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Skift Travel News Blog

Short stories and posts about the daily news happenings around the travel industry.

Business Travel

Flight Centre’s Agency Supergroup Adds Business Specialists

2 years ago

Flight Centre Travel Group’s new invite-only agency member group has expanded.

Link Travel Group, which Flight Centre owns the majority of — alongside Goldman Group and Spencer Group of Companies — launched in May this year. The joint venture aims to combine forces of individual agencies to leverage buying power, while providing access to its own product and distribution capabilities “at a time when considerable change is taking place.”

In other words, staffing shortages persist, and airlines are gaining an upper hand in selling directly, meaning fewer kickbacks.

Since May, the new group has added Reho Travel, Platinum Travel Management, Entourage Travel Group, Mobilise Travel, Mosman Travel and Mary Rossi Travel.

However, this month it announced Eden Corporate Travel had joined, according to reports. Travel Beyond Group will join in 2023.

Flight Centre has been on a roll of late, growing its corporate business, while last month it was forced to quash rumors of an acquisition.

Its home base of Australia is also poised for recovery, after more than two years of tough trading conditions. Rival Corporate Travel Management even managed to make a profit this year.

Business Travel

Flight Centre Travel Group Plays Down Rumors It’s Buying U.S. Agency Altour

2 years ago

Flight Centre Travel Group has rebuked “media M&A speculation” that it is poised to buy U.S. travel management company Altour.

“Flight Centre Travel Group (FLT or Company) is aware of media speculation in The Australian newspaper claiming FLT is considering the potential acquisition of a corporate travel business in the USA,” it said in a statement to the Australian Securities Exchange on Aug. 30.

“While it is company policy to not respond to media speculation, the company has had, and continues to have, various discussions with a number of parties regarding strategic opportunities.”

Last week the group boasted its FCM Travel division was the only global alternative to the legacy travel management companies. However, the intention to consider acquisition opportunities to complement organic growth was outlined in the company’s recent results, where it reported a loss of $127 million for 2022.

A U.S. division would make sense to expand its footprint. Australia’s Corporate Travel Management, for example, said it reaped the benefits of its own U.S. acquisition, Travel and Transport, in its most recent results that saw it record a full-year profit of $41.4 million.

Altour is part of the Internova Travel Group, which is owned by Certares, which is also an investor in American Express Global Business Travel, via a group of investors it leads. Amex GBT listed on the New York Stock Exchange in May this year.

Skift contacted Internova for comment.

Business Travel

TripActions Secures One of Its Biggest Clients Yet With Unilever Win

2 years ago

There’s a reshuffle taking place, as corporate travel agencies battle it out against each other for business coming out of the pandemic. Now TripActions claims it has secured one of its biggest enterprise customers to date, poaching the consumer goods giant from a major rival.

The startup said it has been selected by London-headquartered Unilever, which has nearly 150,000 employees in 77 countries, to “modernize and optimize” its travel program.

Rival American Express Global Business Travel recently revealed it had secured JP Morgan as a new client, while the CEO of Australia’s CTM claimed it had returned to profit thanks in part to winning customers from its rivals.

TripActions said its selection was linked to Unilever’s “future-fit” program, which is designed to help its employees “adapt to the impact of evolving technologies and ways of working.”

Unilelver, which has 400 brands, also wanted to make its employees more aware of their carbon emissions when traveling, TripActions claimed.

“Unilever is committed to ensuring that our employees are empowered with the right technology and lean processes that help them to thrive in this highly digital future of work,” said Mithlesh Singh, Unilever’s global travel process, employee experience and transformation manager.

Business Travel

Corp Travel Agency CTM Finally Returns to Yearly Profit

2 years ago

Australia’s Corporate Travel Management has managed to convert the recovery in global business trips into a small profit, after more than two years of tough trading conditions.

It was boosted in particular by winning large accounts off rival agencies, according to CEO Jamie Pherous, and three pandemic-era acquisitions, the most recent being 1000 Mile Travel Group, an all-share transaction worth $1.3 million carried out last month.

The Brisbane-headquartered agency reported a 2022 full-year profit of $41.4 million on an underlying earnings before interest, taxation, depreciation, and amortization (or EBITDA) basis. That’s for the 12 months up to June 30, 2022, and follows total transaction value of $3.51 billion — more than three times the $1.12 billion recorded in 2021. Revenue was $269.1 million.

In 2021 it made a loss of $5 million, on an EBITDA basis.

New Wins

Speaking during an earnings call on Tuesday, Pherous said new clients were contributing to its results, with those clients having moved from its competitors, rather than previously having had unmanaged travel programs.

“We’re winning a lot of business and most of it’s off peers,” he said. “A lot of peers are in difficult positions and can’t reinvest in technology or people at the moment.”

In its 2022 first half, which covers the six months to Dec. 31, 2021, it won $3.27 billion of new corporate business. That amount equates to how much those companies spent on travel during 2019.

“We’re one of the very few (agencies) that can demonstrate we can convert recovering activity into revenue and profit before tax,” he added.

The CTM boss also played down any concerns over staffing levels. It recruited 950 employees in the 12 months, and more than doubled staff in its recently acquired Helloworld division from 125 to 285 people.

Pherous also said that CTM had an “out of the box” recruitment strategy.

“We’re finding people from outside the industry, and put them through our academy. Our senior executives talk about their youth and exuberance,” he said. “We’re nearly at the resources we need. We think it’s critical, we’re not in that race to barter and bargain for staff.”

Business Travel

3 Questions That Need Answering at This Year’s Global Business Travel Association Convention

2 years ago

This is the main event. Of course the Global Business Travel Association has held previous conferences in San Diego before at the city’s waterfront convention center — but never after such a drawn-out downturn.

The association did manage to squeeze its annual convention in last year, in Chicago, but mostly minus the European contingent who were barred from traveling to the U.S.

So it’s back at full pace, with an expected 4,500 delegates here over Aug. 14-17 (down on the usual pre-pandemic 7,000, but this year organizers claim 1,000 buyers.) The mood is mostly optimistic, with delegates surprised at just how little airline and airport disruption there was, and happy to be able to network again; it’s the first time for many people in years.

But again, unlike previous conventions, has there ever been so much uncertainty about what’s ahead? There’ll be some more clarity on Monday, with the association publishing its Annual Global Report & Forecast 2022-2026.

In the meantime, here’s a few questions.

Is This Still a $1.4 Trillion Industry? This was the amount spent globally on business in travel in 2019. That figure is still quoted by travel companies in presentations and still seen as a universally accepted benchmark. But it’s time to update that. The real answer is no one really knows, not just because the pandemic disrupted travel over the past couple of years, but because it’s yet to settle down into measurable patterns, thanks to that hard-to-define mix of business and leisure travel, remote working and “company retreats.” It may take years.

Spending was forecast to have halved to $694 billion in 2020, based on its 2021 release of the Outlook, with slow growth until recovering to above more than $1.4 trillion in 2025.

The fact is it could be way more than $1.4 trillion. We’ll have some more concrete figures when we get our hands on the 2022-2026 forecast, published Rockford Analytics, on Monday. In particular it will be interesting to see the methodology. Which links to the next question…

Is a Recession Coming or Not? This convention brings together suppliers and travel buyers. It’s the ideal setting to test the mood regarding future booking levels. In a recession, marketing and travel tend to get cut the deepest. So how are those forward bookings looking? Are the tech companies, who are already slowing or freezing hiring, cutting back further on travel spend? How are budgets shaping up? Airlines and hotels may be reluctant to share such information, but corporate buyers may have some clues. Of the 1,000 travel buyers in attendance, they’re representing 555 companies, of which 324 are new for this year’s convention.

Will Company Retreats Go Mainstream in 2023? With remote working and vacant offices a fast-growing trend in 2022, will offsites, onsites, retreats and the like make up for any shortfall in traditional business travel. Pampering retreats don’t come cheap for the more global organizations, so offer airlines a valuable source of revenue. The internet is rife with LinkedIn-style guidance on how they should run their retreats, and how often, but hopefully travel managers from the bigger firms like Cisco and PayPal who are gathering over the coming days in San Diego will offer some clarity.

Business Travel

Corporate Lodging Platform HRS Buys Expense Startup PayPense

2 years ago

Corporate hotel booking platform HRS has bought PayPense, as it pushes further into expense management.

Terms of the deal, announced on Thursday, weren’t disclosed, but the acquisition follows its purchase of billing company Itelya in 2021.

Staff at Germany’s PayPense will officially become HRS Pay employees when the acquisition formally closes in August.

Interestingly, HRS now describes itself as a “global corporate travel and payment technology platform.” HRS, which stands for Hotel Reservation Service, said buying PayPense enhances its “growing compilation of efficient corporate payment offerings.”

PayPense is used by companies to let employees use digital payment technology to pay for all work-related purchases. That helps ensure compliance to budgets while also capturing relevant data for auditing, steering and even sustainability metrics, the company said. Using supplier and localized data, PayPense can capture carbon emissions of individual expenses.

“With the full integration of PayPense, our complete end-to-end spend management platform provides unmatched visibility of level-3 data, multi-category invoice digitization, and superior VAT reclaim automation — all available globally via any payment provider,” said said Kurt Knackstedt, chief growth officer at HRS Pay.

Business Travel

Uber’s $30 Billion Quarter Shows the Travel Recovery Is Well Underway

2 years ago

Taxi tech company Uber has just recorded its busiest quarter, with gross bookings reaching an all-time high of $29.1 billion in the three months to June 30, 2022. That number’s up 33 percent on the same period last year.

However, losses prevail. Uber posted a net loss of $2.6 billion, with a $1.7 billion net headwind relating to its equity investments, mostly tied to the revaluation of its Aurora, Grab and Zomato stakes. The net loss also includes $470 million in stock-based compensation expense.

For its first quarter it reported a net loss of $5.9 billion, so the momentum is there, particularly from its business travel division.

Overall, trips during the quarter grew 24 percent year-on-year to 1.87 billion, or 21 million trips per day. Revenue grew 105 percent to $8.1 billion, compared to the 2021 first quarter. There was a slower pace of growth for its food delivery unit though, where gross bookings grew 7 percent year-on-year to $13.9 billion.

That may be because fewer employees are ordering takeaways, and instead jumping in an Uber to get to the office. Uber for Business revenue almost doubled in the quarter, growing 105 percent year-on-year to $8.1 billion.

Managed Uber for Business, its “actively managed” portion of the business through Uber’s account managers and sales team, represented 29 percent of Uber for Business’s gross bookings, compared to 25 percent in the second quarter of 2021.

“We’re really selling to significant enterprise customers out there, both in the tech space and the non-tech space,” said CEO Dara Khosrowshahi during an earnings call on Tuesday.

“A lot of these enterprises, some of them are going back to returning to office, some of them are not … the champion use case that we’re seeing with U4B is essentially the business traveler getting out on the road again. And obviously, a sales call over Zoom is one thing, but if the salesperson comes in to see you in person, it gives a different impression and we’re seeing our U4B clients invest in getting their teams on the road.”

Airport traffic was also recovering, growing 139 percent year-on-year, and 49 percent on the first quarter.

The results came out just a day before it launched Uber Travel in the UK, which includes a tie-up with Omio.

In June, Uber for Business said it was taking steps to make it easier for travel managers to nudge their organizations into more sustainable modes of transport, including price-matching Uber Green trips against UberX.

Airlines

Heathrow Airport Gets Caught Up in Another Storm

2 years ago

Airports can do no right at the moment, caught between passengers baying for blood and airlines that just want to fly people.

On Friday Frankfurt Airport became the latest hub to cut flights in a bid to ease delays and cancellations.

But London’s Heathrow, which is the UK’s biggest airport, is under fire for taking action it hopes will improve operations.

As Emirates rejects its passenger cap, one UK-based association has called Heathrow’s plan an “outrage.”

“The Heathrow passenger cap is an outrage for business and leisure travelers,” said Clive Wratten, CEO of the Business Travel Association. “The arbitrary daily passenger number has been selected done without consultation with airlines and the wider travel community. This is a betrayal of all UK travelers, leaving airlines, travel management companies and travel agents to pick up the pieces.”

He called for Heathrow to be more “transparent about their problems.”

Two UK government bodies, the Department for Transport and Civil Aviation Authority, have also requested John Holland-Kaye, Heathrow’s CEO, provides a “credible” recovery plan to get the airport back to business, according to reports.

Meanwhile, the Global Business Travel Association is putting pressure on the European Commission to address staff shortages.

It argued “business travel momentum” was being threatened because the current six-week background checks required for employees working at airports and in the airline sector was causing a bottleneck. 

“Staff shortages are having a significant impact on travel programs and are threatening to affect the speed and trajectory of recovery of the business travel industry,” said Catherine Logan, regional vice president, Europe, the Middle East and Africa. “The Global Business Travel Association is calling on the European Commission to prioritize and expedite the needed safety background checks to help alleviate the pressure at airports.”

The UK has already accelerated national security checks for new airport employees, but will that be enough for Heathrow? Passenger numbers are set to soar in a couple of weeks when families begin their summer vacations, which could compound an already complex situation.

Business Travel

Australian Corp Travel Agency CTM Notches Up Yet Another Acquisition to Expand in U.S.

2 years ago

Australia’s Corporate Travel Management has bought 1000 Mile Travel Group in an all-share transaction.

Terms of the deal were not fully disclosed, but on Friday CTM issued 106,336 fully paid ordinary shares to Zazi Pty Ltd, in its capacity as trustee of the Zazi Investment Trust, as part consideration for the acquisition of 1000 Mile Travel Group.

This element values the deal at more than $1.3 million.

Founded in 2015, 1000 Mile Travel Group is a network of independent travel experts who handle corporate, group, cruise and leisure bookings.

CTM said the acquisition will help it expand its “independent consultant footprint” in the small and medium enterprise market in Australia, the UK and North America a region where it’s been heavily investing over the past two years.

CTM snapped up U.S.-based Travel and Transport for $195 million in September 2020, months after acquiring Texas-based Corporate Travel Planners.

Closer to home it recently bought Melbourne-based Helloworld Corporate for $127 million.

The deal comes at a time when travel management companies are desperately seeking to recruit more consultants to cope with renewed demand for business trips.

“Our business was established to meet the needs of the independent corporate travel business owner market, and our business model has grown from strength to strength,” said Ben Ross, 1000 Mile Travel founder and managing director. “That model has never been more in demand than it is in the post-pandemic environment, and we’re excited to take the next step of our growth journey with CTM.”

CTM founder and managing director Jamie Pherous added the agency was “well-placed to expand the 1000 Mile Travel model into our largest markets of North America and the UK.”

Business Travel

Microsoft Enters New Phase of Amadeus Collaboration With Cytric Booking Tool Deal

2 years ago

Software giant Microsoft, a close collaborator of technology firm Amadeus, is moving its employees over to its Cytric online booking tool, which they will now use to plan, book and change business trips.

This deal follows a similar client win with Accenture, with the consulting giant also a close partner in helping Amadeus integrate deeper into Microsoft’s 365 platform, including Teams and Outlook.

Microsoft will roll out Cytric to a selected group of employees first, with the initial phase including the rollout of Cytric Easy and the integration of Cytric Travel into Microsoft 365.

“This milestone lays another foundation block for integrating technology into the travel booking and in destination experience,” said Eric Bailey, global travel director for Microsoft. “We want to simplify every aspect of business travel for our employees, Cytric does this with its intuitive user experience.”

In 2020, Microsoft spent was $44.2 million on flights in the U.S., down 85 percent from its $275 million 2019 volume, according to a BTN ranking, which noted its booking tool was SAP Concur in that year.

Amadeus announced the global strategic partnership with Microsoft in 2021. It includes migrating to cloud technology, as well as exploring new products and solutions, including leveraging its Xbox gaming console’s virtual reality capabilities to explore the metaverse, and potentially adding travel features to LinkedIn.

Rudy Daniello, executive vice president at Amadeus Cytric Solutions, added Cytric would help “push the boundaries of what the corporate travel sector has seen until this point.”

In 2020, Amadeus rival Sabre announced a partnership with Google.