David Radcliffe
Hogg Robinson Group CEO David Radcliffe this week told The Transnationalthat HRG's reorientation toward a regional rather than a country-specific structureis "largely finished in terms of operations, but the [data] reporting will still take some time." He also suggested that the travel management company's network provides sufficient global coverage but that "there may be one or two infills, there may be one or two acquisitions as we move forward." Radcliffe also addressed HRG's technology development and growing consulting practice, and his views on airport security personnel.
We understand HRG is working on "the linking together of travel reservation centers" in such countries as the United Kingdom, Hungary, Sweden, Singapore and Canada. What exactly does that mean?
For certain clients, we are pitching what we call a follow-the-sun service. Basically it means our business centers--our res centers across the globe--are able to follow that booking when it enters their time zone. You can make a booking in North America and that booking will be tracked and picked up by Singapore as and when it wakes up, and by Budapest as and when it wakes up and then North America as and when it wakes up. This is far more than a 24-hour help line. It is a complete track of all the reservations and it also means that from a security point of view, we are right on top of all those tracking issues. As far as the client is concerned, it means they have a single point of access. It doesn't matter what time of day it is. Everything around that booking is available to them at the same time, regardless of where they entered it. Most [travel management] companies rely on their individual company profitability. You have a local managing director responsible for supplying a service and committing to a certain level of profitability within his country. We have thrown the rulebook away. As far as we're concerned, our profitability is driven by our clients. Therefore, we need to supply the service as it is needed, regardless of what it may do to that country's profitability. Hence, we have moved into this regional structure. That means that in a place like Singapore, we look at what is needed for the client overall first before we look at Singapore numbers. This is a big, fundamental change for any company that operates across the globe, but it is the only way a client can be sure we are committed to delivering a service. Our follow-the-sun clients are actually managed by a global unit, not according to the local countries. It is logical, but fairly intense to put into place and it has taken us some years of thinking. We wanted to get through the initial public offeringbefore we actually went ahead with it.
Can you provide an update on the HRG "universal super platform."
I always liken in it to a double-ended octopus. You have a number of tentacles on the front end that can reach to wherever distribution starts. And you have a number of tentacles on the back end that can delve into wherever the inventory is held. That is a large part of what super platform effectively does. It has the ability to completely disregard traditional methods of distribution and either put the front-end user--who may be a client or may be one of our people--directly in touch with where the inventory is, regardless of whether it is a global distribution system, or a dot-com or even any one of the new entrant [distribution systems]. It is a completely independent, freestanding vehicle that also then sucks data in and privately warehouses those, so we are not reliant on any third party. It has taken us years to build and is a very unique thing that provides a complete end-to-end solution. When it is plugged into [HRG expense management tool] SpendVision, it also enables you to reclaim all your expenses--compartmentalized and put to wherever they need or don't need authorizing--and then actually pay those expenses and audit them afterwards, depending on the relationship with the client. This is a huge animal, without outsourcing and we own it. It is where we think the industry will go. Because the super platform is built in modular form, we can introduce different modules at different times for different clients. At the moment, we have a front end being rolled out in Europe and we've got a front end about to be rolled out in North America. We are in the process of launching the appropriate parts in the appropriate markets.
Has there been any thought toward a more formalized affiliate network, similar to those of American Express, Carlson Wagonlit Travel and BCD Travel?
Some of our competitors use their affiliated networks to bring them income and actually earn them money as a result of that volume. That's not our strategy. Our strategy is to have a network that serves the client, first and foremost. Having said that, in America we do have a growing affiliate network, but that is aligned just purely for the United States. We have had a number of companies contact us from the States saying, "We know we need to be global, we know we need to be international, we don't want to sell to one of the other three [major, global travel management companies], is there a chance we can work with you guys?" There is a period of time where we are prepared to listen to that, but it is not a big listen. It is very strategic in certain parts of the U.S. Our penchant for making acquisitions is well known, but quite how long it will last, I don't know. There are a few good players in the States that still want to be independent. If there is a way we can tie up that makes sense to both of us, then okay, we will.
HRG last year purchased Ian Flint Associatesand more recently began constructing a consulting practice in North America. Are you now content with the breadth of the company's consulting services?
Not at all content, yet. I am content with the progress we have made, but we are nowhere near where we will be. To build the model that we are trying to build--a very independent, unbiased model--does take time. I could take a leaf out of one or two of my competitors, change a lot of titles of existing people and have a very big consulting network. But that is not our plan. Our plan is to grow properly--by both acquisition, and organically--a good, freestanding consultancy. That will take time and I am frustrated, but on the other hand, we scored some great goals and we are growing already. But it is not fast enough, I agree.
There has been a lot of discussion about unfriendly security policies, as it relates to foreign travelers coming to the United States. Do you perceive any negative impact on transatlantic business travel?
America is not on its own. We have our own issues with [London] Heathrow Airport, at the moment. We have evidence of business travelers actively avoiding Heathrow and moving through regional airports because of the comparative ease. Talking to you as a frequent traveler and not the CEO of a major TMC, you have airports over [in Europe] trying desperately to make a profit and at the same time they have to meet a number of security criteria. They're outsourcing, and the people they outsource to--I repeat, this is my view as a frequent traveler--are driven into a place where they quite naturally have to operate at the lowest cost, and in an environment where people have to move through fast. Maybe we need to get better-trained people. Maybe we need to train people on attitude and customer service, as well as how to search. When I look at the search criteria at a major airport like Heathrow, there is the conflict of interest. I can be searched, but I would like to be searched nicely. Quite often, you'll find that what is actually holding up the procedures is resentment between the travelers and the searchers. One argument explodes into another. In any airport I have come across--apart from maybe Singapore--I have not seen a sense of urgency on security people moving people through. (I take that back, Shanghai has recently changed. It used to be terrible, and now it is much better.) The political climate in America is related. Of course America needs to be careful, and I want to be a victim of that care. I want to know that I can pass through safely. But again, it is how we do it. It is a fact that you don't have customer care. Australia is the worst. You go through three separate arrivals to prove whether you are lying, I think. They base it on the fact that you are a bad person and they will prove it. At least in America, they assume you are innocent but will still check two or three times. It all comes back to attitude and the cost that is involved. A lot of the time, we have the wrong people doing the right thing in the wrong way. I see it harming the business of business travel. I got into a heated debate at Heathrow not long ago with a security team. I told them, "You are hurting this business. You may drive away one person from every plane who says, 'This is the day I have had enough.' " One of the guys looked at me and said, "Good." I replied, "Let's follow this to its logical conclusion. Let's assume that you are successful in your strategy to drive away people. Ultimately, you won't be paid for doing nothing. You'll actually lose your job, because there won't be anyone to be rude to." It is odd, but there is a mismatch between the service you need to offer and the guys employed to do it.