Capita pulled off the biggest deal in business travel this year with the purchase of Expotel. Managing director Trevor Elswood talks to Rob Gill about the impact of the acquisition and the TMC’s plans for growth
What was the thinking behind the £16 million acquisition of Expotel?
Buying Expotel makes us the fourth largest TMC in the UK – the total transactional volume (TTV) of both businesses last year was around £525 million. Expotel was really a natural acquisition for us because ultimately it gives us more leverage and scale to build on. It gives us more air and more rail which will give us the leverage to get better deals for our customers. It has a phenomenal venue and events management business which specialises in high-end events. Expotel also gives us a footprint in Scotland for the first time – we feel that you have to have a presence in Scotland. It’s also good from a customer profile point of view as Expotel is strong in the SME market and public sector, which is complementary to our own business mix where we have a lot of large PLC clients.
How do you plan to integrate Expotel into your existing business and will you maintain all three brands?
The way the businesses are aligned and the similarity of the core products means that we are well-equipped to integrate quickly. We have already been through the process with BSI over the last two years. It’s not just about integration as we also want to recognise the value and difference of the organisations. But our journey ultimately is to be one business and we want to simplify everything for customers and suppliers. We think this will be a natural journey but I don’t know how long it will take – we will get there when we get there. We now have nine sites in the UK and 900 employees across the group – we have added around 400 people with Expotel as well four sites at Stockport, Leeds, Swindon and Glasgow. We intend to keep these sites as they all have their own specialist areas of expertise and I see them as centres of excellence for these products.
What will Expotel add in terms of new services which you did not already have with Capita and BSI?
One area is venue and events management which Expotel is very strong in. They manage the events and have the global logistics to find the venues and run the events. We want to use this expertise to broaden and deepen the number of high-end events we manage. For BSI and Capita we are friends of procurement – everything we do is about accountability, value, cost reduction and transparency. We now want to grow our events management on the back of that trust we have established with clients. Expotel is also very good at supply management – particularly in venue finding and the accommodation sector – which we can use to add more value for the customer. They also have very products on subjects such as CO2 reporting, duty of care and corporate social responsibility. They were more advanced than us in these areas so now we can roll them across the whole business.
How will the enlarged business continue to differentiate itself from other TMCs?
We see our specialism in certain areas, such as air, rail, meetings, hotels and events, as our point of differentiation. For example, we are an enormous booker in rail with more than £100 million of rail tickets per year. Clients can buy a single product such as hotels or venue finding, or the whole package. It’s totally flexible as a customer can buy other services when they want to. During the last two years, a lot of BSI customers have moved from buying one or two services to buying all of our travel services. Everything Everywhere (formerly Orange and T-Mobile) is a good example – they used to be a big hotel and venue-finding customer, but now they are buying rail and air products as well. We don’t see ourselves as a traditional TMC as we have evolved through these specialist routes.
What options do you offer buyers in how they pay for your services?
It’s across the range of options – from commission retention, which effectively makes it a free service, to management fees and transaction fees. We also have all sorts of hybrids to suit the client – there is no “one size fits all” approach. I don’t think you have to be prescriptive with the way you charge. But we promise that it will always be a transparent model no matter which option the customer chooses.
Capita currently caters primarily for UK business travellers – do you see this changing?
We are just operating in the UK and our strategy is to provide global travel for UK-based employees. Our core focus is just being great in the UK. Although some of our clients are encouraging us to think about booking travel for their offices outside the UK. This is something we are looking to build – it’s definitely an aspiration for us.
What’s your feeling about the state of the business travel market at the moment?
There’s a lot of doom and gloom but, for us, growth has been phenomenal As a business we are growing market share and making a profit – it’s a successful business. Of course it’s not easy and the reality is that the environment is challenging. But it is exciting for us – particularly with the acquisition of Expotel – we are retaining staff and customers, as well as gaining new ones.