American Express Global Business Travel's UK VP and general manager Anthony Drury talks to Paul Revel about control, compliance and crystal balls
Q American Express predicts a rise in business travel prices; compounded with the economic climate, how do you see this affecting behaviour?
A: It is going to change behaviour - people have got to start buying smarter, and making sure they're getting some kind of return on investment. But prices have been going up steadily over the past couple of years so it's not a huge step-change. In conversations we've been having with our customers over the last couple of months, they're looking at how they can squeeze their budgets in light of the economy. We're helping customers look at a variety of ways they can meet their targets. Policy and compliance are key - they've been the hot topics recently. Businesses need to adjust travel policy to suit the climate, and change behaviour inside their organisations. The last thing anyone wants to see is the downturn being compounded by everyone stopping travelling - it's about doing the right kind of travel, and how they can maximise value from their spend, whether consolidating to one agency or rationalising spend through one group of suppliers. There are many channels through which you can maximise value from budgets.
Q With the rise of new forms of online business travel services, do you see the model for the travel management company (TMC) changing?
A: From the hotel-booking perspective, to have a fragmented supply chain is a concern in my mind. You can't supply the level of security, tracking and monitoring/reporting processes you can from a GDS [global distribution system] perspective. Aggregation of content is important - fragmenting your booking channels is not best practice. We've been talking to, and educating customers over the years about consolidating one market and one channel - I think the more fragmented the booking process, the more risk involved.
Q What's key for your business in 2012?
A: Mobile technology and connectivity is the flavour for this year. One app rather than many is the key - one that covers every part of the supply chain is critical. The mobile product we launched earlier this year is being rolled out across the customer base. The next wave is our mobile communications management system. Lots of our customers already use our Trackpoint system, which locates travellers via their PNR [passenger name record], and the next stage is visually tracking a traveller via his mobile. It's really about employee security: travel managers can track exactly where a traveller is in an emergency. We're starting to roll out this system in Q1 this year. We're also seeing further development of tools such as our customisable pre-trip auditor, incorporating duty of care and compliance aspects. It can be configured so that if, for example, you're flying a number of people to an oil rig in Russia, it can automatically flag-up if that number means security, insurance or tax implications for your company. It's about more than just authorisation to travel - it's driving compliance. It's utilising data to the next level. That's why I'm concerned about fragmented supply chains: you miss out on these benefits - data capture and utilisation.
Q Do you predict changes in where people from the UK and Europe will be travelling to do business?
A: Our forecast highlights Latin America and the JAPAC [Japan and Asia-Pacific] region - we expect this growth to continue for a couple of years. From a niche perspective, we're seeing the mining, oil and gas industries driving increasing demand into unusual locations around the world.
Q Many travel buyers still cite transparency in commercial agreements as a concern - what's your view?
A: In the years I've been with Amex, we've always had a transparent model, so I don't see it as an impact. Look at the majority of our customer base - they're large corporations, and we have a transparent model with them. It depends on what financial model they've asked for in the RFP [request for proposal], whether we've built commissions into their model, what's passed back ... Regarding mark-ups, we leverage our buying power on our net fares for the middle market. The bulk of our travel is booked on corporate card platforms, which allows them to be transparent.
Q What's your take on controlling ancillary fees?
A: It's about how the customer deal is constructed. A customer who has a strong controlled programme has an understanding of what the ancillary fees were in the previous year. You can build them into a simplified model if you have the quality of data. Customers have been asking for better prices and unbundling, so we've all gone down that route - with that comes the paid-for service model, driving up the auxiliary fees. Again, improving employee behaviour reduces fees. Benefits we can offer include streamlining reconciliation - integrating expense management systems into your process so that some auxiliaries can be coded to automatically flow through your files from Amex cards.
Q What are the biggest challenges facing American Express and the business travel community?
A: The biggest challenge is the crystal ball we haven't got regarding the economy. It's how we help our customers manage their travel budgets in those uncertain conditions, and maximising the spend they do have.
Q So what advice are you giving your customers in these testing times?
A: The control aspect is becoming really dominant - controls at point of sale, and looking at policy and adapting it to suit conditions. This involves changes to travel management inside your organisation. There's a variety of levers customers can use to reduce spend. Going online to book has a double impact: it saves on fees; and the online booking tool controls content. Then there's looking at your policy regarding who is flying in premium cabins and how it's applied across senior management. There's looking at consolidating your data and spend, and seeing where deals could be different or better. Also, it's your traveller behaviour - every day we're helping travel managers educate their travellers and change behaviour. The more effective we get at managing interaction between the traveller and our phone centre or online booking, the more effectively we can drive the programme. If I can speed up the booking process because the traveller is more aware, I can offer the savings back to the customer. On the flipside, we offer services like our international rate desk. It has our most experienced consultants working on very detailed multi-sector global itineraries. The content is changing all the time and the consultants are looking at content changes and how airlines are managing their yield - they can find deals saving the customer 10-20 per cent, a significant amount on a $20- 30,000 fare. We're seeing this service being used increasingly.
Q American Express recently formed a partnership with events firm WRG in the UK, and has similar deals elsewhere. Can you tell us about Amex's strategy for the meetings, incentives, conferences and exhibitions (MICE) market?
A: We've successfully integrated our traditional booking processes with our meetings and events business - from 10 people on a plane to Turkistan to fully integrated end-to-end MICE bookings, from sales conferences to car and product launches. The partnership with WRG gives us a creative edge. We are setting some really aggressive growth targets for MICE business in 2012. We've invested heavily in back-office technology to streamline our processes, and front office tech for our customers to use, such as managing pre-registration for events.
- Anthony Drury
Anthony Drury joined American Express in 2002, and has held a range of sales and senior management positions around the world within Amex. In summer 2011 he took up his current role as UK vice-president and general manager of American Express Global Business Travel.
Prior to this, Drury was VP and head of sales for Europe, and before that for APAC.
He has a corporate sales background in IT, travel and tourism, engineering and financial services. Drury has held a range of positions, including general management, sales management and technical product specialisation. Before joining Amex, he held a variety of roles with Online Advantage, Fleet Systems and Alstom.
When he was appointed to his present role, Drury and his family relocated from Sydney and now live near Guildford.