The spate of consolidation among travel management
companies has showed no sign of slowing
over the past year, even as business travel volumes have begun to pick up
again. American Express Global Business Travel completed its acquisitions of
Egencia and Ovation Travel Group, while TripActions has significantly bulked up
its presence in Europe with acquisitions of Reed & Mackay, German TMC
Comtravo and Swedish TMC Resia. Corporate Travel Management has completed its
acquisition of Helloworld Corporate and has begun integrating its brands.
Frosch, which itself was recently acquired by JPMorgan Chase, acquired Valerie
Wilson Travel as well as a majority stake in Conlin Travel. TravelPerk has
acquired Click Travel, while Direct Travel has acquired both McCord Travel
Management and Short Travel Management’s corporate business.
With many TMCs coming off two years of devastating losses
and still working to recover staffing levels lost over the course of the
Covid-19 pandemic, don’t expect the consolidation trend to subside anytime
soon. Consolidation inevitably will mean less choice for travel buyers but also
a different range of choice among the acquiring companies as they absorb the
staff, knowledge and technology of their acquisitions. Amex GBT, for example,
has used the Egencia acquisition to make a bigger play toward small and
midmarket clients.
Two of the largest TMCs have seen big shakeups in terms of
ownership over the past year as well. Amex GBT soon will complete a merger with
special purchase acquisition company Apollo Strategic Growth Capital, which
will take it public and raise more than $1 billion in gross process. CWT,
meanwhile, completed a recapitalization last year that left it with a $100
million investment that it plans to use to increase content, improve
connectivity and pursue sustainable travel initiatives.
Those investment priorities also show the broadening scope
of services travel buyers expect their TMCs to be able to perform, particularly
in focusing on traveler safety and well-being as well as helping companies meet
sustainability goals in their travel program. That is driving another wave of
acquisition as TMCs seek best-in-breed offerings to provide these services,
such as Flight Centre Travel Group’s acquisition of Shep—a software provider
that can help with the capture of off-channel bookings—or TravelPerk’s
acquisition of sustainability consulting firm Susterra.
As the pandemic dropped travel to nearly zero for most TMCs
at its onset, there was much speculation that there would be a harder push to
adopt subscription payment models rather than payment based on transactions, as
that would leave TMCs better equipped to manage through the next crisis. So
far, there has not been any widespread change, but there still could be
movement toward more hybrid-type models with both types of fees.
Regardless of a company’s individual needs, the
pandemic has highlighted the role of the travel management company as an
essential partner for travel buyers, which makes strategy and diligence all the
more important when establishing that partnership.