Agencies In Motion Over Corp. Meetings

American Express and Maritz Travel Co. have terminated their two-and-a-half year arrangement in which Amex referred its larger transient clients to Maritz for group travel management services. Amex now will refer its clients to subsidiary American Express One, which previously received its parent's group travel referrals for clients with less than $10 million annual travel volume.

The relationship, terminated in January upon the expiration of a one-year contract, was ended because both companies decided to focus on their core competencies in a difficult economy, officials from both parties said. Both denied that the merger of Maritz with TQ3 Travel solutions in February 2001 or Maritz's acquisition of McGettigan Partners last November played a part in the decision.

"At the time of the renewal, given the nature of the economy, status of business and scarcity of resources, we all decided this was not what we should be focusing on," said Maritz Travel Co. president and CEO Jeffery Reinberg. "Like any other relationship, there were good parts that exceeded expectations and some that didn't."

American Express spokesperson Melissa Abernathy characterized the decision as a choice to focus on core competencies, rather than the care and feeding of a strategic alliance. "Any strategic alliance must be managed, as must the referral process. We'll continue to support clients who still want to use Maritz," she said.

The deal between American Express and Maritz was struck in July 1999, after months of speculation that Amex was interested in outsourcing its group and meetings management business (Meetings Today, Aug. 2, 1999). Maritz emerged as the mega-agency's partner and agreed to pay Amex per referral.

Some sources speculated that, for all the attention it received, the relationship didn't amount to a great deal of business for Maritz. Reinberg wouldn't address that claim specifically or provide details of how many accounts were landed because of the relationship, except to say that "turning referrals into pieces of sold business is a different story. There were a couple of accounts. It's a long way from point of referral to point of closure."

The decision comes at a time when the agency-related corporate group travel management market is changing rapidly, with Philadelphia-based McGettigan's acquisition by Maritz and WorldTravel BTI's purchase last month of McCord (see story, page 1). The move likely will make Mt. Laurel, N.J.-based Amex One, formed after American Express bought Travel One in 1998, a more significant presence in the competitive marketplace. "They've been able to do large-volume group travel management all along, and they had some large clients, but they were not marketed broadly," Abernathy said. "They are entering a more mature phase."

The dissolution of this relationship does not affect the status of American Express Incentive Services, a joint venture between Amex and Maritz formed in 1997 to create and market corporate incentive products and solutions, primarily centered on debit cards.