GlobalStar Agency Network Recalibrates Following Departure Of ATP

U.K.-based travel management company ATP International in July discontinued its membership in GlobalStar Travel Management over disputes about the agency network's operating agreement, following ATP's April acquisition of another U.K.-based travel management company, Instone International.

This month, the GlobalStar board approved the inclusion of London-based Chambers Travel Management in the network, effective Sept. 1, as the first step in filling the void left by ATP. The network plans to add one or two more agencies in the United Kingdom in the coming weeks and new partners in France and Germany by the end of the third quarter, Klebanow said.

While GlobalStar grapples with filling other holes in Belgium, the Netherlands and Norway left by ATP's decision, the group also is concentrating on expanding its network in other regions and aggressively driving global sales initiatives, following the March reorganization of a centralized management structure.

GlobalStar also garnered a 300 percent increase in funding from its members and altered its partner operating agreements, adding requirements for cobranding and market exclusivity member rights, according to GlobalStar chairman Peter Klebanow, who also serves as president and CEO of New York-based Ultramar Travel Management. Members were required to sign their new agreements by April 1.

Supported by ATP's private equity backers, Barclays Private Equity, the Instone purchase enlarged the company to more than E750 million and a network covering 20 countries, some of which infringed upon the new GlobalStar operating agreement.

"That started the ball rolling in terms of us understanding that there was a situation that might cause ATP be in a position to not be able to sign its partner agreement," according to Klebanow. "ATP has been a great partner. They have been generous with their time, funding and ideas. We ultimately had to make a decision as to whether the organization should compromise some of its ideals and structure and our overall philosophy versus preserving those things and moving on."

Client contracts that include service agreements with ATP for those countries where it had the GlobalStar license will not changed in the contract term. Clients then will have the option to add the new GlobalStar partners, Klebanow said.

With the ATP loss, GlobalStar now has 69 partners in 52 countries, including eight in the United States. So far in 2009, the network has added partners in Nepal and Poland and Austria-based Business Travel Unlimited, which has operating licenses in the Czech Republic and Slovakia, and will soon sign on a new agency in Romania, said executive director of marketing Mark van Iersel.

GlobalStar also plans to concentrate on building its network in the Middle East and Africa to support its oil and gas sector clients.

The expansion also is focused on bringing in larger TMCs, such as those in India, where van Iersel said there are efforts to add a top-10 player. The network has a partner exclusively operating in Bangalore.

The move to an eight-person central executive team under former American Express Business Travel U.K. executive Steve Hartwell, who in July became GlobalStar president after four months of overseeing global sales efforts, has helped drive the 40 percent year-over-year growth in new sales through July.

Hartwell said that much of the new business is being driven by corporate clients consolidating multinational programs with GlobalStar members and the network's focus on acquiring corporate clients with $30 million to $50 million in total annual travel volume.