Travel Agencies Still Search For Global Uniformity

<B> Travel Agencies Still Search For Global Uniformity</B>

By Sarah Welt

Trying to stay ahead of their corporate customers' demand for global travel management, travel agencies on both sides of the Atlantic are expanding into new regions, improving their technology offerings, building data warehouses and creating partnerships in areas where a bigger and more local presence is needed.

Mega agencies from American Express to Carlson Wagonlit Travel to Rosenbluth International--and agency networks like Business Travel International, First Travel Management International and Woodside Travel Trust--are working diligently to build technology platforms that can pull together global data in a unified fashion. Also on the drawing boards--and in the technology budgets--are designs to create globally standardized point-of-sale systems and self-service reservation tools, as well as worldwide intranet sites to provide communication and service links for agents around the globe.

Even as they attempt to standardize and centralize, however, travel management companies all face the international facts of life: Pulling together truly global programs is a feat not for the faint of heart. In the decade since the science of travel management was born, only a minute number of corporate accounts have actually achieved a truly global program.

Still, hope is on the horizon that as the world slowly moves toward more global systems, so too will travel management. One development that surely will ease the transition to global data collection, many said, is the introduction next year of the euro by 17 European Union countries. At the same time, cross-border ticketing, if allowed by each Country's national bank settlement plan, promises fundamental change in the way agencies do business globally.

As the travel management services provider for the European Union itself, Carlson Wagonlit Travel was one of the first travel agencies to use cross-border ticketing. The merged entity of one U.S. mega agency and one French one to provide worldwide service, it recently announced several new global initiatives.

In March, Carlson Wagonlit launched Business Advisory Services, a new consulting arm for the United States and Europe, and Project Mercury, a proprietary global technology platform with its own front end designed to seamlessly pull together data from diverse CRS systems (<I>BTN</I>, April 13). Project Mercury will begin beta testing at a U.S. location by the fourth quarter and roll out nationwide in 1999. A beta test in Europe is scheduled for the end of 1999 as well.

In Europe, meanwhile, CWT is consolidating into large reservation centers containing the latest call center technology. It plans to have 23 of the new business travel centers, each with 60 agents, operating by the end of 1999. Liliana Frigerio, senior vice president of worldwide sales and account management, noted that the rationale is to hold down cost while at the same time giving customers better service. Ultimately, Frigerio said, the goal is "to have a service center in Europe that can service the whole of Europe." While that is not possible now because of cross-border ticketing limitations, she said "this will be closer to realization as soon as the euro hits Europe."

As for global reporting, CWT is consolidating data through the use of its own back-office software, WorldOne. The company has two data warehouses, one in Brussels and one in the United States.

Still, Frigerio acknowledged that the quest for truly meaningful global data remains elusive in the short term. In the global environment, "you can't go faster than reality," she said, noting in particular that "telecommunications are not at the same development pace globally." At the same time, cultural problems and the normal evolution of the marketplace make it logical for some regions to be farther ahead in their quest for global programs than others are. "It is good to be ahead of the marketplace, but not so far ahead that you frighten people off," Frigerio noted.

Carlson Wagonlit has five or six accounts it would deem truly global, and eight or nine more it services as the sole travel management provider on more than one continent "where that client is present and needs agency services," Frigerio said. "We know very well one size doesn't fit all."

On the European continent, CWT's weakest link is in Germany, Frigerio acknowledged. But she noted that's something the agency quickly plans to fix, perhaps through external acquisitions. "Large bids are going on at the moment," she said. The mega agency also is concentrating on a few important initiatives in the Asia/Pacific region. Said president Travis Tanner, "You'll see us very active in acquisitions in Asia/Pacific and Latin America. Where today it's not possible to have more than single-digit market shares, we'll start to see agencies with 15 to 20 percent market share--I'd say next year in the United States, the year after in Canada, and the year after that in Europe."

American Express, meanwhile, seems to be headed overseas on a different route, using the joint venture model it developed with Havas Voyages of France as its blueprint for growth in several countries around the world. A joint venture partnership between American Express and the BBL Travel subsidiary of Bank Brussels Lambert of Belgium last month created the largest travel agency in the Benelux region (<I>BTN</I>, April 13).

For its multinational customer base, American Express senior vice president of corporate services Jud Linville said "this is most likely the year" the agency will provide standardized card and agency product offerings on a global basis--beginning with its AXI automated booking system, which should roll out to four or five overseas markets by year-end. "I am suggesting that we will offer card and travel on a global basis, where there are not different affiliates or alliances but dedicated P&L that someone would manage," he said.

The Amex global team, including the heads of its United States and European corporate businesses, has been meeting for the past six months to focus on globalization in general--and global account management in particular, Linville said. Among the team's biggest challenges will be achieving standard pricing and service levels on a global basis.

To Amex, standard pricing "doesn't mean the same price around the world, but the same pricing components," including "a transaction fee model we can use around the world," Linville said. Still, he acknowledged that it has been "unbelievably" difficult to create systems that work as well in other countries as they do here.

"If we are talking about a fully integrated global offering, that hurdle is not going to go away in the next 18 months," Linville acknowledged.

American Express corporate services president Ed Gilligan said the agency has been working for quite a long time on building a global data warehouse that would combine card, travel and expense report data. While it has begun some initial reporting, a complete data warehousing system is still three years away, Gilligan said.

Linville said Amex has between one and two dozen accounts across both card and travel that are "managed very tightly on an integrated, cohesive, global travel management basis," including "global sourcing, purchasing and process management." Close to another 100 Amex customers have consolidated and managed travel programs that are global in nature, though without "an exceptional degree of consistency around the world."

Like its mega competitors, Rosenbluth International also is working diligently on selling the concept of global account management, but still has a limited number of truly global customers. Said vice president of business development Bob McGurk, "We are either handling around the world or have a mandate to handle around the world from a central point--either in the United States, Europe, or Asia--eight accounts."

But, McGurk added, the demand for global deals has been increasing rapidly over the past 18 months. "I've been personally involved in five proposals since Jan. 1, and all five have been global in scope, nature, concept and theory," he said. "Clients may not be ready for a global bid now, but they want an agency capable of handling their needs on a global basis."

Declining to cite details, McGurk said Rosenbluth does have a global expansion plan, and noted its January acquisition of Philips' $62 million corporate-owned agency in the Netherlands (<I>BTN</I>, Jan. 12).

On the technology side, Rosenbluth provides global data collection through its Global Distribution Network. "We operate on a dominant CRS platform and our international offices are linked through the GDN. All data from the Apollo/ Galileo platform is forwarded electronically into Vision, our back-office system," McGurk said.

Even as American agencies scramble to get their arms around the demand for global services, business travel organizations on the other side of the Atlantic also are working hard to pull together global data, improve their technology and meet the needs of their clients on an ongoing basis.

At the U.K.-based Hogg Robinson plc, which is also the managing partner of the $20 billion global joint venture Business Travel International, the decision first comes down to whether the customer wants Hogg Robinson or BTI to provide global services.

Said David Radcliffe, who serves as CEO for both BTI and Hogg Robinson, "It depends very much on what the international client is looking for--some clients want to be serviced by BTI, some want to be serviced by Hogg Robinson or by (BTI members) Quoni or Bennet. We are unique in being able to offer whichever preference they desire."

Noting that the term "international" better fits the current state of the corporate market than the term "global," Radcliffe agreed that the interest in international travel management and purchasing programs is definitely on the rise. Most of these take place "over perhaps between five and eight territories," he said, with the predominant links between North America and the United Kingdom or North America and Europe. In addition, "we are seeing an increase in linkages between the Far East and Europe and North America," he noted.

BTI has about five accounts Radcliffe considers international, he said, though he also noted that the introduction of the euro likely will increase the pace of European consolidation.

Like its mega agency counterparts, BTI offers a global hotel rate program, integrated data and a global group program. In addition, Radcliffe said, "we are introducing information systems that can lie across client communication systems globally." This will allow BTI to pull together data from diverse CRS systems.

<B>Other Agency Networks</B>

In the United States, Bethesda, Md.-based Woodside Travel Trust also is working to provide its agency members around the globe with the services they need to handle clients on a multinational basis. But "I will tell you that with honesty, I don't think any are really global accounts," said president and CEO Ivan Michael Schaeffer. Still, in recent months, Woodside increasingly is finding its own name--and not just the name of a single member--on bid lists, he said, as corporate customers reach for global data.

To build a presence as a global network, the consortium is in the midst of a huge two-year data effort "that will lead to our consolidation of all transaction data of all WTT partners," Schaeffer said. The data warehouse will pull together data from individual agencies' back room systems in standard formats.

The organization also has been building an intranet that by August will link all 5,200 Woodside locations. This is part of a larger initiative "dealing with globalization and communication in entirely new ways," said Schaeffer.

Another global agency consortium, First Travel Management International, also has expansion plans for this year, though it will be focusing more on the Asia/Pacific region than on Europe, according to Robert Moses, vice president of corporate development for the Americas. To that end, First Travel Management in March opened its first regional office in Singapore, and plans to move into Australia, Japan and Korea by the end of the year.

First, whose American franchisee is Hickory Travel Systems, has been focusing on internal consolidation in 1998, expanding its core business with existing accounts. On the technology side, the organization has been busy with the expansion and utilization of its global data set and reporting system, which rolled out in January.