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Travel technology provider TRX Inc. last week closed a transaction to acquire Travel Analytics, a procurement services consulting firm that provides airline sourcing tools to corporate travel accounts. Terms were not disclosed.
The purchase adds a well-respected firm with high-profile clients and in-depth knowledge of airline sourcing. Travel Analytics gains improved access to corporate travel data and the resources of a larger, publicly traded firm, which could allow it to expand into hotel and car sourcing, travel policy analysis and other spend management areas as it competes against the consulting arms of large travel management companies.
"Analytics now seem to be the battleground for consultancies of all stripes, particularly the big guys that are going toe to toe: American Express, Carlson Wagonlit, etc.," said TRW Consulting president Tom Wilkinson. "There is no question that TRX did well with the acquisition to build into what has to be an important part of its strategic plan."
In particular, "Travel Analytics is a perfect add-on solution to what we do with Datatrax, our data consolidation and reporting solution," said TRX president and CEO Trip Davis. "This acquisition is all about our strategic focus on data and data analysis."
Travel Analytics is best known for a suite of airline sourcing tools and airfare analysis. "We have been pretty narrowly focused on the airline category," said Travel Analytics founder Scott Gillespie, who is now TRX vice president and general manager of Travel Analytics. "If we are going to expand and grow, we need to have access to people who know the other categories as well as we know the airline category."
One source suggested Travel Analytics has little choice but to expand beyond that narrow focus, given moves by some major carriers to minimize corporate discount programs and the increasing corporate use of Southwest, JetBlue and other airlines that do not generally negotiate preferred pricing. Others said airline contracting, in some cases, can be as complex as ever, and that air sourcing tools have grown in prominence as more corporate travel accounts employ procurement-oriented processes.
"Airline pricing, as it relates to corporations, and the management of that airline data, will get more complicated, not less," Davis insisted, citing changing global distribution system economicsand travel management program globalization. As a result, "We will continue to focus on the air side. Our intent is to make sure that stays a world-class solution."
Beyond that, Davis said TRX and Travel Analytics together would delve into hotel and car rental analysis for corporate clients, but made "no promises" on timing. When asked if TRX would consider traditional travel management consulting services as a complement to Travel Analytics' technology-driven procurement consulting tools, Davis said, "Absolutely not."
Travel Analytics is the second corporate travel consulting firm to be purchased this year by a larger player, following HRG North America's acquisition this spring of Partnership Travel Consulting. Because TRX is not a travel management company, Gillespie said Travel Analytics can maintain its "unarguably unbiased" position in the market.
TRX, however, has ties to several sizable TMCs. It is majority-owned by BCD Holdings, the majority owner of BCD Travel; has a shared services agreement in place with former minority-owner and HRG parent Hogg Robinson plc; and works with many other large TMC clients.
According to the Travel Analytics Web site, the firm "competes primarily" with some of those TRX clients: "Travel Analytics has never had, nor ever will have any sales incentive agreements in place with any travel supplier ... It has always seemed to us that this creates a strong potential conflict of interest for agency-based consultants when they set out to advise companies on which airlines are best for a client."
That perspective was shared by independent consultants and others this year as big TMCs bolstered their consulting services. In addition to HRG's purchase of PTC, American Express formalized a global advisory services unit and BCD Travel establisheda "global consulting practice ... driven by growing client demand for a complete range of analytical services."
"Any time there is TMC ownership or control, the integrity of the data and the possibility of bias has to be explored," said one travel management source who requested anonymity.
TRX's Davis sought to dispel any perceptions of impropriety. "The integrity of the data and the relationships with our clients and the buyer is absolutely paramount," he said. "We service multiple clients that are competitors with each other. This is lifeblood stuff for TRX."
TRX products and services range from back-office travel agency automation and data consolidation to point-of-sale reservations systems for both agents and travelers. It also provides support for supplier-direct bookings and data reporting to airlines. Noting that the four primary GDSs no longer capture nearly all bookings, and therefore cannot offer as robust market information data transfer (MIDT) products, Davis said TRX, Prism, Hi-Mark and others offer reporting services to airlines covering "marketshare data and contract data." Travel Analytics, also, has dabbled in that area. The company said its Tango software has helped such airlines as Lufthansa and United "validate their existing corporate account models."
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