Interview: Carlson CEO Trudy Rautio

Carlson earlier this month named CFO Trudy Rautio its new president and CEO, replacing departing chief executive Hubert Joly. Rautio, for 15 years a Carlson senior executive, recently spoke with BTN senior editor Michael B. Baker about performance and forecasts for both Carlson Wagonlit Travel and Carlson Hotels as well as the strategy changes she might consider in her new role.

CWT reported transactions were up during the first half of the year. Where are you seeing strength?

It's what you would expect. North America transactions were up 3 percent in the first half. Latin America was up 12 percent on a like-for-like basis, and Europe, the Middle East and Africa was down 4 percent. That's the area where we have the most concern going forward.

Because of the eurozone crisis?

Absolutely. As [CWT president and CEO] Doug Anderson said, it kept a cloud over economic growth and business travel, because business travel is volatile with economic conditions.

Other TMCs have shown mixed or negative results during the first half of the year. Do you still have confidence in the strength of business travel going forward?

We're very proud of the fact that in spite of conditions and an overall flat market, we did grow and maintained our position as the largest travel management company, based on sales. We believe we continue to lead in innovation. An example is that our mobile app, CWT To Go, was recognized by the Global Business Travel Association as the [outstanding app] of the year.

How has request-for-proposal activity been within CWT?

We had no unusual activity in RFPs. 2009 was a peak year for us. A lot of people came out looking for cost savings. Most of those agreements are still in place.

What role do you see open booking playing in the industry?

Online booking overall is continuing to increase. Our first half of the year at CWT was at 39 percent compared with 36 in the first half of 2011, and that's really consistent across all regions, except North America, which has a much higher percentage of online booking. It's a good cost-saving alternative for clients, because the less-complex transactions allows them to use a more cost effective means. Open booking is a hot topic, but our clients tend to be large, managed clients, and what they want is policy, compliance, access to content and negotiated rates. Many want safety and security programs and mobility solutions, so our clients want management. These features are not available through open booking. We see this as a trend but also see our clients asking for a great deal more management, so we look at both solutions.

Now that you've taken over as CEO, do you plan any changes in direction?

All of our businesses had announced Ambition 2015 as the overriding strategy. Each have very specific goals beneath that, and we're seeing a great deal of success and progress against those goals, so we are going to keep the ship sailing in the same direction and continue our efforts around that. However, 2015 is not that far off, so we're going to begin immediately looking at the next phase of our vision and establishing that with our businesses, probably in the first quarter of next year. Marilyn Nelson always said we stand on the shoulders of those who went before us, so we're going to build upon what's been a very successful strategy and vision for the company and put its next phase in place very shortly.

That applies to the hotel side as well?

We're gong to continue to march forward very aggressively with the strategy that we've outlined. We're very proud of the Radisson Blu Aqua in Chicago, and we can't wait to get the one at Mall of America opened. We are hopeful that the economic conditions in the Americas region will be one to support our growth. We're poised for additional growth of Radisson Blu, provided the economic conditions allow that to happen.

Recent hotel industry results have shown North America is faring better in occupancy and rate growth than the other global regions. Is that encouraging in that regard?

Right. That was terrific news. The overall results across Carlson have been quite good for the first half, better than what we had planned. I don't know whether we were conservative in our planning or whether the conditions were more robust than one might have expected, but we're hopeful that the Americas will continue to maintain that pace through the rest of the year.