Buckman, Back In The Saddle At WT BTI, Sees Growth

Mike Buckman planned to return to the travel industry late last year, as CEO of WorldTravel BTI, after a three-year stint as president and COO of real estate services provider Homestore.com Inc., but the events of Sept. 11 accelerated that timetable and he came fully onboard at the mega agency on Sept. 13, 2001. Buckman began his career at American Airlines and has held senior positions with American Express Travel Related Services, Lifeco Services Corp. and Worldspan, where he served as CEO from 1995 to 1999.

Business Travel News editors David Meyer, Jay Campbell and Ben Chapman had the opportunity to speak recently with the travel industry veteran. He noted his company's plans to show products at the National Business Travel Association convention this week, including consulting and information product Travel Procurement Solutions, Travelagent.com, its low-cost, Internet-based travel agency services offering designed primarily for smaller customers, and NetSearch, which provides Web search capabilities and reporting. WorldTravel also will unveil a certification program for technology products.

The crux of the conversation was on recovery, growth and the changing business climate.

BTN: Are travel management companies still waiting for the dust to settle to see how people are going to adjust to the slower travel volumes and pressure from clients and suppliers to lower costs before you can judge whether or not acquisitions are a good idea?

Mike Buckman: Having been through the McCord acquisition has given us the confidence, the positive courage. I'm not going to consider doing another acquisition in 2002, but we will certainly be out considering things in 2003. We would like to have our growth be a balanced mix between organic growth and the things we acquire through our own sales efforts and acquisitions. It's nice to have people with a different point of view, different sets of experiences to bring in more business. It helps the overall organization, so we believe acquisition does make sense, but not as the sole source of your growth.

BTN: Are there assets from the McCord Travel acquisition that have the potential for growth, such as the entertainment division?

Buckman: Yes, we are happy to have a stronger foothold in entertainment. It's high touch business. We've been able to learn a good bit from what Hoffman's done. We want to keep that name and good reputation, but it goes beyond the entertainment business.

BTN: Is the McCord integration completed at this point?

Buckman: We're most of the way through. We still have some back-office integration, but we're probably 90 percent done. We still have an aggressive plan. Those things you don't want to slowly level through, you want to do them as quickly as you can, being as considerate as you can to all the people and customer issues.

BTN: You retained the leadership, including CEO Bruce Black, so what are they doing differently?

Buckman: Their approach is much different than the way that WorldTravel has gone after the larger meetings, and McCord has been more in the promotions and incentives. That's a gross generalization, but we really were in complementary areas. I feel good about what Bruce and the team put together in terms of a plan.

BTN: What's your forecast for corporate meetings consolidation?

Buckman: I got an update from Bruce and the team a couple of weeks ago. They're seeing a good bit of activity that is encouraging. 2002 is not going to be a terrible year, it's not going to be a great year but we're pretty close to our plans and expectations on our end, and we're encouraged by that. Now we're getting a feeling that 2003 could certainly be a better year.

BTN: So far, WorldTravel BTI has had a 44 percent compounded annual growth rate. Is that a rate you can continue?

Buckman: No, I would love to say it is. I don't think 44 percent is sustainable. At least we may have restricted our ability to grow at that rate based on the things we did do after 9/11. We didn't want to restrict our ability to grow at all. But we said prudently, not knowing what the future may have in store for us, let's try and make sure we moderate some of those things. We think we can grow at a double-digit rate, probably not at 44 percent, but we can continue to grow. That is one of the reasons we have been able to attract really good people and people want to be part of it. So in some ways that growth may be almost a necessity. That is why I wanted to come and be a part of this.

BTN: Is Houston still at the top of the list of cities where you would most like growth to occur?

Buckman: Yes, our business is principally in the major metropolitan areas, because that's where most of the big corporations are headquartered. McCord/Hoffman clearly has given us a bigger presence in Chicago and Los Angeles, but South Texas is an area where we're not, and Houston is the fourth largest city in the United States. Another place that's not only tough for us, but also tough for the others is South Florida. There may not be quite the corporate presence there, but if you're doing a lot more global activity, especially if you're doing business in Latin America, it's a very important thing that we have a presence there.

BTN: You've had some recent success in Boston as well.

Buckman: We're pleased with that. Boston is another area where we have a big door of opportunity open to us.

BTN: Because of the McCord acquisition, do you feel that WorldTravel has gone through the recovery?

Buckman: Within WorldTravel, yes, I think we recovered. We're running 10 percent ahead and we've got very high client retention. We've got $400 million in new business since Sept. 11. We've got an energized, enthusiastic, highly motivated employee group. We've been able to reintroduce most of the benefit programs and the things we pulled back after Sept. 11. We feel very fortunate. We feel like we're back, not to Sept. 10, but back to March 15. It's back to where we're running 10 percent better than March 15 last year. We feel pretty good about that.

BTN: But the rest of the industry is not in the same good position?

Buckman: No, and I don't take a lot of pleasure in that. I wish the rest of the industry were in the same boat with us.

BTN: How far away is the industry?

Buckman: I don't know. I think it has a way to go and, in some cases, it's never going to be back the way it was, we've got to do it differently.

BTN: Is this going to be a strong fall?

Buckman: I think we're going to see slow, gradual improvement. Activity is still down a good bit from where it was a year or two ago. Some are back, some are ahead of where they were a year or two ago, but others are down still 60 percent. So it's going to take awhile. If I took our base across all our customer mix, we're probably down 15 percent.

BTN: We had a sense before the spring that there was pent-up demand. But we don't get that same sense now.

Buckman: No, I don't get that sense either. They're looking at lower-cost ways of doing things. There are more companies that now, when you put in your price comparisons or your carrier list, will put Southwest or Jet Blue on your list, where they weren't there before. That certainly should be a concern to the major carriers.

BTN: The upside to this downtime we're having is that senior management is much more cognizant of the value of the travel manager than they've been in the past. How has that changed the way you're interacting with clients?

Buckman: Danny and I were talking about how we never could recall any time in our days of selling or bidding for business where we had the vice president of security or risk management involved in the bid presentation before. To me, that's a real sign of the times and that things have changed. Probably the most significant change, but it's not everywhere, is that you've got the chief technology officer involved more often now. You've got to worry if you're violating their corporate intranet security, the firewall.

BTN: Are you seeing more CFOs?

Buckman: We've seen a lot of CFOs. I don't know about that being more or less. The CFO is pretty much involved if it's a purchasing decision. It's more the CTO and this new risk management or security person that wasn't there before.

BTN: How does being 10 percent ahead of the game over last year, and the comparative weakness of a lot of the other players in the market, affect the competition between WorldTravel and the other big travel agencies?

Buckman: In that area, I don't see how much has changed. The pricing is competitive, and sometimes I wonder whether there's that excess capacity that they have got to build, whether they're pricing sometimes on the margin. That's none of my business, but if you look at some of the things that people have done either to retain a customer or to try to gain a customer, the pricing is impressive.

BTN: Are margins shrinking?

Buckman: If you're just doing the same thing you did year in and year out, you didn't add PeopleTracker, you didn't add the other things, your margins would go down. There's always going to be the competitive pressures on your margins. We have to continue to find new ways to be more efficient in order to maintain margins. For us, that's part of our objective: it's not only increase global transactions, but sustain the margin. That's the only business we're in.