FCm Travel Solutions president of the United States and the Americas Gregory Lording this month spoke with BTN
travel management editor Seth Harris about the Australia-based travel management company's U.S. growth, the regionalization of its businesses, the rebranding as FCm Travel Solutions of Boston-area based TMC Garber Travel—in which it has a 26 percent ownership stake—and the demand outlook heading into 2010.Business Travel News: What changes has FCm made in the United States in the past year?
Gregory Lording: We are making a stronger commitment to growth in United States. We moved our head office to Chicago. It previously was headquartered out of Vancouver, Canada. We did have two FCm teams in offices downtown from about five years ago, and we had Bannockburn, which we acquired four years ago
(BTNonline, April 3, 2006).
BTN: When you took over your role as the head of North America in 2008, the company was aggressively opening offices in the region. What does your footprint in the region look like today?
Lording: At the beginning of the year, we added San Francisco. We are now in seven cities, with Seattle, Los Angeles, Dallas, Phoenix, Chicago, Boston—now that we have management control of Garber and that's rebranded—and we have put an office in Washington, D.C. We are looking for more expansion and new cities to go into. Our financial new year is in July, so that is when we start to look to see what the expansion will be. We are looking at a couple of more cities next year.
BTN: What are you gaining by opening these new locations?
Lording: It's account management and sales offices. We don't really do call centers. Particularly in these other cities where we are opening, it's that SME corporate model—accounts under $2 million where it is locally managed and they want to deal with people locally. In those cities, we have operational teams. We just don't have one messy res center of like 500 people, where people call in and they just take a caller. Every client has a dedicated office or team.
BTN: What is the configuration of the sales team?
Lording: We have one overall sales team that is broken up into the regions. Out of the Chicago area, we have four business development managers. Out of the Boston business, we have eight business development managers. We have a separate sales force on the SME side, where we have about 30 business development managers.
BTN: What is the sales mix based on account-size segments?
Lording: Our SME business is about 30 percent. There is additional business that is light corporate spend, and if you brought it all together, then 50 percent would be SME and the rest would be managed business of over $10 million.
BTN: What does FCm's U.S. groups and incentives business look like?
Lording: Both in Boston and Chicago, we have a groups and incentives division. Our conference and incentive brand is CiEvents. We are looking to roll that out in the United States next year. It's in its preliminary stages. As we look at expansion into other cities and brands we want to bring in here, CiEvents is on the cards. We also have an entertainment brand, Stage & Screen Travel Services, which is in Los Angeles for two years now. That falls under the corporate banner, but is separate from FCm Travel Solutions.
BTN: This summer, Shannon O'Brien took over the role of executive general manager of FCm Travel Solutions globally. How has this move affected the North American business so far?
Lording: One of the moves we made was that we moved our global head offices to Brisbane, Australia, but we also regionalized the areas. Now we have EMEA, Asia/Pacific and the Americas. Now, as part of the Americas, Latin America reports to me. Before Latin America reported to Europe. We've built up a strong network in Latin America. We are now building closer ties between our businesses there and the United States for sales opportunities. We definitely have a strong presence with the main countries that we are in.
BTN: Are you targeting locally based clients in Latin America, or are you just serving multinationals based elsewhere who do some business in Latin America?
Lording: Initially, it was for our clients that had business in Latin America, but now we are looking at the growth opportunity and targeting business down in that region. Businesses that will go globally as well for tender that may come out of there as well as business that is going in there, and business that trades mainly in Latin America.
BTN: In August, Garber was fully rebranded to FCm Travel Solutions for its corporate business. Why did you make that change after previously running the business as Garber/FCm Travel Solutions?
Lording: Over the last few years, we've been working closely together. As FCm has come over here and moved the head office to the United States, we already re-branded Bannockburn, and clients were starting to realize that we have a single name and that is advantageous. People were getting confused in the marketplace as to who is Bannockburn or Garber or FCm. Over the course of the year, the business we've been transacting globally has come into our businesses here and vice versa for the business that goes out of here. It is easier for clients if you are dealing with one name. It still is a separate company, we are only an equity partner there. It reports up, but it is separate with its own legal entity name. We have multinational business that is run out of both the Garber and Bannockburn businesses. What we've done is consolidate our sales teams and account executive teams across the whole, so that the businesses are aligned.
BTN: Does the rebranding signal plans to take an additional stake in Garber?
Lording: We are sticking with 26 percent at his stage. The relationship has been working well.
BTN: How would you describe FCm Travel Solutions' U.S. business performance in 2009?
Lording: It's been tough, and we shared that with everybody. We've noticed since September, and in the SME market in particular, that it is much more buoyant with good upswing there. People are starting to travel again and we have new business coming in. There certainly is more confidence restored in the SME market. Managed travel is more sluggish because everybody has cut their costs and travel policy. Some clients are starting to spend more but certainly not as much as the SME.
BTN: What trends are you seeing in international bookings?
Lording: The big thing for international is trying to get a high yield with people traveling business class and in the front of the bus more. That's still sluggish in the north end of the plane. International travel has picked up, but much more in the lower booking classes.
BTN: Are any of your clients loosening their travel policies?
Lording: Definitely. When you go from a year ago, when companies were saying no travel at all for next month, those measures have stopped, and they are certainly loosening up the travel policy. There is more control and visibility, but people are traveling more, albeit more smartly.
BTN: Although business travel is starting to come back, some say it won't reach the levels seen before this economic downturn. Do you agree?
Lording: It all depends where the economy starts to pick up. It will pick up stronger on the larger accounts, as they pulled it back in and will have to work harder to let it out, and when they do it will be a belt buckle at a time. It really depends on the overall world economy. If we get confidence buoyed, we'll continue to grow. In a profitable time, profit breeds profit and it is easier to invest.