The BTN Group editorial director Jay Campbell last month spoke with American Express Global Business Travel executive vice president Julie Bottner about global servicing configurations and emerging markets. An excerpt of their discussion follows.
BTN: Is there a prospect for change to the travel agency regulations in China and for now, what sort of framework do you have there?
Bottner: Our partner CITS has the majority stake in the business, and we have the minority. We're happy with the partnership. We run the operation, largely speaking. It will be interesting to see how the regulations change. Right now, travel companies cannot own a majority interest in companies in China, but there's some signaling that that might be starting to shift. First and foremost, you have multinationals operating in China: McKinsey, Goldman Sachs, etc. Our other challenge is where to go from there. What is the opportunity beyond the multinationals, and how do you think about segmenting, profiling and targeting companies within China? You have to be careful; it's a great opportunity but also has some risk to it, especially for a company like American Express as a bank holding company with compliance and security and regulations. We have been holding the China Business Travel Forum for a number of years, and the point is to try and educate some of these companies about the value of the managed travel program. That's not a small thing, as Chinese companies tend to be pretty open, without a lot of structure in travel. I think we're getting there.
BTN: Do you think of service delivery more in terms of manual support or technology?
Bottner: It's all integrated. There are four key executives on [American Express Global Business Travel president Charles Petruccelli's] team, and we each have primary roles, but there is a lot of interdisciplinary requirement between the four of us. If we're looking for an online booking tool in India, that has relevance to service as well as the P&L. My primary responsibility is to make sure online and offline vision is intact, but on technology decisions I'm always [working] with [American Express Global Business Travel senior vice president and general manager] Mike Qualantone.
BTN: Beyond the online versus manual mix, it sounds like the mission is more about whether companies manage travel at all. What about other emerging markets you're responsible for?
Bottner: Some of the markets in Europe are a little more mature, but the key emerging growth markets are India, China, Singapore and Hong Kong. India and China are outpacing Singapore for the first time this year. Singapore is a rich market, and there's a lot of regional leadership there, but I don't think you can match what's going on in China and India right now.
BTN: People make generalizations about Asian nations regarding whether they are self-service oriented or white-glove-service oriented. Is China in one or the other category?
Bottner: We can speak to how the multinationals behave, but it's a great question of which end of the spectrum they would be on. Technology is very relevant in that country, but booking tools haven't really taken off, and they're still doing most of their travel through the human channel, if you will. In India, on the other hand, it's going to be very interesting to watch because it has a high degree of VIP and white-glove requirements—more so than we anticipated initially. And as the booking engines are becoming more relevant in India—there's a lot of buzz right now about India—when you drop these tools in, there are certain things they cannot do, so the question is, how high will adoption rise? The other thing that is important in emerging markets is there's a lot of demand and we don't want to commoditize the value of travel. There are a lot of expectations for service and it's as, if not more, relevant in these markets [than in mature markets]. For multinationals in China, India and Singapore, this notion of really taking care of service will continue to be relevant as this region grows.
BTN: A few years ago there was somewhat of a rush to either
start up or consider offshore servicing, and then there was a backlash. What
was the ultimate lesson of that, and where is it today in the mix?
Bottner: A couple years ago when we started to put voice
into India, it didn't work, and this happened across a number of industries. So
one key lesson was that it's not that you can't offshore, you just have to be
thoughtful about what you offshore. You have to think about what's core and
what's less so. We look at all our services and map them out, and we just
updated this blueprint last week. We were very clear about what you can send
out. A back-office function doesn't have the same sensitivity. Phone was a big
no-no for a long time, but I think that's changing. It depends on where you put
it. In Eastern Europe, it's a little less sensitive and they can pull it off. I
think as the world continues to globalize, this will continue. When we put
Universal Axcess in the United States, we got a lot of questions about why we
didn't choose a less expensive market. One thing I tried to help people
understand was that the United States is among our least expensive markets
around the world because of the tools and technology, productivity and expertise.
It's in the top three. I needed the expertise, and at the time we had it in the
United States. Now that we have figured out this globalized model, there are
Indian companies who want the same model in India—they want servicing out of
India for their Indian travelers but also travelers in Europe and in the United
States. And we're looking at that model now, where we might reverse it.