5Q with CWT's Doug Anderson - Business Travel News

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5Q with CWT's Doug Anderson

June 12, 2008 - 08:35 AM EST

Doug Anderson

5Q with CWT's Doug Anderson

Washington

New Carlson Wagonlit Travel president and CEO Doug Anderson spent much of the first few weeks in his expanded role meeting clients, suppliers and partners. Although he joined the travel management company last year as executive vice president and CFO--the latter a title he also retains--Anderson said he spent the time "thinking about what a CFO thinks about and didn't get as much external exposure as I would have liked to have had." That all changed in April as the CWT board promoted Anderson to succeed Hubert Joly, who in March became president and CEO of Carlson, majority owner of the TMC as well as hotels, restaurants and other hospitality-related businesses. Anderson worked for 25 years at UPS, most recently as senior vice president of finance and CFO of UPS Logistics Group. Before that, he was senior vice president and CFO for airline technology and telecommunications provider Sita Group in Geneva. Now based in Paris, Anderson has worked in the Asia-Pacific region and Europe for the past 18 of 20 years. He met with Management.travelduring the Association of Corporate Travel Executives conference here last month to discuss his new role, challenges and his take on the travel industry. An excerpt follows.

The industry is closely watching booking trends. How are your bookings today compared with a year ago?

We are continuing to see good growth in our EMEA [Europe, Middle East and Africa] region and good double-digit growth in Latin America and Asia-Pacific. We're seeing softness in our U.S. commercial business. We have two businesses in the U.S.: military and government, which is doing very well, and commercial, which is softening. If we look back over the last half of 2007, growth rates started to decline, they sort of flattened out in the fourth quarter, and we've seen some low-digit declines year on year in transactions for the first three or four months of '08, compared with the first three or four months of '07. I don't know--I don't know who knows--if the U.S. is in a recession or not, but we're certainly seeing a slowdown in business travel in the U.S.

Last year you announced double-digit increases in travel booking volumes. What are you anticipating this year, and how will you grow if the business is slowing down?

At a macro level, we're seeing good growth rates in three of the four regions. We're continuing to have a lot of success in winning new business, even in the U.S. The other plank in our plan is tuck-in acquisitions or tactical acquisitions. We've announced three or four in the last three months, and we're continuing to look for opportunities to pick up high-quality, small agencies that have good customer bases and give us either a foothold in a sector or just scale. Scale matters in this business. If we can find an opportunity to buy a good company with strong management and a good customer base that gives us additional scale, we're doing that--and we have the cash to do that. About 50 percent of that [M&A] growth is outside the U.S. and 50 percent within.

Globally, are there any areas where you feel you really need to bulk up because your customers are there, or moving there?

One area we were thinking hard about for the last couple years, and probably when I first started about a year ago, was Scandinavia. We acquired a Sweden-based company, called Ark Travel, last summer. That was a bit larger than our tactical acquisitions, a $40 million-plus deal. That's given us some reasonable scale that we did not have in Scandinavia. The other areas where we'll continue to think strategically about developing further are China, where we have a 49 percent joint venture--it's a big market and everyone wants to grow their capability and presence in China--and India. In India, we'll acquire the remaining 24 percent of that JV to own 100 percent sometime by the end of June. [CWT began operations in India more than a decade ago with a partnership that in 2000 was transformed to a 50/50 joint venture with AFL Private Ltd. CWT gradually increased its stake to take majority control, at 76 percent, last summer.]

What new products do you plan to release by year-end?

We'll continue to enhance our reporting. We're going through a process right now talking to C-level executives to understand what C-level executives would like to see in reporting. A C-level dashboard would be added to our program management centerwith traffic light reporting--red, yellow and green, what needs attention, what doesn't. The data collection is in process right now. The team working on it has done some internal interviews and then they'll go outside and talk to C-level executives at major clients and prospective clients. I would imagine we'll have some pretty clear direction on what we'll do, what clients are looking for within the next three or four months and see how much development is required.

The shipping industry, in which you spent the past 25 years, is viewed as one that is highly efficient, a machine. What is your take on the efficiency of the travel industry?

I spent a lot of time with UPS and it is a machine. Customers of UPS want to give UPS a shipment, have it delivered and what happens in between is not of much importance, unless it has to do with information and now financial services that has moved up food chain. But in our business, we have to maintain local customer intimacy. Our clients need to be able to rely on us to react when there's a problem, react to individual traveler situations. We have to be able to maintain and retain that customer intimacy, while at the same time, have the workings in the middle in our operations that are effective, consistent and efficient. We have opportunities--we believe--to drive more efficiency in transaction processing that doesn't impact the interface we have with our clients. We want to make the machine the platform that supports booking and the transactions that take place on behalf of our clients more efficiently and more consistency. We have a global platform, but we haven't deployed the global platform globally yet. So there are opportunities to take costs out, create efficiency and share some of that with our clients and some of it with our shareholders.

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