Now that Hogg Robinson Group is out of the picture because of a merger, Australia's Corporate Travel Management is one of the largest public corporate travel management companies in the world. It's setting its sights on expansion in the U.S., but entering the market has its challenges.
The race is on across corporate travel to offer a standard level of service regardless of the region a traveler is visiting.
For U.S. companies, this means looking to Asia, particularly the red-hot Chinese business travel market. But for travel management companies based in Asia-Pacific, the last few years have seen continued growth in North America as the worldwide business travel has become a powerful force.
Australia’s Corporate Travel Management, in particular, has been looking to parlay its success in its home region into a larger global footprint. With its U.S. operation based in Colorado, the company has been slowly ramping up its North American business.
“It’s funny being a global company,” said Jaimie Pherous, founder and managing director of Corporate Travel Management. “They tend to fail, particularly because they try to make everything vanilla and standardized, and usually, they over-govern, so they lose that ability for local leadership. They don’t empower them to make agile, quick decisions, which is what you need.”
Skift spoke to Pherous about the company’s ambitions in the U.S., the challenge behind building a truly global travel service network, and why corporate travel giants are so bad at building technology solutions that really work for travelers.
This interview has been edited for clarity and length.
Skift: Your team is known for its prowess in Asia-Pacific, but over the last few years you’ve been looking to break into the U.S. corporate travel market. What challenges are you facing?
Jamie Pherous: It’s pretty hard to challenge that anyone’s growing more than we are, and I think more than that, we’re doing it differently. We’ve got a global network that’s underpinned by not just the technology, but it’s underpinned by really good personalized service, which is where we’ve come from.
You need both because [if you’re serving a large company], and the technology’s great, with a point-to-point staff and the technology can be a friend in terms of enhancing service, but when things go off the rails, you need someone who that you can rely on. After that first change and other times before and during a trip, it takes a lot of smarts and know-how to do those things properly.
Skift: How do you look at the challenge, then, of developing the right technology that can work across all these different regions?
Pherous: To me, technology’s one thing, but whatever the customer sees [is very important too]. You don’t get that scalability and high service, so the idea is that if the technology is sped up, the better for the service. For example, push notifications. You’re creating time for the travel agent to really have time for that service, when for a customer that can make or break your trip. That’s something I think we’ve gotten right [in Asia-Pacific] and we’re working really hard at it now in three other regions of the world. We’ve got a long way to go, especially in America, you know?
Skift: Corporate travel has always lagged behind the consumer sector in terms of technology. How do you approach that reality?
Pherous: Three things. It’s got to be consumer-friendly, which means it shouldn’t need any training. You don’t need training to use Expedia, do you, for example? It’s got to be seamless [to use] and you’ve gotta build it for customers, so we’re very strict on not copying our competitors. If you listen to our customers, the staff will do what they really need. It’s something that’s worked really well for us, and it can be the most mundane little thing, but until they’re put out there for customers, you don’t realize how valuable they really are to a much wider range of customers and businesses.
Skift: You run a big global company, so that usually means a lack of innovation. Is it hard trying to drive innovation when steering such a big ship?
Pherous: Yeah, I mean, it’s funny being a global company. They tend to fail, particularly because they try to make everything vanilla and standardized, and usually, they over-govern, so they lose that ability for local leadership. They don’t empower them to make agile, quick decisions, which is what you need. You need a service business these days. You’ve got different cultures, for example, in America, we’ve got a demand for a more concierge-type feel from the sales side.
Whereas, in Asia, it’s all about chat. They want WeChat and things like that which, they’re poles apart [from the U.S. service trend]. What I’m trying to say is that you need to underpin with the key things, like the tools, the reporting, and all that, but you need a localized solution for what that market needs and they’re all very, very different. I think this is a challenge for [U.S. travel management companies]. Why we expanded globally is that we had great customers, but our barrier to growth was sometimes there was a mandate to go global.
Skift: North America is a crowded corporate travel market, yet your company has been investing in the region. What can you bring to the table that others can’t, and what challenges have you faced?
Pherous: Sometimes you can’t [service everyone] in a great way. And secondly, sometimes, you can’t win customers. You’ve got to be able to service them, so [if you can’t] it forces them to go somewhere else, and today, that’s what they have as a solution. Whether it’s a good or bad solution, I don’t know, but we want to clearly outperform in the small-and-medium-sized space along with corporate. We’re looking at that regional and global service.
The advantage we have is that we’re building off a new base and when people come to work at CTM, we say, “You can come in and do your job, but you’ve actually got opportunities [to create new processes]. Put your hand up and we’ll automate it.” Same thing, whether it’s in technology or sales. If you think of an idea the customer wants, that’s gonna solve a problem, we’ll try to find a solution.
Skift: Meanwhile, your team has been in China for a while. How do you look at the growing Chinese business travel market?
Pherous: Being in China can be tricky because the laws can change, and so you’ve gotta be there, but we’ve got a handle on Asia. We’re in a number of countries, all the way through China and south to Australia. It’s a jewel in our service. Where we see that is major expansion and it’s where we’re growing, and again, why I think we do so well … We’ve got local leadership. We’ve got an integrated business that understands a local culture and that’s been a massive advantage for us.
In a global travel program, for any American company, usually Asia is the pain point, and it’s something we do very well. It’s because we come from that region, and by starting in the most complicated region, most complex region [we can make advances in others]. We see that skill as a long-term growth area for us, and again, we’ve got the dollars in sales. We’re not small, but we’ve got a long way to go there, as well, because the market is so complicated.
Photo credit: While U.S. travel management companies are trying to break into Asia, rivals based in Asia-Pacific are doing the same in North America. Corporate Travel Management