Charles Petruccelli
U.S. business travel bookings through April were better than expected but trending down again in May, said American Express global travel services president Charles Petruccelli last week. He added that business travel in Europe did not seem to be affected "so far," showing instead "a solid, positive trend." Globally, American Express last month reported 13 percent higher corporate travel sales of $5.4 billion for the March quarter. Petruccelli last week met with The Transnationalafter taking questions from attendees to his keynote speech at the Paragon Business Travel Conference & Expo here. "After having finally recovered from the dramatic 2000/2001 period," he told the audience, "The industry is once again in total turbulence and back into a period of instability." Petruccelli also addressed Carlson Wagonlit Travel's claim that it is now the No. 1 travel management company: "We are a public company. I know my number; I cannot comment on their number," he said, adding essentially that size doesn't matter at that level. Excerpts of the discussions follow.
How do volume trends look if you exclude financial services companies?
When you look at the way companies are reacting to the current economic situation, some financial services companies are taking actions to retrench and reduce their T&E expenses. Others are not--they are actually continuing to grow. Other companies in, for example, the technology sector already made decisions to retrench. So, it's more the perception that companies have of their situation in the next four to eight quarters, and the opportunities they have versus the risks they have, that is driving their decisions. Those who believe there are opportunities because they can take market share or because they have contracts allowing them to grow their business actually are going to spend more, while those believing they are exposed to some risk are retrenching, and that is independent of the industry in which they operate."
Are you in any different acquisition mode than a few years ago?
What are the markets where we need to have the clout, ability and expertise to service our customer? Against that, we have three strategies for growth: organic, joint venture or acquisition. Depending on the profile of the market, we will choose one of those. If we choose organic, for example, organic is very fast and we don't need to buy anything to grow 30 percent every year, right? Then we choose joint venture where we believe our model is best complemented by a local partner that has the local expertise that would give extra strength to our global expertise. And then we would go for an acquisition when there is an opportunistic acquisition that is happening if its customer portfolio, technology and capabilities complement ours.
Has American Express benefited in the past from saying it's the biggest travel management company?
What's important is not the question of being the biggest, it's the ability to service wherever your customer wants you to serve with the appropriate size required to have the expertise, knowledge, experience and clout in the market. Is that $22 billion, $25 billion, $28 billion in the end? Those numbers are volumes of sales. They are not transactions; they are not revenues; they are the volumes that are passing through us. The true businesses we have are the transactions and the revenue we generate from them. I feel good about our win-loss ratio vis-à-vis any of our competitors.
Does the GE Money acquisition open up any opportunities with GE's business travel account [currently handled by Carlson Wagonlit Travel]?
That was not part of the deal. At the same time, I am quite happy that the GE travelers are using a corporate card with the American Express name on it because the more they hear about the American Express name and the more they see the value that our colleagues can bring to them, they might be attracted in seeing the other side of the corporate services solution and think that the other side could be attractive.
There's not enough talent around the world. How are you managing that, especially in China and India?
It's complex. We are all looking for the same people. It's difficult to train, and retain and develop loyalty programs that give you the ability to re-grow your organization and build your experience. We do hope the situation will stabilize soon, but it puts pressure on costs, on the training programs, on leadership.