FCm Moving On Path To Become Global Mega TMC

Anthony Grigson, global executive general manager for the Brisbane, Australia-based worldwide travel management company FCm Travel Solutions, recently spoke with BTN contributing editor Amon Cohen about global TMC consolidation, the challenges of managing travel in Asia and U.S. acquisition targets.

BTN: In how many countries are you present as an owner and through your licensee network?

Anthony Grigson: We are present in 50 countries, of which 15 are wholly owned or part-equity ownership. Roughly 60 percent is in Asia/Pacific, with 20 percent in Europe, 10 percent in the Americas and 10 percent in India and the Middle East. There's a lot of business in the Middle East and India that is working together.

BTN: You bought Chicago-based Bannockburn Travel earlier this year. You have been hinting for some time now about making another U.S. acquisition. Can you tell us what is going to happen and when?

Grigson: The "when" is always the difficult part. Joe Mazza, the principal of Bannockburn, and our president for North America, Greg Dixon, are working well together in consolidating those businesses. There is a lot of opportunity coming out of that acquisition alone. We are looking at targets that are more East Coast-based, but I unashamedly say that "when" won't drive the decision. We put some stakes in the ground previously which we haven't met, but we believe it is about acquiring the right company. We haven't let any of our clients down because of this, but we haven't been able to take advantage of as many opportunities maybe because of a lack of presence on the East Coast.

BTN: Is there anyone left to buy?

Grigson: That's a good point. Consolidation has played a fair role in the United States. There are still a few targets around.

BTN: If you do have global aspirations, it must be a problem that your U.S. presence is not big enough at the moment.

Grigson: I wouldn't say it's a problem. It's a challenge that we need to get over. It hasn't stopped us from having strong, profitable growth in North America. It could be said that we don't have the ability to do that real high-end, top-volume base business which might represent 20 percent of the market, but that still leaves 80 percent.

BTN: Are you mainly going after national accounts in the United States?

Grigson: At the moment, it would be predominantly national accounts but we have 10 or more multinational pieces of business out of the States as well.

BTN: The FCm name is well-known in Asia/Pacific and becoming so in Europe, but are you registering on buyers' radars in North America?

Grigson: We are definitely registering with the middle to smaller end of the business travel market because we are taking more marketshare each year. At the very top end, our profile is less, but we don't want to pretend we are something we are not. We are building the capability to tap that sector.

BTN: You are the first Asia-based TMC with global representation. Does that give you a different perspective?

Grigson: Yes. In Asia, we understand our clients better because we are not just trying to replicate what might work in the United States or European markets, which doesn't always necessarily fit. We know from experience that other TMCs don't come into Asia agile, flexible and willing to change their models. We've been able to take local business away from global TMCs because we understand the market, the business and their clients.

BTN: What are the challenges of consolidating a travel program across Asia?

Grigson: Multiple global distribution systems. Because there are so many countries in Asia, you get a variety of mid- and back-office processes as well. The different levels of maturity pose challenges. If you get Europeans around the table to talk about consolidation, such as how they are going to present data, it is a common concept, talked about for many years. In Asia, true consolidation is still relatively new for many players.

BTN: Do companies consolidate across Asia?

Grigson: Yes. We've got about a dozen clients we consolidate for in Asia/Pacific. You have to get creative to find your way around these challenges.

BTN: How are your clients doing in managing travel in China?

Grigson: With varying success. It would be fair to say that Chinese companies do struggle with issues like getting travelers to book through one TMC. There is leakage everywhere. It's still a very diversified market with many players other than the traditional competitors. It's also very price-sensitive. The other thing about China is that the regulations are hard to work against. They change quite a bit. You need someone who understands the local conditions and regulations. They vary from province to province. There isn't a national licensing regime.

BTN: What are your plans for growing FCm?

Grigson: Our plans are threefold. We are continuing organic growth of our traditional businesses that we have built over the past 10 years plus ones we have acquired over the past five years. We are still looking to acquire more companies in what we see as either strategic or emerging markets. Thirdly, we see growth coming from improving our licensee network.

BTN: How big will you get?

Grigson: We don't want to measure ourselves the way that others do in terms of number of countries. We are a business that looks for profit before growth. We need a core number of countries to do that and we believe 50 is a good number. More importantly, we have representation in all the major markets.

BTN: If 50 is a good number, does that mean you are not looking to go into more countries?

Grigson: There are about 20 markets we would be looking for movement in over the next 12 months. We assess a country in a few different ways. One is, what is the opportunity for incremental stand-alone growth within that market? Secondly, do we have an opportunity to go into those markets to complement clients in other markets? We sit down with our clients to map out a strategic plan and it is not always just about where they are right now. We want to work with them proactively to be ready for them when they are ready to trade.

BTN: Do you aim to be as big as the big four travel management companies?

Grigson: Our aspiration is to be in the top echelon of travel management companies, but it is very important to have profitable growth. We don't believe in buying volume for volume's sake.