John Beauvais
Flight Centre USA in December announced it acquired full ownership of Garber Travelin Boston, paying $10.4 million for the 74 percent of the company it did not already own. Flight Centre in 2007 bought 26 percent of Garber for $7 million and initially blended its branding with Flight Centre's corporate travel management operation, calling it Garber FCm Travel Solutions. FCm Travel Solutions USA president John Beauvais in December said the Garber takeover strengthens the firm's "footprint in the world's largest corporate travel market" and highlighted the nine U.S. cities in which FCm now operates. An estimated $500 million in annualized U.S. sales by FCm's corporate travel operations represents about one-quarter of parent Flight Centre's overall sales in the United States, which also includes the Liberty Travel retail network and wholesaler Gogo Worldwide Vacations. FCm's corporate network reaches more than 70 countries, according to the company. Beauvais spoke with The Transnationalabout the company's market approach and presence in the United States, where he said FCm would "look to expand to two or three more cities in 2011."
Is the company still a buyer in terms of M&A activity in this market?
We are not currently looking for anything but I wouldn't ever rule it out. If the right opportunity comes along--we have a history of acquisitions and the company globally is very strong--we would certainly entertain it.
Has your global approachchanged?
There is different perspective. We are still not really interested in going toe to toe with Amex and Carlson and BCD and Hogg Robinson, but to have a strong global network, we do need to have coordination with key markets. We are seeing a lot more consolidation of the business globally and we are certainly holding our own and then some in that process. It's important to our network countries, if they are the incumbent on an account that is trying to consolidate globally, that FCm is capable of consolidating that business, competing for it and winning the account so that they don't lose it. The U.S. is absolutely critical to that effort and was one of the driving reasons behind this acquisition.
Is there an account profile that would be the target?
We still look at it on an account-by-account basis. Our incumbent companies are critically important. We recently won a $25 million account and that was a big win for us, so that is about where we are interested in, up to about that level. But we will grow our focus over the next year or two to look at up to $40 million, because it is important for [members in] countries like Brazil and Argentina and Mexico that we get accounts that are sizable enough that they amount to a considerable piece of business in their markets. So [even] if we are all in the smaller markets--which are important and which we will continue to focus on, the $2 million to $5 million accounts--we do need to have some big-name accounts for our network countries and they're important for us here in terms of raising the profile of FCm. What we are competing for is to be the fifth of that group of global corporate travel management organizations along with Amex, BCD, Carlson and Hogg Robinson. So, yeah, it's really important to countries like Germany and the U.K., and even in our Indian operation, that the U.S. be very strong and capable of competing in that space.
A key capability for multinational buyers is data consolidation. What do you use for data consolidation?
We use the Cornerstone product, iBank, which we call internally ClientBank. It's a good data consolidation tool for our customers. Is it where we want it to be? No. Will it always be our platform? I don't know at this time. We haven't made any decisions for long term, but for now we are doing our best to make sure that we give our clients the information that they need and I get generally positive feedback on that.
Can you discuss Flight Centre's interesting experiences with point of sale technology, including a legal battle with Datalexand now testing Travelport's Universal Desktop?
It's an interesting story. Garber was heavily involved with G2 Switchworks in developing that point of sale tool that eventually Travelport purchased and incorporated into its Universal Desktop. As the U.S. entity, we talk all the time with our Australian headquarters about the Universal Desktop and it's an exciting development, but we are primarily [using the global distribution system services provided by] Sabre here in the U.S. Sabre continues to be a good partner so we don't have any news on that front. There are no pending announcements where that is concerned in the U.S., so that's really a story for us in all of our other markets where we own and operate--like Australia, New Zealand, South Africa, Canada, U.K. and so on. So it'll be news there before it will be any sort of news here.