Anthony Grigson
FCm Travel Solutions is the corporate-travel division of Australian travel company Flight Centre Limited. FCm executive general manager Anthony Grigson last month spoke with The Transnationalabout the company's recent acquisition in the United States, as well as its ongoing global expansion and service philosophies.
We understand the acquisition of Bannockburn Travelin Chicago may not be the last for FCm in North America. But more time has passed relative to your initial goals about buying on the East Coastof the United States. Why is that?
We are not just finding one solution for the U.S. market. We had been looking at a number of different targets, and our priority was the East Coast, but the Bannockburn opportunity came to us, so we followed that through and in fairly quick succession were able to acquire the company. The East Coast still remains a priority for us. At the moment, we're talking to two or three targeted companies, but we are fairly picky in terms of making sure we find the right fit. We have come close on a couple occasions, but for one reason or another it just hasn't quite got there. The last time I spoke to you, I was probably giving some sort of six-month window. We have reviewed that and decided it's more about the right company than the timeline. We're also looking to expand our organic growth to other cities in the U.S. We intend to go into some new cities and we'll execute that in this coming financial year [beginning in July]. That probably would be more West Coast-based, remembering that we started our drive into North America out of Vancouver.
Are you seeking to offer consolidated multinational travel management or more of a regional approach?
We want to be able to stand behind what we're putting out there in the marketplace, so we're growing the international network. Bannockburn--while not a major piece in an international sense, because they very much have been (and will continue to be) a prominent nation-based rather than multi-nation based company--does give us opportunities and there is a handful of customers in our database that aligns with Bannockburn's database. Hence, we have been able to [cooperate] specifically in Asia on a few accounts. So, we are offering multinational consolidation right now, and not just in Asia-Pacific, but also in the U.K., and we do have a few accounts coming out of the States now, as well. Certainly, we see the importance of our next acquisition being able to deliver the next level of offering on multinational travel management.
Like FCm, Hogg Robinson Group has bought midsize agencies in the U.S.But, the largest U.S. multinational clients seem to still be most impressed with volume or size, and many have wondered whether bigger acquisitions might be the better path. How important is scale?
In terms of the size and scalability of being able to handle the real top tier of the multinationals, whether that be out of the States or Europe, our take is you don't necessarily have to buy massive TMCs to be able to deliver on that. The big players' multinational emphasis means they are not just in the States, and we're building an offering showing that we have real equity interest outside of the States, and I think that's an important point. We're trying to acquire or partner with companies that we're happy to put our brand across, so while we might not stack up in terms of number of countries, if that's a criteria, I think it's more about the quality of the offering and timeliness of its delivery, rather than the quantity. There have been some examples where companies have gone out with a global tender that is quite large in terms of geographic expanse, but when they get down to the second and third levels of reviewing [proposals], they're doing it on a regional basis. I think that's something that may continue, where companies globally try to look at whether there's one provider, but when it actually comes down to appointment, they are appointing regional companies.
In terms of your global ambitions, is there a certain timeframe you see as an acquisition period before integration?
We do do it on a year-to-year basis and we still have a number of market targets for acquisitions, including the U.S. And we have Europe as a targeted area, as well. Over and above that, when opportunities arise we will also look to them on a case-by-case basis. I'd say that will continue for the next couple years, but there is no mindframe that we should acquire a specific number by a certain date. We're not trying to be necessarily a globally dominant player; we want to be dominant locally and we think that cascades up to strength internationally. It's more of a bottom-up approach.
That line of thinking almost seems to apply to the networks like Synergi and Radius, no?
I don't agree. The likes of Synergi, Radius or Global Star have no substance at all. In their networks, they are really just a shop front for a common brand that doesn't recognize the market. They have no equity strength behind them, and therefore people can come in and out quite freely.