Travel management is a global business, albeit one heavily dominated by a handful of players with the scale to operate worldwide and negotiate the complexity that comes with sending travelers around the world.
For Australia’s Corporate Travel Management, the strategy is to leverage its strength in Asia Pacific to create a more valuable value proposition for U.S. and European companies sending travelers to the continent.
The company’s 2018 annual report, which was released last week, bears out the success of this plan. Since the 2015 fiscal year, Corporate Travel Management’s adjusted earnings before interest, taxes, depreciation, and amortization has surged from $36 million ($49.1 million Australian) to $92 million ($125.4 million Australian).
“In a global travel program, for any American company, usually Asia is the pain point, and it’s something we do very well,” Pherous told Skift earlier this year. “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.”
Breaking down earnings by region, the company’s U.S. and European operations are closing in on its Australia and New Zealand operations.
Now 70 percent of the company’s profit comes from outside of Australia, a huge shift from its traditional mix from just a few years ago.
|Corporate travel management FY18 Performance (in $ U.S.)|
Corporate Travel Management has also been an active buyer in the marketplace, acquiring Montrose Travel and Travizon Travel in the U.S. along wide a variety of smaller players across Europe and Asia, such as Hong Kong-based Lotus Travel.
The success of these purchases has allowed it to grow internationally and increase transaction volume in markets where it only represents part of a percentage of the travel management market. No wonder the company is still looking to buy.
Check out the full earnings report below.