Carlson and Wagonlit Partners Formally Seal Union

<I>New York</I> - Like many long-betrothed couples anxious to get on with their future, Marilyn Carlson Nelson and Jean-Marc Simon last month fast-forwarded what was supposed to be a five-year engagement and formally sealed the union of Carlson Wagonlit Travel two years ahead of schedule.

Nelson is vice chairwoman of Minneapolis-based Carlson Companies; Simon is president of Compagnie des Wagons-Lits. Curt Carlson, chairman of Carlson Companies, and Gerard Pelisson, vice chairman of the Accor Group--the French hotel company that owns Wagonlit--exchanged Tiffany and Cartier pens to symbolize the union of "the best of America and the best of France."

In making their union legal, the two partners bring together 41,000 locations in 138 countries. "We didn't listen to our detractors, but to our hearts," said Curt Carlson. "And we found more compatibility than differences."

Pelisson said that throughout the prenuptial negotiations, "each side found it could learn from the other and that our differences were a strength, not a weakness." And both sides agreed that the corporate customers' increasing interest in global travel management programs gives the edge to the agencies with the broadest reach and the deepest pockets. "Building separate worldwide networks would have meant a lot of capital and time, and fighting each other over Asia," Pelisson said.

The two firms already have spent some $140 million on the development of a global point-of-sale system, scheduled this week to begin a two-month beta test. The system is expected to improve productivity so dramatically that the agency "is thinking about remarketing it through the CRSs to other agencies," said chief information officer Dick Smith. Among its features will be an optional "telephony" component--an automated voice recognition system that travelers can use to order repeat trips--that will roll out to U.S. customers in the third quarter and to Europe in early 1998.

Also in the works is a UNIX-based interface that will allow customers to make bookings using any automated booking system, scheduled for completion in six to eight months. Carlson's own automated booking-through-expense-reporting product, the ActOne suite, will be ready to ship to customers by April, and a Web-based system now in beta with 12 customers will be available at about the same time.

Carlson Wagonlit has contracted a major new technology partner to rebuild the back-office system, Smith said, although he declined to name names until the contract is final.

Meanwhile, Travis Tanner, global president of the new Carlson Wagonlit Travel, said that since announcing the planned merger three years ago, revenues at the two companies are up $3 billion to a record $13.8 billion, and staff has increased to 11,000. Virtually all large American customers outside the government division are now on fee-based contracts, he said.

Noting that the merger gives Carlson Wagonlit Travel "a chance of a lifetime" in global corporate consolidations, senior vice president of global sales and marketing Liliana Frigerio said that the company will this month begin reviewing all European accounts--and particularly those in Germany, Holland and Scandinavia--with an eye toward converting them to fees. The agency currently receives fees from 30 to 40 percent of its European customers, but there is wide variation on a country-by-country basis.

CWT expects to cut European costs by 20 percent by standardizing equipment and software used by its business travel centers in eight countries, and by installing point-of-sale software, said Herve Gourio, president of CWT-Europe, Middle East and Africa.