CWT 007, the three year plan put forward by Hubert Joly, Carlson's new president and worldwide chief executive, envisages major changes in the global TMC. Some are predictable and perhaps long overdue but others come as a surprise, if not in their content then in their size.
As an outsider - Mr Joly arrived in the world of business travel management this summer from the more fashionable world of Vivendi International - his first impressions were how fragmented this new industry was.
Quite accurately, he predicted more consolidation and we can be sure that CWT's recent buying spree is not over. But while one of his aims for the next three years touches on this - the successful integration of the new acquisitions - the other aims do not.
First up is his vision of hotels and meetings as the “next frontier.” This is an alluring prospect as Mr Joly sees it. Hotels are a generally profitable if fragmented industry which TMCs have not focused on, unlike airlines.
Many companies have been attempting with some success to integrate their meetings spend with their other travel spend for several years. PricewaterhouseCoopers is a case in point where much effort has been put into this. This process is still at an early stage and unlikely ever to be fully achieved.
But hotels are a different quarry. Mr Joly says that at most 40% of business goes through agents. Heather Blaseby, Le Meridien's vice president for worldwide distribution puts the figure at 20% for her hotels - a figure which has remained static for ten years. (see news story).
Hotels, wedded to their own ideas of how to maximise their profits seem far more reluctant to be pinned down to corporate deals than airlines. This may be Mr Joly's first big challenge. Wisely he gives no predictions.
A second aim of the CWT 007 plan is also as predictable as it is essential if TMCs are to grow their client base: increased penetration of the Mid- and SME Market. TMCs, large and small have been pursuing this market for years, again with varying success. It is a market worth many million of Euros but difficult to evaluate.
In Spain Mr Joly said CWT had only 12% of the market share of companies spending less than €5m. It rose to 20% in France, its home territory, but sunk respectively to 7%, 5% and 2% in the UK, Germany and the US.
It is not likely that figures for other major TMCs are much different. Mid-market and SME often feel much more comfortable with smaller TMCs rather than global giants - they can be individual companies there rather than part of a grouping. Again Mr Joly has set himself a great task.
But it is the last of his major goals that commands attention. Mr Joly wants by 2007 to alter quite significantly the major streams of income that a TMC now enjoys.
By his own figures, CWT currently gets up to 95% of its revenue for transaction processes, and up to 5% from high touch assistance services.
By 2007, he wants to see the transaction figure down a massive 35% to 60% at most of CWT revenue. High touch assistance services revenue would jump to 30% and, a newcomer, consulting, programme management and outsourcing would come from nowhere to up to 15% of revenue. This is some change.
On the high touch assistance services, Mr Joly mentioned services like getting stranded passengers home, passports and visa services and security. “We must challenge ourselves to continuously re-invent ourselves and find new streams of revenue,” he said.
On consulting, Mr Joly cited as his model IBM. In this company, most of the income came originally from providing computer equipment. Now most of its income comes from its consulting services.
“We must define new services and have the confidence to charge for them. At the moment we give away consulting services free to get transaction fees. The customer really values our expertise but it is us who lack the confidence to charge for these services,” he said.
With corporates in many countries just settling to the idea of paying transaction fees to agents for services which previously came “free”, courtesy of commissions, this bold suggestion may be a step too far.
It certainly promises CWT an interesting ride in the next three years.