German Buy Underscores Expedia's Growth Focus

With last month's acquisition of the Munich, Germany-based travel management company MTM Reisen, Expedia Corporate Travel now claims the largest international presence of the three online-originating TMCs, which include Travelocity Business and Travelport. The acquisition was just part of a larger strategy—which also included the development of one integrated online booking platform across the United States and Europe—to appeal to large multinational clients. Jean-Pierre Remy, president of Expedia Corporate Travel, late last month discussed with BTN editors Jennifer Merritt and David Meyer the company's growth strategy during the past year and what the company looks forward to in 2007.

BTN: This isn't the first time Expedia Corporate Travel acquired a travel management company to gain presence in Europe.

Jean-Pierre Remy: It's always been the way we've built our presence in new markets: by bringing on a small team of people who know the market, have the right connections and, most important, have a very high standard of service.

BTN: Will growth be client by client?

Remy: We want to grow Germany, France and the U.K. first. We are also looking at Asia/Pacific and we hope that in the next 12 months we will make our first step there. For the rest of Europe, our strategy won't be to chase local clients, but to go with our existing clients to where they do business today. Our business presence in Europe is already six years old and we expect by the end of '07 and '08, Europe will become our first market worldwide.

BTN: How will you achieve that?

Remy: The strategy that we are building is to put our technology together with a very high level of service. We enjoy 80 percent online adoption on a worldwide basis and when our people call, they expect a very high level of service from people that can handle transactions that can't be handled on the Web site and at the same time, people that can support them online.

BTN: What technology investments have you made this year?

Remy: When we acquired Egencia in France, one of the reasons for this acquisition was for their technology. We have kept all of the mid- and back-office technology, but we have now merged the front-end technology with the one that we use in the U.S. Pretty shortly, we will have one totally shared and unique platform for bookings and reporting. That will give our clients the same platform across different countries to book and manage travel. That was one key area and we are now at the end of that investment. That will be launched in the first quarter of '07.

The second key investment was on data management services. The larger clients are more sophisticated in managing travel and more demanding, so next month we launch a new generation of travel reporting with a very strong focus on business intelligence and key features to monitor your spend and your savings. What is key here is that it's something you can use in the same way in all the countries we are in around the world.

We continue to invest a lot in technology to make sure that we maintain our technology leadership and expand the capabilities of our marketplace to really put together travelers and suppliers. At the same time, what is key for us is to be as global as possible. I realized when I started to run the business in the U.S. that the presence of ECT—in Europe in particular—was very much an unknown.

BTN: What are your new responsibilities since taking over for Cheryl Rosner, who left ECT in July?

Remy: I'm running the global business. Since ECT is going more global and we have more clients that we share between the U.S. and U.K., I have changed the organization accordingly and now we have a fully global organization with all the marketing, product development, finance and HR teams that report to me.

BTN: How many clients does ECT currently have?

Remy: We have about 3,500 worldwide. About one-third are in Europe and two-thirds in the U.S. Our European clients are growing faster than the U.S. because though the U.K. is two years behind the U.S. in terms of market penetration and maturity, the rest of Europe is four or five years behind the U.S., so we have seen very high growth of online corporate travel in Europe that we expect will continue at least for the next three years.

BTN: Are you growing ECT's salesforce as a result?

Remy: I would not comment on the number of people, but we are investing and continue to invest in growing our sales force. We grew our salesforce over the past weeks in the U.S. and we continue to grow in Europe in '07 and beyond.

BTN: Are large accounts an area of focus for ECT?

Remy: Absolutely. We have built over the last two to three years an offering that we believe now can meet the requirements of very large accounts. When I say very large accounts, I mean companies that have $15 to $20 million dollars or more in travel spend worldwide. These accounts are very focused on the tool you can offer them and they like to have very strong consistency on a worldwide basis. We've really invested over the last few years to build technology and services that will meet these requirements. I expect in the coming months and quarters you will see more large accounts joining us.

BTN: How is ECT handling the deregulation of global distribution systems?

Remy: No GDS today can guarantee full content in the coming months following the deregulations, so we have shifted away from the mono-GDS strategy to make sure we can guarantee full access to our clients. We can connect to three GDSs today: Sabre, Worldspan and Amadeus.