Within the travel sector, BCD Holdings has diversified its revenue sources with investments in consumer online travel, airport parking, travel technology and meetings and incentives management, but the core travel management company business through BCD Travel remains the largest portion of the Dutch firm.
It's also the most global, which means facing the challenge of regular tweaks and updates in the network. For example, BCD Travel of late has rejected whole ownership of agencies in Russia and Spain in favor of joint ventures, top executives noted in a June interview with Business Travel News.
A joint venture with Viajes Iberia in Spain went into effect June 1, following a decision to integrate the two firms' operations there in an effort to provide more comprehensive service, ensure future growth, maximize local opportunities and address local "particularities" in light of the acute impact in Spain of the Great Recession, according to BCD.
"Although we have seen enormous growth in the Far East, most of the volume is still driven from American and European companies," said BCD Holdings chairman John Fentener van Vlissingen. "Every company has some weak spots and some strong spots. We have moved some things around. We have become stronger in France where it was necessary, we have changed things in Spain to also become stronger in that area. We have increased our percentage in Sweden by taking over another company [ Travelflow, in 2007]. We have also realized that in some countries it's better to have a partner.
"We even moved out of the Russian countries because it was preferable to have a partner who is local. For us it became, to put it mildly, complicated," said van Vlissingen. "You are never finished."
The partner in Russia is JSC Aeroclub, which a BCD Travel spokesman called "the largest corporate travel agency in the country, with about 350 employees."
In China, full ownership is not an option. BCD Travel partners with Jebsen Travel.
"Generally, the biggest problem with China is that it is estimated that 70 percent to 80 percent of the Western companies don't make a profit in China," said van Vlissingen. "Who does make a profit? The partner. It's still something that is wrong in that country. Short-term, you can live on that. When the growth stays as it is, people are kind of accepting it because they all say, 'We have to be in China.' Major corporations, if you read annual reports, all say the same statements: They have to be in China, but they are losing money, and they are losing money for years. For us, it's the same. We have to be in China, and we have to be in different cities in China, but I hate losing money. So let's be there efficiently, let's be able to handle our clients in a perfect way and let's not do more."
"If you look at 2011, overall you can see that customers have come back to travel, very rapidly as a matter of fact," said BCD Travel CEO Joop Drechsel. "We tend to look very much at the American market or at the U.K., but I can see the growth pockets in Asia, in South America and even in certain parts of Europe. We have a lot of successful German customers who all seem to be really exporting like crazy to Asia." BCD Travel now employs more than 750 people in Asia.
Van Vlissingen commented that while "most of the corporations have healthy balance sheets, have high liquidity and are in very good shape generally," prudence still has them talking about being "very cautious." Transaction numbers show healthy growth in the volume of travel, but companies continue to use value-based products like premium economy class and adjust schedules to, for example, cut one night's hotel stay on a given trip.
The article originally was published in Business Travel News.