The WorldTravel BTI/McCord merger and the subsequent creation of a meetings and incentives division of the new entity continues a trend of large travel agencies developing resources to handle all aspects of corporate group travel management, from meeting production to group travel consolidation, either internally or through acquisitions. As a consequence, the competitive landscape for that type of business has changed dramatically.
The merger, announced last month, follows closely on the heels of Maritz's acquisition of McGettigan Partners in November (Meetings Today, Dec. 3, 2001) and Carlson Wagonlit Travel's internal restructuring to tie its group travel management resources with those of its sister company in May 2001.
The movement has enabled several large agencies—all with many large corporate transient travel accounts—to add capability to manage group travel procurement and compete for a pool of corporate clients. Add American Express and subsidiary American Express One's small and midmarket group management resources, and competition deepens.
WorldTravel's new meetings division is headquartered in Chicago and headed by Bruce Black, previously McCord's CEO. Both Kaye Mulkeen, who headed the former meetings and incentives division of pre-merger WorldTravel, and Scott Graf, president of McCord's performance marketing division, which also encompassed group travel, will stay onboard and report to Black.
The new division, officials said, combines WorldTravel's experience with group travel management and meeting consolidation with McCord's capacity for incentive and event management. "We were two different groups," Black said. "Ours focused on incentives and meetings, with no real capability in consolidation. The combination of those three components will serve WorldTravel BTI well as its fifth division."
Mulkeen pointed to the financial and ever-resilient pharmaceutical markets as strong targets for consolidation initiatives. She added that the automotive, insurance and petroleum industries have been customers of McCord's meeting and incentive management services, so there is the potential for offering new services to a wide and varied customer base. "There's no overlap of customers," Graf said. "It's a clean integration. The customers we have spoken to have been very pleased, because there are clear benefits."
A major aspect of the new division's offering will be the meetings technology Mulkeen's division has been constructing. The technology, an enhanced version of the agency's MeetingAssist software with extensive data consolidation capabilities will be rolled out first to WorldTravel and McCord's meeting clients, then other BTI clients and then to the public. That process is scheduled to begin in July, Mulkeen said.
"We're taking a different approach now," Mulkeen said. "Companies are phasing in consolidation. Technology is leading the way. Companies are gathering data with tech and from their suppliers, then analyzing that data to create a consolidation business plan. Five years ago, they were trying to consolidate by mandating the use for one vendor as the first step, and that didn't really take off."
But WorldTravel BTI will have competition. "Imitation is the highest form of flattery," said Maritz Travel Co. president and CEO Jeffery Reinberg. "This validates our business model of presenting an array of travel management offerings. WorldTravel is number three on the corporate side regarding ticketing numbers, and McCord is not a huge regional but a good one. The combination is good for both of them and for the industry, as it shows a new approach to travel management by providing full offerings.
"They are a worthy competitor, and they're taking a comprehensive approach by not just creating from within but acquiring, including retaining the people involved," Reinberg continued. "You can be in the group side or you can be an expert at it. Amex One is strong in meetings and events, Carlson has big dollars, though they really have to connect the two sides, but Rosenbluth has no real group capability, so WorldTravel has made the most significant move here."
Carlson Wagonlit last May developed a group travel procurement model with its sister company Carlson Marketing Group, which had extensive experience in event and incentive management (Meetings Today, May 21, 2001).
"We happen to have the luxury of not having to buy anyone," said Peter Moen, CWT general manager of meetings management. "But the market needs to see how all of this will play out. An important component is the tech piece. Service is another, but you have to have an integrated Web strategy that can handle tracking, procurement and online booking, or else you're lacking. We have a strategy of integrated fulfillment with Web tools."
WorldTravel officials acknowledged the changing landscape. "Clearly, we have to see them as competition," Graf said. Speaking of other would-be consolidators, including online companies, Mulkeen added, "the others have tried to scramble, but we've been at this for a while and we've got the expertise."
What all the players agreed on was the existence of a deep pool of interest in corporate meeting consolidation and group travel procurement initiatives. "This is an environment with opportunities to further travel management initiatives due to cost and the larger influence of procurement," Moen said. "Buyers want to leverage procurement across the enterprise, with fulfillment expertise for meetings and groups, just like transient."
"The reduction in meetings makes larger initiatives seem more doable than in the boom days," Moen said. "Then, so many couldn't keep up with handling all the meetings. Now that there's fewer, it's easier to implement a procurement strategy." Moen said CWT also is picking up corporate clients who are seeking a variety of meeting solutions.