This already is a watershed year in consolidation and reorganization of large travel management companies, and many of those changes have affected their meetings management products. As the market shifts in anticipation of growing convergence between corporate transient and group travel management, agencies are staking out their territories and gearing up multinational expansion initiatives.
The recent changes among mega travel management companies are expected to give their customers more opportunity to manage transient travel and meetings centrally. Agency executives said they plan to step up cross-sales initiatives between transient and meetings divisions and offer a more comprehensive plan for their clients' entire travel expenditures. However, consultants said that beyond the initial leveraging power, there is little to gain in consolidating all travel and events with one management supplier.
Every major travel management company recently has undergone restructuring or consolidation. American Express Business Travel consolidated each of its consulting practices into one new brand; Carlson Wagonlit Travel recently acquired Navigant International; and early this year partners Hogg Robinson and BCD Travel split, taking with them several smaller agencies.
Though the agencies' size and the prospect of having one supplier for transient and meetings management initially may be attractive, said Tom Wilkinson, president of TRW Travel Consulting in Pennington, N.J., there likely will be separate meetings and transient services within those travel management companies.
"There is a significant functional overlap between travel and meetings. They both buy services from airline, hotel and car rental vendors, but the purposes and the people involved in meetings management tend to be very different," TRW Travel Consulting's Wilkinson said. "Every TMC would like to move into the meeting space, but they're now forced to partner with third parties. The problem then is that the logistics of managing and tracking meetings get to be more complex on the back end."
Carlson Companies in late April announced it would buy a majority stake in Carlson Wagonlit Travel and buy rival TMC Navigant International
(BTN, May 1). The move may mean some changes for TQ3Navigant Performance Group—Navigant's meetings and incentive management division—and Minneapolis-based Carlson Marketing, which focuses on marketing, meetings and event management.
However, reorganization would not begin until the deal is approved, said Carlson Marketing in a statement.
"We're not in a position to discuss any Carlson Marketing/Navigant Performance Group scenarios at this time. These are topics which will be considered during the course of integration planning but nothing will be finalized until after the Carlson Wagonlit Travel/Navigant deal has received all required regulatory and shareholder approvals and has closed."
Peter Moen, vice president of business development for Carlson Marketing, said that though Carlson Marketing has handled complex, high-touch events for decades and therefore has an advantage over agencies that are just beginning to look at meetings management, customer needs are becoming more sophisticated, so the company's services have to expand.
"Corporate procurement people are trying to move into the meetings area and many times their travel agency is trying to move with their clients," Moen said. "We're pretty unique in that we don't have to stretch our services into that area. We're already in the meetings business."
Carlson Marketing also has made the necessary process changes to make sure clients get both their transient and meetings data together. In addition, meeting planners are educated on transient issues and transient agents are educated on meetings management issues, he said.
One of the biggest industry trends that Carlson is positioning itself to serve is multinational services, Moen said. The industry may not be aware of how extensive the company's reach is, he said. "We are being asked, not just by large companies, but by a lot of our clients to help them with their meetings and event service needs in other countries," Moen said. Carlson Marketing provides localized service overseas, he added.
American Express Business Travel on May 8 announced a reorganization that created a global advisory services unit comprised of 200 consultants that integrates three travel practice lines: policy management, strategic sourcing and process management
(BTNonline, May 8). The Amex division that previously served meetings management has been rolled up into the new business.
The reorganization is aimed to unify Amex's multinational businesses and serve the growing market for consolidated global services, said Andrew McGraw, senior vice president and general manager of American Express Business Travel for North America.
Mike Streit, vice president and head of the Amex Global Advisory Services division, said the new division is focused on three main areas: policy consulting, strategic sourcing and process management. Meetings and event management is part of a customer's overall global travel management program.
There is a limit, however, to how fully TMCs can combine their transient and meetings management offerings, Wilkinson said.
"I don't think agencies will dominate the meetings industry. They will always be players because there is the connection between travel and meetings," Wilkinson said. "Agencies are certainly capable of hiring and having great meeting planning experts and meeting management experts on staff. The fact that they're both working for the same company doesn't make them the same function."
In January, the joint venture that owned the Business Travel International brand dissolved and partners Hogg Robinson and BCD Holdings split.
Hogg Robinson became HRG, and assimilated three meetings brands: Robustelli World Travel, which had a separate division for conferences and incentives management; Advanced Meeting Partners, which was acquired along with Sea Gate Travel Group; and Canada-based Bravo Meeting Management Solutions, which was owned by BTI Canada. HRG executives said they are in the process of merging the meetings brands under the HRG name
(Meetings Today, May 1).BCD Holdings begat BCD Travel, and the company's meetings management arm WorldTravel Meetings & Incentives, based in Chicago, expects to undergo changes too.
WTMI president Scott Graf said the reorganization of his parent company has been a positive development.
"We see this as a clear opportunity. Since we've become BCD Travel, we've had huge customer interest in what it means from a meetings, incentive and event perspective and it has pushed us to go opposite from some of our competitors—certainly different than Amex, where they're bringing things together. As the businesses move closer together, we're going to take the opportunity to separate these businesses lines more distinctly in terms of how we operate, who we target, et cetera. You'll see from us a more global look at the meeting, incentive and event industry," Graf said.
The market is "getting flatter," Graf said, as businesses look to consolidate their overall travel volume and leverage their global spend. Now that corporations are looking to leverage multinational volumes, WTMI can expand overseas along with its customers, he said.
"We'll have a global look, regional approach and I think we have to have local service," he said.
Customers who wish to use WTMI services multinationally may have different price points for various regions, Graf said, based on local market conditions. Sourcing strategy services in Europe, the Middle East and Africa may be consolidated in practice but priced differently than services in Asia/Pacific countries.
"That truly is a value to the customers who see that as an opportunity to provide more volume to a company like us and request and deserve better deals," he said.
WTMI will continue to stay "linked at the hip" with BCD Travel, but will remain separate in pursuing new business and in event production. Still, Graf said the relationship of WTMI to its parent is closer "than any of our industry competitors" to their respective owners. Graf said some new customer growth is crossing over from BCD transient customers taking on meetings management.
"It's certainly on the increase," he said. "Nearly 80 percent of all BCD Travel requests for proposals today have a significant meetings, incentive or event component in them."
WTMI also promotes BCD Travel's transient services to meetings customers, he said. While the transactional part of meetings management—sourcing, consolidation and leveraging—is growing closer to transient travel management, high-touch service is still needed for events and WTMI is targeting both pieces of business in all parts of the world, Graf said.
Historically, as the industry players have consolidated in the past, smaller agencies have risen up to fill in the need for medium-sized, focused TMCs, Wilkinson said. That leaves plenty of room for targeted meetings management providers.
"It always raises the question, whether in meetings or transient travel, if a gigantic organization can truly focus on less-than-gigantic customers," he said.