Mega travel management company HRG is reviewing its North American operations to ensure their alignment with its global model, Hogg Robinson Group CEO David Radcliffe today told
Business Travel News. "Increasingly, we are seeing more and more of our clients act internationally and it makes no sense to have our regions act state by state," he said. "Our clients are acting regionally and we need to do that as well."
HRG disclosed the strategy today in releasing its half-year financial results. "The North American part of our contingent has already formed into one region," Radcliffe said. "Now we are aligning our client and support approaches in that one region, and they can dovetail into the rest of the world when the client wants us to."
While HRG has been relatively quiet on the acquisition front, Radcliffe said he expects to make some noise in the coming months. "I'm very comfortable that we have the right service offering in North America, so I am not going to do them just for the sake of it," he said. "In South America, I'd expect to see us grow some more, and basically wherever we have a presence we will be looking to add there as well."
Meanwhile, HRG reported its strongest growth outside of Europe in the first six months of its fiscal year, which ended Sept. 30. In addition, the company claimed a client retention rate of more than 90 percent.
Compared with the same period last year, HRG said revenues for the past six months increased 3.5 percent to £154.4 million, with the largest year-over-year growth—61.5 percent, to £8.4 million—derived from its central division, which includes global marketing, distribution and system-usage agreements with suppliers. The report noted that market penetration of HRG's Spendvision expense management platform and the introduction of a new global hotel program fueled much of the division's growth.
While HRG Europe reported a revenue decrease of 1.9 percent to £109.1 million, compared with the first half of fiscal 2006, Asia/Pacific and North America showed increases of 18.3 percent to £7.1 million and 11.2 percent to £29.8 million, respectively.
Radcliffe attributed the revenue decrease in Europe to the heavy volume handled in the first half of fiscal 2006 related to the FIFA World Cup and restructuring costs of the company's European region, which are not expected to exceed £3 million.
The company also reported closing the acquisition of its Belgian partner, Weinberg Travel, last month
(BTNonline, June 28).