Why Did These Cousins Buy Their Company Back From Travelport?

Who’d want to start a corporate travel agency in these pandemic times? Well, quite a lot of people, it turns out.

Now Locomote’s founders, cousins David and Ross Fastuca, are back in the game having sold, then bought back, their platform to Travelport.

The convoluted story began in 2012. Along the way, Ross Fastuca has told Skift how the pair may have been too early with their real-time booking tool, and how the company “lost its heart” under Travelport — the global distribution company has declined to comment on this statement. But since taking back operational control in January, the Fastucas are ready for a reboot.

To work out how they came to buy back their business at “a Covid discount” — no figures given due to a non-disclosure agreement — Fastuca turns back the clock.

“David and I have been building technology since our teenage years, and been in business for 25 years,” he said. In 2012, they built a “skin” on top of a booking engine for a travel agent in Australia.

It worked well, so the pair decided to resell that to other travel companies. Eventually they were introduced to a bank and a mining firm in Australia, which spent a combined $200 million a year on travel.

Over several months, getting to understand their problems, and talking to other companies, the concept of Locomote emerged.

“What we discovered was that organziations do a lot of different things prior to actually talking to a travel agent. There’s a whole procurement process, and approvals. We didn’t know why they were still using emails, spreadsheets, PDFs, trying to shoehorn together procurement systems. So we pitched them a system that can solve that problem,” he said.

Eventually word got to Travelport.

Taking on Sabre and Amadeus

“We knew Travelport would pay agencies incentives to move from, say, Sabre or Amadeus to Travelport, so we said if we can convince these two large companies to be on Travelport, will you pay us an incentive,” Fastuca said.

Travelport laughed at the idea, and agreed — thinking there was no way the cousins could do it.

But they pulled it off.

The five-employee startup then caught the eye of Gordon Wilson, then CEO at Travelport.

Up until this point, online booking tools for corporates weren’t as established as they are today, with Concur regarded as one of the main players. So Travelport funded Locomote to build the “front end” on top its platform to manage operations, where modules could be plugged in. Fastuca said previously the goal was to find a booking tool to plug in, and there were conversations with Concur, before its sale to accounting giant SAP, but nothing materialized.

Locomote successfully built its interface, and in 2014 Travelport jumped in to acquire 49 percent of the company. “Combined with Travelport, we were effectively an early days TripActions,” Fastuca said.

Travelport wanted to pitch Locomote as a rival to Sabre’s own booking tool, GetThere, or Amadeus’ Cytric. It invested about $50 million into the product. However, while the business model was great for Travelport, it was less so for the founders, because Travelport was happy to give Locomote away to the travel agencies as a means to get them onboard, Fastuca said.

Losing Its Heart

In 2016, Travelport bought the rest of Locomote, with the cousins staying on for a two-year handover. They left in 2018, at which point Locomote had grown to 120 employees.

After they left, Fastuca said Locomote lost its heart, as it had become simply a product within Travelport, while he regarded it as a complete entity on its own

“It got swallowed up. That entrepreneurial flair left,” he said. You could question the cousins’ role during those two years.

“When we left, from 2016 to 2018 we faded away, because that was our role, to hand over.” Fastuca said. “A lot of the staff left. The core platform itself was still quite good, but they couldn’t get that internal sales engine switched on, because they were giving away Locomote. They didn’t see it as a way to make money, it was a cost.”

Around the same time, Travelport was undergoing its own journey and became a private company in 2019. Some of the assets it had acquired — including fellow Australian company eNett — were to be disposed of.

Just before Covid, in January 2020, Travelport approached the cousins. The pandemic put the brakes on a possible sale, but in July the company was reacquired by the Fastucas, with operational control handed back in January 2021.

A Clean Slate

Fastuca believes there’s never been a better time to start a corporate travel agency.

Locomote now has around 50 staff, including many former employees, and plans to “surge” in tandem with the travel rebound, particularly in Asia. “Everyone is on the back foot, wondering how to manage their staff, and redundancies, and we’re waiting for all these amazing people to hit the market,” Fastuca said.

He predicts that Locomote’s original premise — creating an open platform where modules can be dragged in — is more relevant than ever as companies come out of Covid.

It will use content aggregators like Travelfusion, Covid info tool Sherpa, and partner with right agencies for fulfillment purposes in those destinations where it wants to expand.

“Hopefully we can be a catalyst, so some of these other travel companies and startups can build modules within Locomote, to help them gain presence, or take advantage of our customers,” Fastuca said.

He said where his rivals may come unstuck is their intention to become the “be all and end all” for travel for customers, and questions their use of the word “platform.”

“For me, a platform is where you let other people create, build and integrate,” he said.
“Facebook is a true platform. The travel industry likes to throw the word platform around, without it being legitimate. A website with a lot of buttons that single sign-on to other companies isn’t a platform.”

For example, many travel agencies are expanding into expense management, but this isn’t a route Fastuca wants to take, although he cites Expensify as one company he respects.

“A lot of travel companies are moving toward expense, becoming a fintech company. But it’s ok to be a really good travel company, we don’t want to lose our focus,” he said.

He believes that within five years, Locomote will rank alongside the likes of TripActions and TravelPerk as the biggest agencies in the world, with “traditional companies” such as CWT, BCD Travel and American Express Global Business Travel falling by the wayside.

“The big guys come with lots of legacy. They’re trying to ‘Frankenstein’ different systems together. They’ve got 10 different legacy systems they’re trying to stitch together,” Fastuca said.

However, Locomote’s challenge will be to stand out in what’s becoming a crowded marketplace. In 2016, Skift described Locomote as a “seedling”, noting its USP was the fact it could let business travelers communicate with it in real-time, and it had a partnership with Allianz to sell travel insurance.

What’s unique about the company today?

Fastuca said the track record is its calling card, with eight years of software development and an ability to scale. “We know we can handle a $100 million company from the get go, it’s not something we have to build as an enterprise version,” he said, perhaps referring to rival TripActions’ announcement last year it’s building an enterprise edition.

Fastuca added Locomote works with the likes of Deloitte and Red Bull, and won the account to manage travel for support workers platform Hireup off TripActions.

Based in Melbourne, Locomote might have an advantage to capitalize on any travel bubbles or corridors bubbles to emerge between other countries and Covid-free Australia. But while it represents a new breed of corporate travel agency, there will be others waiting in the sidelines that have even less of a legacy than Locomote.

“We’re talking about creating this Australian ecosystem of cool travel companies that are resurging,” Fastuca said.

These are probably the companies that Locomote now needs to closely watch.

CORRECTION: A previous version of the story incorrectly stated human resources company HigherUp as Locomote’s client. This story has been corrected.