A lack of multinational capabilities within Orbitz for Business is partly to blame for the pending loss of the travel management company's best-known client, McDonald's Corp. A McDonald's spokesperson this month confirmed that the 120-nation fast food giant had "decided to move to a global solution." Sources said that provider is most likely American Express Business Travel.
A statement prepared by Orbitz Worldwide indicated that it would "soon introduce a new global solution" including "an integrated call center and fulfillment capability." In this regard, Orbitz lags behind the two companies with which it is primarily compared--Expedia Corporate Travel and Travelocity Business. Yet, while the latter pair has made progress in building out multinational solutions, even they admit that theirs are baby steps relative to the largest agencies' global footprints.
The trio has been known to decline to bid on some multinational business opportunities, but other transnational travel programs possess the configurations and patterns to grow with an online-originating agency. After all, a company operating in only the United States and the United Kingdom is multinational--and both ECT and TBiz have capabilities in those markets. Adding in a few more European nations and emerging capabilities in Asia-Pacific, these providers potentially cover the "universe" of quite a few corporate programs.
Largely in conjunction with key clients Discovery Communications and Lockheed Martin, Travelocity Business focused heavily on Europe last year. "As TBiz started moving up market, we realized that as you move into the larger corporate space, a broad offering is important since global consolidation is in the forefront for corporate departments," said Travelocity Business director of fulfillment products and services Joel Bailey.
ECT president Jean-Pierre Remysaid his firm serves "hundreds" of clients that work in multiple countries, and that the share of ECT's volume coming from the Fortune500 has grown to about 30 percent from less than 10 percent three years ago.
"We started to have more and more cross-country or international clients after we acquired [Paris-based] egencia in 2004," said Remy. "Historically, especially in the U.S., ECT has grown up with small and mid-market enterprises because we didn't have the capabilities in terms of technology, account management and global presence. Things have changed a lot. We have built those capabilities, and the perception of those accounts about what ECT can offer has changed."
Expedia over the past three years bought travel management companies in France, Germany, and the United Kingdom--and it is establishing a partnership in Italy. It's also building a new facility in the south of France to handle business in parts of France, Italy and Spain. For TBiz, two U.K. centers "support pretty much the entire Eurozone," Bailey suggested. "Our strategy has been to predominantly focus on U.S. and U.K. multinational clients, although we will continue to look at expansion opportunities."
ECT and TBiz each use two call centers in the United States, and both are exploring Asia-Pacific with their consumer online partners there--eLong for Expedia and Zuji for Travelocity.
"China is clearly a key market on the map for us," said Remy. "We hope that within the next six months, we'll get there in partnership with eLong. But the goal is to have clients [throughout] Asia-Pacific, and make sure we can serve them in Australia and India and other countries."
Meanwhile, both companies pitch the benefits of building technology anew. Whereas such global TMCs as American Express and Carlson Wagonlit Travel--and the predecessors of newer entities BCD Travel, FCm and HRG--emerged during an era when travel technology was more localized, ECT and TBiz give the impression that they're working off clean slates.
It's not that simple--just as the argument that online-originating companies don't offer human support is not that accurate. While systems at TBiz surely have some cross-border commonality, parent company Sabre Holdings also touts "single-sourced" multinational configurations with GetThere, the Sabre global distribution system and "traditional" TMCs. ECT's global offering, meanwhile, is as much pieced together by acquisitions as any other--and the company has had its own technology fits and starts.
"We don't have the heritage of the past or have to transform systems, people or processes," said Remy. "We have the cost of building, but not the cost of transforming the old model. Given the level of transformation you have to go through, I think I'd prefer to start from scratch." Yet, ECT has done some transforming, like in the U.S. when it swapped out the Worldspan GDS for Sabre, or in Europe when its own air-booking engine replaced one from KDS. ECT uses Amadeus in Europe and "mostly Sabre" in the U.S., whereas TBiz is all Sabre.
Meanwhile, Amex, BCD, CWT and HRG each have revealed internal efforts to further standardize their technology platforms around the globe.
Regardless of their configurations and footprints, all TMCs need to prove they understand local markets and can adjust to nuances. As with so many elements of multinational travel management, there are few absolute truths. ECT and TBiz may have started online and regularly cite high online adoption rates, but "traditional" American Express, for example, is nearing 50 percent online bookings in the U.S.
"I don't think there's a complete convergence," of the "Internet" and "traditional" travel management companies, said TRW Consulting's Tom Wilkinson. "I still think there's a philosophical difference and iTMCs are a little weaker for companies that need a lot of hand-holding, with first-time consolidations, etc. Strategically, they are more aligned with companies that do a lot of basic, round-trip travel and they're very conservative on when they will bid for clients that do not [heavily emphasize] automation. I do realize iTMCs have international rate desks, etc., and are building their multinational capabilities."