We recently put the finishing touches on the second instalment of a three-part analysis of Flight Centre (for paid-up member only, sorry). That review focused on the impressive strides the company has made in corporate travel over the past five years. Although we know the corporate business well enough to commit 3,000 words to the matter, it’s a pretty secretive industry and we could still learn a good deal from further interactions with customers, employees and competitors to FCm.
Looking for volunteers
So we’ve set up this post hoping to attract comment from customers and industry insiders. We’re looking in particular for information on what FCm (or any other corporate business) does well and where it might be able to improve. Is there anything unique about the FCm offering that helps explain its recent growth? Or are you associated with other corporate travel companies that do some things better?
We’d also love to hear from corporate customers. Why do you deal with the particular corporate travel company that you do? Why do you deal with a corporate travel company at all?
Feel free to speak anonymously. But if you are connected to the industry it would help us to know in roughly what capacity you’re involved. Many thanks for any contribution you can make to our understanding of the business.
We’ll get the ball rolling with a comment John L made last month on another Bristlemouth post, but one that’s very relevant here:
‘A major part of the FLT business is FCm, which I understand is 40% of the FLT revenue. FCm deal in corporate travel management, and are one of only 3-4 global players. Their competitors in this market (global corporate travel management) are Carlson Wagonlit (CWT), American Express (AMEX), Hogg Robinson (HRG), and to a less extent BCD. A number of players will claim to be global travel management companies (TMC’s) but CWT, AMEX, FCm, HRG really have global wrapped up.
‘Corporate Travel Management for multinational organisations is big business (eg BHP Billiton spend about $200M+ PA, the 4 banks each spend about $70M PA, US based multinationals will spend upwards of $1B on business travel annually). Most, but not all, major corporations have professional internal ‘travel managers’ who manage the relationships and make the deals with TMCs, airlines, hotels etc. The TMC then transacts the booking for the individual travellers. Travel is one of the major spend areas in a business that lends itself specifically to global management.
‘The TMC’s share of all this spend is about 4-5% (the rest is for air, hotels etc, etc).
‘I have worked in the corporate travel management area, working with a number of Australian multinationals at establishing their travel programs, for almost 20 years, so I have a good understanding of the market. FCm is competing on a global basis with some big hitters and although they have a way to go with their offering, they are continuing to expand their business.’