The spectre of the American Express GBT/CWT behemoth if the US Department of Justice drops its opposition doesn’t faze the TMC industry. Consolidation has long been a characteristic of the sector and it will continue, particularly in the upper half of the league table. Many industry observers believe that BCD will be under new management within the next 12 months, while there has long been rumours of Direct Travel acquiring ATPI. 

“Everyone has a price,” says Dave Bishop, Gray Dawes Managing Director Europe.

“If the DOJ says ‘yes’ it will drive other acquisitions at or near that level in order to compete with that new enlarged business.” 

Clive Wratten, CEO of Business Travel Association (BTA), reckons consolidation creates opportunity as well as a threat for the sector as smaller TMCs need to be faster on their feet.

“When change happens it facilitates change further down the chain,” he says.

Already, brand new TMCs have emerged. James Diaz, the former CEO of Travel Planet, stepped away from the French-owned TMC and launched Absolute Travel Management in January this year, taking several colleagues with him.

Absolute closed an oversubscribed seed investment round at the end of 2024 raising over £500,000, attracting angel investors and OpsTalent, a specialist in customer experience solutions based in Poland looking to “capitalise on growth opportunities within the SME market”. 

At the end of last year, CT Travel Group (CTTG) and Good Travel Management merged after John Good Group took a majority stake in CTTG, forming a new company with a combined turnover of £85 million. 

Other TMCs have changed hands while some have launched specialist divisions.

TravelPerk plugged its expenses gap with the purchase of Yokoy and Clarity has launched an entertainment arm to create what Clarity Business Travel CEO Pat McDonagh calls “centres of excellence to compete with the niche players”. 

Events and creative agencies group The Human Network, meanwhile, snapped up Belfast-based Beyond Business Travel and has big plans to bring its focus on “creating memorable experiences” to the travel management space.

Healthy competition

It seems the industry is on a roll again, building up overseas presence and plugging gaps in service offering in order to handle multinational accounts. One thing the industry has always been good at is being nimble on its feet and now this potential new wall of competition, in the shape of Amex GBT/CWT, presents new opportunities.

The much talked-about deal promises to bring global content, the best software and the best services, all integrated.

Eric J. Bock, Amex GBT’s Chief Legal Officer and Global Head of M&A, stated that the CWT transaction would “provide even more value and choice to customers and suppliers and more opportunities for CWT employees.” 

Paul Abbott, CEO of Amex GBT, declared the deal is “an opportunity to welcome 4,000 customers on to a proven model, to strengthen our presence in key industry verticals such as military, government, energy, marine and mining”.

But there are questions over what it will do to competition in the industry. 

Tackling its mission of eradicating unfair behaviour, the UK’s Competition and Mergers Authority (CMA), while approving the Amex GBT acquisition, nonetheless probed how many TMCs can handle multinational accounts.

Ironically, in its response to the CMA’s initial concerns, Amex GBT was forced to ‘big up’ the capabilities of its rivals, arguing that BCD, FCM, CTM, and Navan – along with Spotnana/Direct Travel, Blockskye/Kayak for Business/Gant Travel and others – have the “credibility and track record to fight for and win contracts to serve customers of all sizes with the most complex needs, as well as those with simpler requirements”.

The submission claimed the CMA was wrong to focus on a separate market for global multinational customers and SMEs with global and complex needs, and that both could be effectively serviced by a wide array of competing TMCs.

It criticised the CMA for ignoring evidence from various sources to show that the business travel market is highly fragmented and intensely competitive for customers of all sizes and needs.

The CMA, it claimed, had misunderstood the way in which organisations procure business travel services and the way they create competitive tension between TMCs

It had also failed to take into account the “highly dynamic nature of the market, with customers increasingly demanding digital solutions, TMCs providing global coverage through tech solutions, travel partner networks, and business process outsourcing solutions”.

Market shifts

Traditionally, multinational buyers gravitated towards similar-size TMCs with a similar global footprint and culture, promising one single contact, consistent service, a single system and consolidated data. But that started to change as long ago as 2011 when a tech-driven Redfern scooped the domestic travel booking for 10 government departments. CTM acquired Redfern five years later.

There is an easy answer to the CMA’s question today. A distinct move towards de-globalisation means multinational accounts need not only fall into the laps of the major players or the tech-first disruptors such as Navan, TravelPerk and Spotnana. That same capability is now shared by other TMCs outside of the ‘Top 10’, who are investing heavily in tech, either through acquisition, which shortens the R&D route, or capex.

Detractors of contracting with one TMC globally point to the hubbing services used, which follow the 80/20 rule, of satisfying only the key markets and ignoring regional expertise.

ITM’s CEO Scott Davies adds: “Even large global programmes can be challenged to appoint a single TMC around the globe, including the largest players. This is because some of the larger TMCs still have areas of the world that they don’t have a wholly-owned presence within.” 

Forward-thinking buyers have long relied on local TMC partners to satisfy those differences in local cultures in local markets. They are often significant players in each of their main markets, while different online booking tools (OBTs) are used for the same reasons.

In any case “globalisation was only ever Europe, Asia and the US”, says BTA CEO Clive Wratten, while questioning whether globalisation is coming to an end.

“Each of our TMC businesses has a local flavour and uses a conglomeration of smaller partners,” he says.

And that appears to be a new template for the future. 

Joined up thinking

Integrating the technology to knit together multiple TMCs – and deciding where and how it needs to join together – is potentially problematic but it is not an issue, according to Pat McDonagh at Clarity. 

“The melding of technology is not a challenge,” he says.

What is needed, McDonagh points out, is to educate buyers on the pain points.  

Technology has undoubtedly levelled the playing field and widened the choice for buyers willing to embrace a different procurement route and consider TMCs other than the major players.

It’s interesting to note that RFP pitch lists for multinationals clients are no longer made up exclusively of multinational TMCs.

“Forward-thinking corporates are re-evaluating what global really means, often favouring tech-enabled, customer-centric TMCs that combine local strength with global scale, without the red tape,” says Jamie Pherous, Managing Director CTM.

Up until three years ago Gray Dawes, for example, was a UK-only TMC but has made 16 acquisitions over the last decade to build up its overseas presence across the UK, the US, the Netherlands and Australia. Asia Pacific is now on its radar. 

“As a TMC, do you need to be everywhere? We don’t need to have all the points on the map,” says Bishop, its MD Europe.

“We can be asset light yet service multiple locations from a single hub. Technology has enabled us to do that.

“Clients can call us 24 hours a day and be answered by someone who knows who they are and they still have one global contract and one global account manager. If you regionalise you can be far more agile.”

Of the clients Gray Dawes has won over the last 12 months, nearly 50% are multinationals who they are servicing in more than one market. 

Going global

Clarity Business Travel also sees itself as a viable alternative to the mega players.

Its average size of client has risen five-fold in the last five years and it manages clients with spends up to £50 million.

Through OneGlobal – the international joint venture set up by Clarity and its US partner World Travel in October 2022 – it has clients who spend over £75 million.

OneGlobal, which now has fully-managed solutions throughout Europe, South America, The Middle East, Africa, Asia and Australasia, places Clarity in the top 10 of TMCs worldwide, with a total transaction value of approximately US$4 billion.  

“Buyers need to look beyond the end of their nose to see the alternatives,” says Clarity’s McDonagh. 

“More and more corporate travel buyers are challenging themselves to consider something different and look beyond the obvious.” 

Gray Dawes’ Bishop reckons the presence of consultants helping clients through the RFP process is now challenging what they are buying.

“We’re starting to see some bold buyers splitting up the world,” he says. 

Size matters

Yet again, TMCs are pivoting to satisfy customer needs, although Davies at ITM urges caution.

“It would take time for any to grow to compete with the largest three or four globally,” he warns.

“As with any market dynamic, the larger the large ones get, the more potential customers will need to consider the benefits of scale against the agility of a smaller operator.”

Whatever the outcome of Amex GBT/CWT deal, watch this space as smaller TMCs start to make more of a splash.