KDS CEO Dean Forbes on Expansion Plans

KDS CEO Dean Forbes talks:

• An impending U.S. push
• Bitcoin digital currency
• Future acquisitions

Travel booking and expense firm KDS has expanded in the United States slowly and steadily since launching there in 2014. It has nine travel management company partners in North America, and after it nails down two partnerships on the payment and the enterprise resource planning side, CEO Dean Forbes said, it will be ready to invest more heavily in the United States. Meanwhile KDS has been flexing its innovation muscles with bitcoin. CEO Dean Forbes talked with BTN payment and expense editor JoAnn DeLuna.

BTN: How are things progressing at KDS?

Forbes: We're really happy with the progress in the United States. It's always been our strategy to be slow and cautious. If anyone was ever expecting us to hire 1,000 people to work in the United States and see how it goes, that was never going to be our strategy. We stopped counting Neo customers and started counting transactions. They're up 48 percent year over year. For our next release [July 16], we'll be exposing Neo [KDS's door-to-door itinerary-booking tool] to all our customers. Everybody will have both at no extra charge. Historically, clients could either use the Neo platform, the KDS corporate platform or some customers choose to use both.

BTN: And you have nine TMC partners in North America, right?

Forbes: I'm really happy with that as that's ahead of our plan by some margin and there are some pretty sizable ones in there, like Fox [World Travel], BCD Travel and [Travel and Transport].

BTN: Has your strategy for gaining clients remained the same?

Forbes: It's still via the TMCs, and that's working for us. I don't see us changing that for the foreseeable future. Neo is still the thing that's winning out for us. We're seeing and hearing two things [from customers and TMCs]. One, they're frustrated with the lack of alternatives and frustrated with the level of innovation and what's happening within those alternatives. People are frustrated with some of the GDS-provided tools. They lag so far behind the consumer world. In other cases, they're saying, "Sure, we know that company really well, as they've been in market for a long time, but we've learned our lesson by dealing with them, so we'd really like to look at alternatives." Before we even get into the details of how good the solution is, just those market dynamics are really powerful for us.

BTN: What is KDS working on at the moment?

Forbes: We're getting pretty close to finalizing two interesting partnerships, which we've been working on for a while. Once we nail those, we're going to make a very sizable investment in the United States because it's really just a question of scale. It's such a big geography, and I want to make sure we have enough partner coverage that we can spread ourselves a little more broadly without having to have 1,000 people from Day One in the region.

BTN: What kind of partnerships are these?

Forbes: We're travel and expense, so I'd like for us to have the same power we have in the travel community on the expense side. The TMC partnerships: That part is covered. The partnerships you can expect us to announce in the coming weeks are centered on payment side and the ERP side.

BTN: During BTN's London conference, there was talk of KDS processing bitcoin. Can you talk more about that?

Forbes: That's really it. We can deal with bitcoin as a payment, alongside corporate card, lodge card. It's running now. Running means I've seen it, but not sure if we're exposing it to clients yet.

BTN: Do you see big adoption for bitcoin in the corporate travel market?

Forbes: To be honest, probably not for the immediate term. The work to be able to accept it was one part us being able to flex our innovation muscles and another part us expanding our payment-type capability as far as we could. Because once you can deal with card, Apple Pay, all kinds of virtual payment providers and bitcoin, you're proving that you can cover the full gambit.

BTN: Last year, you were looking to acquire a company but it fell through. What happened?

Forbes: The company was in our T&E space, much heavier on one side than the other. I think they realized now they should've sold. It fell through because the other side had valuation aspirations that didn't meet mine.

BTN: Are you looking to make any other acquisitions?

Forbes: I would love to. It would be a marketshare play for us, somebody who looks a lot like us, probably smaller. There aren't many companies who have an equal distribution between travel and expense or even nearly equal. It would probably be someone heavy on travel, a little bit expense, or very heavy on expense with a little bit of travel. Cultural fit is important. We'd acquire a company that's also in constant dialogue with customers because we talk to our customers all the time.

TMCs are frustrated with the choices they have. Even the ones who are most committed to a single vendor say to us: "We're uncomfortable that we're this committed to a single vendor. We like the vendor and their product, but 70 percent of our online traffic is with one vendor," or, "We have a set of options that have affiliations we don't like," like a GDS product. I would love to make an acquisition and take care of a lot of those problems for TMCs. And they would love to have the expense piece. It's exactly what they're asking us for.