’m a client, looking for global support for my travel programme, how do I choose between the Radius network model and one of the big global TMCs?
A: Some companies will like that one single brand, such as Carlson or Amex, and it’s a good fit for them. With our model, we have great agencies around the world. In China we’ve got C Trip – it’s one of the largest agencies in the world, a multi-billion dollar agency. We have great local agencies that know their market better than anyone – you’re guaranteed that local market expertise. In India we’ve got Cox & Kings – they’ve been servicing travellers for over 200 years.
India is one of those markets where the dynamics are different – a Western off-the-shelf solution won’t necessarily be the best one. Our agencies know their markets. And they’re not dependant on some corporate umbrella financial arrangement – they stay in business because they provide great service.
But Radius can aggregate all of these agencies’ data, and combine it into an analytical suite of reports for you. So you can get the best of a globalised programme and the best of local service.
Q: There’s a lot of talk at travel industry events about demonstrating ROI [return on investment] on business travel. What are the indications from your clients on this?
A: I’ve been a CFO [chief financial officer] for a large portion of my career. I think when CFOs look at returns on travel programmes, there’s a bit of a soft acceptance of the actual ROI calculations. It’s not quite as tangible as a capital project. But the CFO wants to see it – they want to see that you’re getting some bang for your buck from travel. And they’ll still question whether or not you need to send four people to a meeting. So I find that they are interested in having that ROI conversation, but they still want to scrutinize the expense component of it. ‘But can we optimise it even more? Okay great, you gave me that benefit, but could you have given me 20 per cent more by spending 10 per cent less?’ – it’s in their DNA.
In this environment, travel managers and TMCs are in this together. We’ve got to make sure we’re constantly demonstrating our value – there’s always going to be pressure.
Q: How do you demonstrate that value?
A: I think it’s really important for TMCs and travel managers to make their organisations more aware that the TMC does a lot more than just aggregate the data and leverage purchasing power. In today’s environment, duty of care is a massive issue. 12 years ago it wasn’t. All of a sudden, coming off the back of September 11, 2001, it started becoming an issue. It’s an interesting, tricky subject. You want to make sure you have sufficient flexibility and great content for your travellers. But at the end of the day, the corporation has the liability.
We had travellers in Japan after the earthquake and tsunami. Hotel rooms became incredibly scarce, reservations expired, the airport was shut down. We have a very large agency in Japan, HIS, who jumped into the situation. HIS has terrific relationships with the hotels, because of its purchasing power, and secured all of our traveller’s hotels. Nobody wants a global event like that to happen – but it’s important to be prepared.
Q: Do you think the TMC model will change over the next few years?
A: I think TMCs will end up being more retail-driven than they are today, an unbundled pricing model. Clients will buy services a la carte – they’ll pick and choose. And I think clients will demand a partnership from a TMC, to help them evaluate whether technology components are going to work well in certain markets or regions of the world. The TMC is in a very interesting position of being able to help evaluate whether that product is right for them. That kind of consultative partner approach benefits all parties.
TMC services, from a buying perspective, have been pushed more over the last several years to the procurement department. And so we talk about being commoditised on price – it’s natural for a procurement department to do that.
Q: Should companies view TMC services as a commodity?
A: When it sits in procurement, it benefits the CFO to drive the price down as much as possible. But they often end up with a level of service they’re not satisfied with. I think TMCs must do a better job of educating corporations, CFOs, procurement people. It’s not just another product off the shelf. I think we’ve done ourselves a disservice as far as underselling exactly what we’re bringing to the table. We could do a better job of that – if we do a better job at explaining the complexities associated with travel and the benefits, it’s in everyone’s best interest.