Globalisation: fewer suppliers, greater efficiency

Globalisation, consolidation, optimisation... It's been a long time, at least ten years, since the business world began to manage business travel on a global scale. "Of the 1,000 biggest companies in the world, we see less and less with fragmented programmes. Of course, you still have multinationals where each country does what it wants on its own, but they cut themselves off from all the advantages of consolidation. It's more complicated to manage things when they're fragmented"says Pascal Jungfer, CEO of Areka Consulting.

However, according to a study carried out for CWT and presented at Acte's Paris Global Summit in 2018, there is still room for improvement. For 61 % of the professionals questioned, "consolidate with a single agency certain operating divisions, certain countries or certain regions" is one of the objectives. This was well ahead of consolidating travel policy (22 %), hotel or airline programmes (11 %) and choosing a booking tool (6 %).

Naturally, the consolidation of relations between companies and their travel suppliers - agencies, reservation and expense claim management tools, hotel groups, airlines, but also payment and risk management solutions - is primarily a response to a purchasing logiceconomies of scale. With a limited number of suppliers, a virtuous circle begins: fewer intermediaries means optimised reporting, since the data is not scattered; hence better negotiating levers with suppliers; hence better prices; hence better adoption of the travel policy; hence easier traceability of employees in the event of problems, an essential element today...

A lot of little things add up to a lot of big things, and in the end, travellers, travel managers and financial directors alike are all better off. satisfied with the travel programme. "The consolidation of all the data has been very important and we now have access to up-to-date, relevant and accurate data at global, regional and national level.says Marie Forsstrom, Head of Travel at Absolut, who was quoted in the CWT study as explaining the value of this approach for her company. For me, it's very important that the organisation is exactly the same in every country."In this context, most companies have one or even two agencies worldwide, "even if some have regional strategies, with agency A in North America, agency B in South America, agency C in Europe-Africa-Middle East, Asia being another problem"says Pascal Jungfer.

The geographical coverage of travel agencies is therefore essential, as it is their job to orchestrate this global management. It is difficult to meet the needs of oil companies without a presence in Africa and the Middle East... To this end, the leading travel agencies - travel management companies, or TMCs - have expanded their networks... through mergers and acquisitionspartnerships and joint ventures. "The globalisation of TMCs has accelerated massively. This is now a real criterion for choice."Egencia is a subsidiary of Expedia with a presence in over 60 countries.

Recent moves include, BCD Travel has integrated the South African agency Rennies Travel, the Brazilian agency Avipam and the Polish agency Air Travel Club into its network. For its part, Australian TMC FCm Travel Solutions has a strategy of increasing the number of local partnerships such as the one formed with 3mundi in France in 2015, giving it a network covering 95 countries. In addition, of course, the 2018 mega-acquisition of UK agency HRG by American Express Global Business Travel (GBT), "a world leader who benefits from the power of a global network while being local experts"According to Elyes Mrad, Senior Vice President and Managing Director International of American Express GBT. Another major player, CWT is present in 150 countries. "This makes it possible to have uniform coverage in relation to business needssays Bérénice Delrue, CWT's Senior Director of Multinational Programmes. This is the limit of small structures, which cannot satisfy their customers in every country."

Globalisation: all in the same boat

However, the major groups are keen to offer their employees the same quality of service throughout the world. This also means harmonisation of travel policy with common rules to avoid, for example, one executive being able to travel in business class while his colleague is stuck at the back of the economy cabin. In addition, using a single service provider also means that everyone can enjoy a uniform technological experience, an aspect that is far from insignificant at a time when millennials are pushing to take advantage of the latest innovations. Elyes Mrad explains how he receives "more and more requests linked to our technological offerings."In addition to the same experience, having a single branch as a point of contact also simplifies the relay of information. "It makes it easier to talk to people," says Bérénice Delrue. Messages get through much more fluidly if everything is distributed between 15 suppliers."And the CWT manager uses the example of the Program Messenger messaging tool, which enables targeted emails or text messages to be sent to travellers on all aspects of travel policy.

With its integrated model and offering based on Expedia's expertise, Egencia is something of an exception in the global travel agency landscape. "Because we are the only leading TMC to own our technology, we are able to offer a unique user experience.continues Ronan Bergez. This also means fast turnaround. So if the travel manager decides to make the slightest change to his travel policy, it is immediately taken into account in all the distribution channels. It's the same thing when we add technological innovations: all travellers benefit directly. The need for immediacy is a very strong phenomenon today, driven by leisure travel."

Harmonisation impossible

However, unlike Egencia, the other agencies have to manage relationships with a wide variety of suppliers, starting with booking tools. Alongside regional leaders from the GDSs such as Cytric in Europe, launched by Amadeus, and Get There by Sabre In the US, there are also local champions such as Traveldoo and KDS in France - but whose reach is set to expand globally with its acquisition by American Express -Serko in Australia and Ctrip in China. "With the exception of Concur, which has a global expansion strategy, we can't talk about a harmonisation of tools.underlines Pascal Jungfer. This can also be explained by legal and technical constraints which means that in China, Russia, Japan and Brazil, the market is unique. It's up to the agencies to take all these constraints into account to offer users consistent quality."

A mission that Elyes Mrad, at Amex, readily accepts: "Our role as TMCs is to help our customers achieve their objectives. Many factors, such as a company's culture, geographical reach and resources, as well as cultural, local and regulatory factors, can affect the globalisation of a travel policy."For CWT's Bérénice Delrue, "you need to be able to adapt to local and geopolitical conditions. It is possible to have a harmonised solution for 90 % to 95 % of expenditure and a different tool in Brazil or China, for example. There are always exceptions, but clearly having a single booking tool is a strategy that pays off."

This desire for uniformity extends to many other areas, but here too it is confronted by market realities. When it comes to managing expense claims, the landscape is fragmented, not least because it is often difficult to extend your footprint abroad. Setting the tax rules for each country requires both time and resources. "This is a real barrier to entry for small players. In practice, there are very few suppliers with a global offering."says Pascal Jungfer. Alongside Concur, which can rely on the global reach of its German parent company SAP, there are ambitious newcomers such as Expenditure, acquired by Sodexo, but above all the emergence of a genuine competitor to Concur with the merger, announced in March, of the Americans Chrome River and Certify.

As a result, the two companies will have a presence in more than 100 countries. In 2018, Certify had already begun its move into Europe with the acquisition of Spain's Captio, while Chrome River had at the same time continued to establish itself on that continent with the opening of a subsidiary in Germany. "Chrome River already has a long list of customers in Western and Central Europe. More and more companies are the need for a global, mobile solution for efficient expense and invoice management".said Alan Rich, CEO of Chrome River. The merger of his group with Certify should further expand the customer portfolio. Robert Neveu, co-founder of Certify, added that "By bringing together Chrome River's expertise in large enterprises and Certify's knowledge of SMEs and mid-sized businesses, companies of all sizes will find the right technology for their specific needs, rather than being forced to use a single product."

In the payment solutions market, at a time when companies are tending to want to rationalise their card programmes On a continental and even global scale, a number of players are challenging the world leader, American Express, including the major Anglo-Saxon banks with operations in some sixty countries, such as Citi and Bank of America Merril Lynch, the European leader BNP Paribas, and a player specialising in corporate solutions, such as Germany's AirPlus. As well as opening more offices in emerging countries, AirPlus is launching a corporate card this year, which will be rolled out in 19 European countries.

ALSO READ: "Payment solutions: the new order

"By covering all company expenditure, it gives them an even broader view of their travel budget. Data from corporate cards is added to that from corporate and virtual cards, all of which can be seamlessly integrated into expense management and reporting systems."explains Patrick Diemer, CEO of AirPlus. "We can see that technology is becoming more and more presentsays Bérénice Delrue. Our role is to quickly integrate all the new products offered by suppliers. The business travel market is constantly changing."