Close to five months after its split from Dutch partner BCD Holdings, HRG's North American operations are beginning to take shape under the leadership of CEO Tom Gleason, as the company integrates the former wholly owned BTI Canada, Sea Gate Travel Group, Robustelli World Travel and most recently, Princeton, N.J.-based Partnership Travel Consulting. Gleason said to expect more announcements of U.S.-based acquisitions by the time the National Business Travel Association convention begins in Chicago in July.
"We have a presence on the West Coast in Los Angeles and Vancouver, but we want to build it more," Gleason said during an interview at his New York headquarters late last month. "We're looking at acquisitions on the other side of the Mississippi and we've got a couple that we're looking at right now—one we're looking at very seriously and one that's just in the initial stages."
Gleason said HRG North America's employee base is close to 1,400 people spread out over 70 locations. Internationally, HRG has presence in 91 countries—owning in 23 and operating affiliates in 68.
As HRG's full scope emerges in the coming months, Gleason said North America's focus is "to get the integration done, get the rebranding out there and grow our name," while engaging what he called HRG's five value proposition-based tenets: expense management, sports management, meetings, corporate travel and consulting.
"We plan on by the end of May or mid-June to have it all done," Gleason said. "Robustelli has integrated very smoothly and we recognize that it's a little easier because the cultures are so similar. The urgencies are to get human resources, finance, client management and sales together. Probably by the end of May, we'll be about 75 percent there."
Gleason said assimilating HRG's Canadian piece, which employs more than 900 people, will be harder. Unlike HRG North America, the Canadian business also counts Expedia Corporate Travel Canada and Travelocity Business among its accounts.
Meanwhile, HRG is integrating its meetings division, which has yet to establish a division head
(see story), and is building its consulting arm, led by Andrew Menkes, formerly of Partnership Travel Consulting
(BTNonline, April 6). HRG's research capability is one of the main reasons Menkes said he accepted the global travel management company's acquisition offer. "There is a team of 14 consultants based in Europe, and some of the work they do is for non-Hogg Robinson clients," he said. "These are corporate clients of other travel management companies, so effective day one, I am able to use the resources of the consulting team in Europe, including the analytical tools. The game plan is for me to develop a similar group here in the United States, recognizing the unique needs of the market and the time zone difference."
Menkes reports to Chris Fry, corporate and marketing director of HRG. John Asselta and Barry Lemley will join Menkes at HRG's new division, and Menkes said he would expand the team as client projects warrant. PTC's Earl Foster, Steven Schoen and David Wardell have decided to pursue other interests and Tom Wilkinson established TRW Travel Consulting in Pennington, N.J.
Technology integrations may take up to one year to complete, Gleason said. With TRX under the BCD umbrella, it no longer serves as HRG's technology provider. The company instead relies on a number of different companies for technology, including Discovery, which is building a back-up network for HRG North America, according to Gleason.
In addition, the company is working to square HRG CEO David Radcliffe's philosophy that travel management company cost cutting has gone too far in competing with such low-cost online booking options as Expedia Corporate Travel and Orbitz for Business. "The fact is, you better have that product on your shelf—that's how you compete," said Gleason. "You've got to provide an online offering, because too many companies will dismiss you before you walk in the door. If you just go in and say you'll compete on price alone, that's just going to spiral out of control. David says we'll have an online offering, but once you make that offering you want to see other products to suit whatever other needs there are."
Leading the integration are Patrick Brooker, executive vice president of finance of HRG North America, and Richard Butterworth, COO of Canada, both of whom are based in Toronto. "We put together a team of executives and then we sat down and set a timeframe with meetings and deadlines and so far we're hitting the deadlines," Gleason said. "The more effectively, efficiently and quickly you put it together, the better it is. Things don't fall through the cracks, things work more efficiently, communication is better—we'll run into roadblocks because it's inevitable, but I've been really pleased with the way it's working."
In addition to Gleason, Brooker, and Butterworth, the North American team emerging from the integration of BTI Canada, Sea Gate, Robustelli and Partnership Travel Consulting, include Dan Green, vice chairman and director of development, Thomas Lacny, senior vice president of global sales, Paul Salvatore, executive vice president of sales and marketing, Danielle Waters, executive vice president of sales for Canada, and Menkes, president of consulting for North America.
Gleason said he does not expect to eliminate any positions as the integration progresses. "David has built a culture of taking care of our people," he said, "and there are a lot of ways to get to savings without giving pain to the people. I can't tell you exactly, but that's certainly not our plan, because I think we can do things in different ways. That's the kind of things we're thinking through: Can you buy differently? We use a lot of FedEx, DHL, we have three different phone systems—these are things we're looking at."
Meanwhile, Gleason said HRG will continue to serve the few dozen accounts that still remain under the BTI name. "They're a protected list: We will not go after them, BCD will not go after them, and when they go out to bid, they go out to bid," Gleason said. "If clients want to continue that BTI process, then we'll do it."