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Travelocity Business this week confirmed it signed Lockheed Martin to a five-year, global agreement, representing the largest-ever corporate account win for an online-originating travel management company. The announcement came days after TBiz revealed new multinational capabilities, including its own fulfillment center in the United Kingdom.
The developments underline a general trend over the past two years in which both Expedia Corporate Travel and Travelocity Business (a Sabre Holdings entity) have pushed their services across borders and challenged the bread-and-butter business of multinational TMCs, including American Express, BCD Travel, Carlson Wagonlit Travel and Hogg Robinson Group.
Due to take effect in September, the Lockheed-TBiz agreement includes consulting, overnight support, VIP travel and meetings services. The $37 billion government contractor has 80,000 worldwide frequent travelers.
"In the short term, we will roll out services for Lockheed in the United States and United Kingdom, and then we will support them in other countries either through our own fulfillment centers or via partnerships with other agencies in countries where we don't operate today," according to a Travelocity Business spokesperson.
A Lockheed Martin spokesperson said the company selected Travelocity Business after a "thorough evaluation of several proposals."
BCD and Carlson Wagonlit Travel's would-be acquisition TQ3Navigantboth were in the running for the business. Lockheed currently is TQ3Navigant's largest corporate account.
Lockheed already uses the Sabre global distribution system and GetThere booking tool. Its corporate travel services director, Richard Wooten, is a longtime Sabre client, having helped pioneer corporate use of GetThere predecessor Internet Travel Network while at Texas Instruments in the mid-1990s. Wooten later managed the use of Sabre's Business Travel Solutions product as a travel manager with Belo Corp.
According to the Business Travel NewsCorporate Travel 100, Lockheed in 2005 consolidated its program in 26 nations with TQ3Navigant, using a network that has since been broken up by BCD Travel's acquisition of major parts of TQ3. The publication ranked Lockheed in 2004 as the fourth-largest U.S. business travel account with more than $200 million in annual spending on U.S.-booked air travel.
With such huge volume and tightly managed travel policies and procedures, Lockheed Martin is not the type of account that mega agencies suggested would be wooed by the new competition when their online-originating brethren first emerged in 2002 and 2003.
"That such a large and complex company, which engages in a huge amount of due diligence, would entrust its program to a newly designed solution indicates that iTMCs have come of age," said TRW Consulting president Tom Wilkinson.
The complexity in Lockheed's program is partly related to the Fly America Act, which requires government contractors to use U.S. carriers or, when they do not, follow certain rules and file certain documentation. Travelocity Business last month announced "a program designed to help those who travel on government business more easily comply with the Fly America Act and get reimbursed for their trips."
Last week, TBiz said it intended by next month to launch a wholly owned service center in the United Kingdom using facilities obtained as part of Travelocity's acquisition of Lastminute.com. Sabre Corporate Solutions president Ellen Keszler called the initiative Travelocity Business' first effort "to try to win corporate managed business outside the U.S.."
TBiz had been servicing such clients as Discovery Communications through a partnership with the U.K.'s NIS, but soon will move such customers to its newly acquired facility in Amersham, U.K. By the fall, the company said, it will support clients with offices in other European nations.
For Expedia Corporate Travel, international expansion began with the acquisition in March 2004 of France's Egencia, and continued later that year with the purchase of World Travel Management in the United Kingdom. Officials said ECT now operates three call centers in France, two in the U.K. and a multilingual center in Belgium. Adding to that, ECT this year expanded into Canada.
The configuration of ECT's ownership versus partnership varies, with KDS offering some services in Europe and Hogg Robinson Group providing fulfillment in Canada. TRX has long provided fulfillment in the U.S., but partnership rather than ownership on that score doesn't phase one of ECT's top clients. "We work directly with our Expedia rep, and don't really get involved with fulfillment," said Deb Vasseur, travel and meetings manager with Starbucks Coffee Company. "Probably the consensus is that there is some cost savings to be had if you own the whole operation--sort of the 'middle man' factor--but what we're looking for is that smooth customer experience."
Vasseur said Starbucks plans to launch with Expedia Corporate Travel Canada in less than two weeks. The company in January started using ECT in the U.K. and Ireland, and Vasseur said she has spoken with ECT about the Netherlands, Germany and Switzerland.
ECT officials were coy about which country may be next. ECT vice president of strategy and business development Pamela Keenan Fritz noted Expedia Inc.'s expansion into Australia and, when asked about Expedia Inc.'s partnership with eLong of China, said, "So many of our clients at the moment do travel there, and would love to see our service [in China]."
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