Business Travel News - June 8, 2009 - (Page 4)

AGENCIES, CORPORATE-OWNED Agencies Face Transaction Drops By Seth Harris As the recession took hold in 2008, travel management companies found themselves on rocky footing, battling the effects of stark transaction and sales volume drops that accelerated throughout the year. Last year also saw agencies responding to vigorous account activity as corporations looked to optimize financial arrangements, speed TMC implementation times and receive more timely and accurate data and reporting. To offset lower business levels and other reduced revenue streams, some TMCs were forced to reduce their workforce or cut pay and benefits, but some also were keen to invest in such areas as technology and sales to position themselves for a recovery. U.S.-based TMCs also dealt with a slowed merger and acquisition pace as valuating targets became difficult, credit access became hard to come by and would-be sellers were not tempted by low asking prices. In the earlier part of 2008, some agency consolidation did occur. Travel and Transport bought Abacus Travel, and Altour International, CI Travel, Valerie Wilson Travel, Tzell Travel Group and The Travel Team each acquired other firms. Tzell Travel Group made the largest M&A moves by far by merging with the Travel Acquisitions Group in the summer and creating new corporate travel management units under Travel Leaders Corporate. The activity included TAG’s March acquisition of Coral Gables, Fla.-based TraveLeaders, Tzell’s acquisition of Colorado’s Polk Majestic Travel and 11 other agencies in Alabama, Florida, Georgia, Indiana, Missouri, Maryland, Oregon and Pennsylvania and the opening of a London office, which added $150 million in air volume to the company’s performance. The Tzell portion of the group now is focused on small corporate accounts, while Travel Leaders Corporate is managing the larger clients. According to Travel Leaders Corporate president David Holyoke, the division garnered $72 million in new business in March and April and is projected to surpass $100 million in 2009 new business this month. Though M&A pushed revenues higher, as did the 9 percent to 11 percent increase in transactions in the first half of 2008, like most companies, the proverbial bottom fell out at the end of the third quarter, when clients on average reduced travel spending by 20 percent, said Holyoke. “Ultimately, that’s what led the three groups to become one,” he said. “If we had to continue to make some of the cuts that were necessary to keep these businesses as viable as we wanted them to be, they probably in the end would have killed that business anyway. By coming together, we were able to generate a lot of synergies and cost-cutting initiatives to help us Continued on page 6 RANKINGS BY 2008 ARC TRANSACTIONS 1) Travel Leaders Group 1,045,278 2) Omega World Travel 845,208 3) Travel and Transport 771,760 4) World Travel Inc. 535,018 5) FCm Travel Solutions 477,425 6) Ovation Travel Group 362,859 7) Adelman Travel Group 346,223 8) The Travel Authority 302,153 9) Adtrav Travel Management 291,018 10) Frosch 286,565 11) Directravel 274,043 12) Altour International 245,651 13) Ultramar Travel Management 242,544 14) Christopherson Andavo Travel 225,925 15) CI Travel 192,512 16) USTravel 190,636 17) Azumano Travel 185,226 18) Travel Store 165,293 19) Fox World Travel 143,675 20) World Travel Service 138,629 21) AAA Allied Group 134,441 22) Atlas Travel International 122,980 23) Short’s Travel Management 115,772 24) Best Travel & Tours 107,510 25) Valerie Wilson Travel 106,483 26) The Travel Team 102,105 27) Balboa Travel 98,122 28) National Travel Service 88,077 29) Casto Travel 80,607 30) Gant Travel Management 79,273 31) Kintetsu International 77,994 32) Covington International Travel 60,908 33) Linden Travel Bureau 58,264 34) A&I Travel Service 49,387 35) Child Travel Services 46,215 36) Hess Corporate Travel 43,124 37) Conference and Travel Services 41,905 38) Maupin Travel 37,355 39) George Garner Travel 30,530 40) Euro Lloyd Travel Group 26,622 41) Century Travel Service 23,426 42) S.R. Travel Service 22,745 43) Corniche Travel 19,969 BETWEEN THE LINES American Express in 2007 reported $21 billion in global corporate travel sales, a 2.4 percent increase compared with 2007, according to U.S. Securities and Exchange Commission filings. Amex again declined to release ARC data, citing SEC regulations requiring equal disclosure of financial data to shareholders. BTN estimates that American Express Business Travel processed 14.5 million ARC transactions worth $8 billion in sales last year. Carlson Wagonlit Travel for the first time declined to release ARC data to BTN. BCD Travel and HRG also did not participate. Travel Leaders Group is primarily comprised of New York-based Tzell Travel Group, with 845,942 ARC transactions in 2008 worth $667.7 million. It also includes data from the former Coral Gables, Fla.-based TraveLeaders, acquired by Travel Acquisitions Group—now Travel Leaders—in May 2008. In September, Tzell and TAG announced a merger that eventually gave birth to Travel Leaders Corporate, which houses all wholly owned corporate travel operations, including Tzell. FCm Travel Solutions’ listing combines ARC data from Chestnut Hill, Mass.-based Garber/FCm Travel Solutions with FCm’s small and medium-enterprise division based in El Segundo, Calif., and its Bannockburn, Ill.-based travel management service division. In 2008, Garber processed 304,141 ARC transactions worth $202.6 million. FCm’s California and Illinois locations processed 55,619 and 117,665 ARC transactions, respectively. 4 June 8, 2009 • www.BTNonline.com • BUSINESS TRAVEL NEWS BUSINESS TRAVEL SURVEY 2009 http://www.BTNonline.com

Table of Contents for the Digital Edition of Business Travel News - June 8, 2009

Business Travel News - June 8, 2009
Contents
Agencies, Corporate-Owned
Airlines
Car Rental Companies
Chauffeured Transportation Companies
Corporate Payment Systems
Hotel Companies

Business Travel News - June 8, 2009