Newsmaker: Amex Taps Tarte's Midmarket Focus

<B> Newsmaker: Amex Taps Tarte's Midmarket Focus</B>

By Sarah Welt

Aiming to offer more personalized services to its midmarket customers, American Express last week formed a new unit, American Express One, to focus on companies with less than $10 million in travel volume.

The formation of the unit follows the agency's acquisition of Travel One (<I>BTN,</I> Oct. 26, 1998), a New Jersey super regional whose client base includes many smaller companies who chose the family-owned agency specifically for its more personal style.

American Express One will be headed by Travel One COO Scott Tarte. The new unit will encompass all of Travel One's existing middle market accounts, as well as those of American Express--a group that has a combined annual travel volume of $3 billion.

Small and midmarket businesses "are an underserved market" to which American Express "can bring a lot of value," said corporate services president Ed Gilligan. "There are opportunities to consolidate buying clout more effectively, and all of this gives us a great platform to add value to customers. We can leverage the brand and infrastructure but deliver local service."

Tarte, who reports to Gilligan, is using the new title "business unit leader," at least for now. He is being assisted by a team of seven, including Wendy Radtke and senior vice president Charles Roumas from Travel One and Amex's Rich Miller and Rion Needs. Roumas will be responsible for the eastern region while Radtke takes the Midwest. Miller will continue to run Amex's small business travel division, but now will focus exclusively on accounts with $500,000 annual volumes or less. "We will treat it as a different region," Gilligan said. "Today that region represents almost a billion dollars."

Needs, who heads the Western region, also will be charged with spearheading the technical integration of the two agencies, a job scheduled to be completed by June 30.

Rick Routhier, who previously had responsibility for midmarket company travel sales and operations, now will focus on corporate and purchasing card sales to companies of that size, while Tarte takes over responsibility for client services.

While American Express One is a legal subsidiary, Gilligan said a single supplier relations group will handle vendor negotiations for both American Express and American Express One.

The agency already has middle market divisions in Brazil, Canada, France, Mexico, Sweden and the United Kingdom, and there are no plans yet to brand those separately. However, "when we believe the market is ready in other places, we'll do it there as well," Gilligan said.

Since the acquisition, Travel One president and CEO Jeffrey Harrow has been concentrating on client retention, acquisitions and electronic commerce opportunities. "There are a lot of travel agencies for sale, and we are trying to come up with criteria to look at the ones that have contacted us so we'll have a well established strategy," Gilligan said. "You might see more joint venture deals in '99."

In related business, American Express last month named Pamela Arway to the position of senior vice president of global supplier relations for its corporate services division. Arway comes to New York following 12 years at American Express Canada, most recently heading its corporate services division. Arway will handle all supplier relationships--including airlines, hotels, car rental companies and CRSs--and manage existing supplier relations groups in the United States, Europe, Asia-Pacific, Latin America and Canada. She will report to both Gilligan and Charles Petruccelli, president of Amex's international travel services group.

In other news, American Express Canada last week formed a new management consulting practice to help companies with their T&E expenditures.