Joop Drechsel
BCD Holdings CEO Joop Drechsel added to his responsibilities the role of CEO of BCD Travel in January, when former CEO Mike Buckman became president of the Asia-Pacific region. Drechsel last week spoke with The Transnationalin his office here about the company's focus on Asia-Pacific, client needs there and the firm's global client profile. An excerpt of the discussion follows.
Are there too many mega travel management companies for the number of global corporate accounts?
No. We did a lot of research about that and looked 10 years ahead at where the market would develop. The market for TMCs in general will grow over the next 10 years more than gross domestic product will grow and the reason for that is: Business travel in general will grow more than GDP growth. This has to do with demographics, with [growth in] Asia, with the fact that--with a growing world population--people will continue doing business. Videoconferencing will indeed play a role, but it will never replace people meeting face to face. Other than travel, there is more need for meetings and incentives. Secondly, and it has to do with online applications, a lot of unmanaged customers will become managed customers in the future. That has huge potential because still the largest part of this market is unmanaged or very lightly managed by a local travel agency. We believe that over the next 10 years, a lot of those smaller or midsize customers will become our customers. We will move up and concentrate on the global, but also move down. So there's a big enough pie for those four mega agencies to satisfy their hunger.
You have talked before about expansion in Asia-Pacific. Can you quantify the expansion?
We have heard for the last several years from a lot of our customers that Asia had become very important for them. So we're not talking about the Asian market as such; we're talking about our customers going into Asia and needing their travel management company to manage their account in Asia. That's not necessarily everywhere in Asia. For our customers, it means predominantly China, India and not much more than that, although you get some isolated other areas, like Australia, for a lot of the Western companies and, of course, Japan. Other countries are less important for our customers. We asked [former CEO] Mike Buckman, our most senior person, to go to Asia and develop our plan, as well as further establish our bases, and that's what he has done. We have acquired an operation in Australia. Mike has helped us further stabilize our position in Hong Kong and China with the Jebsenpartner we have there, where we own 20 percent. We have said we have more ambition toward China and Hong Kong in the future--maybe even in the near future. We have established a head office in Singapore. We have accelerated our position in India, where we also opened a service center with more than 200 people in it for multinational customers who want processing and call center services for the region and the world, which is a major step forward in reducing costs. We have also established a new partnership in Japan, which is a country where you don't necessarily want to 100 percent own.
Was the Japanese partnership established just recently?
No, the partnership is the same as before, but the owners of the Japanese company have changed. We were not unhappy with the previous owners, but a change of partner could mean a lot of change for everyone and we have been very pleased with the way that's been cemented [with Top Tours, owned by Mizuho Bank, which operates under the brand name BCD Travel.] It was a relationship that came from TQ3.
How many employees are in Asia-Pacific?
If you add our employees together with partner employees, you're talking about something like 1,800 staff, out of a total of 13,000 for BCD Travel globally including partners.
Are onsite installations typical in Asia?
Yes, Asia is a different market. Online penetration is much lower, and particularly in a corporate or executive setting--sometimes driven by cultural differences--online booking is far less than it is in the U.S. in particular but also in Europe. I don't think that will change dramatically over the next several years. Overall, sizeable companies prefer onsites because people don't want to rely too much on the technology provided from a satellite. Also, the costs are lower to create [onsites there as compared with Europe or the United States].