Posted February 1, 2017

CWT CEO Ekert Talks Strategy, Tech Investment, Hotel Solutions And Cuts

Last April, Carlson Wagonlit Travel appointed Travelport vet Kurt Ekert as CEO. After nine months on the job, he has retooled the organization, including a revamped executive team, and embarked on a refreshed strategy.

Ekert caught up with The Beat this week to discuss a wide array of initiatives underway, including CWT's strategic direction and what he counts among its greatest revenue opportunities.

He touched on creating better user experiences for client travelers, putting a sharper focus on hotel sales and investing in data science. He addressed the shuttering of the WorldMate consumer application in favor of greater investment in its corporate CWT To Go app and addressed how CWT will go after the midmarket. He also touched on headcount reductions in some areas and additions in others.

On Selling More Hotel Content

Travel management companies do a "pretty darn good job around air as a category—from a content, from a functionality and from the user experience perspective," said Ekert. Not so much hotels. This, he noted, is evidenced by a generally low rate of hotel bookings in relation to air in corporate channels.

A major CWT initiative addresses this. CWT last year even named Scott Brennan to a new, dedicated role: president of hotel.

To sell more hotels and narrow the attachment gulf, CWT this year will introduce third-party inventory to supplement the corporate rates and the retail rates it sells today. CWT will start mid-year by bringing in hotel content from Booking.com. It is in talks with other third parties. "I wouldn't rule out any source of inventory that would be beneficial to the end user," he said.

Further, CWT will "source unique rates and content at the property level, much like is done outside of corporate travel," said Ekert.

CWT plans to wrap all this content together "with one rules engine and one interface to the customer." It will be delivered "regardless of the channel in which they're booking," be that third-party booking systems, human agents or CWT's mobile platform.

On Revenue Mix

CWT derives "slightly more than 50 percent of our revenue from the client side," with the balance coming from suppliers and intermediaries, Ekert said. As with other TMCs, he sees a squeeze on client revenue amid the ongoing shift to lower-fee online transactions and "downward pressure" on TMC fees by corporate clients.

Facing that reality, Ekert touched on a couple revenue growers.

One is on the supplier side, as demonstrated by CWT's initiatives to sell more hotel content, which lend a "very high revenue-growth opportunity."

Ekert also touched broadly on getting a greater share of wallet from corporate clients, perhaps with new data offerings and capabilities.

The company's core platform, CWT AnalytIQs, is adopted by virtually all clients. While that will continue, Ekert is exploring additional data solutions and services. "There's so much more that we can do as we amalgamate all the disparate elements of data and we go from information to insights and make this more forward looking, more predictive, more decision based," he said.

Data Is King

On that note, Ekert said data is a big focus. CWT hired its own chief data scientist, Eric Tyree, who reports to chief technology officer Andrew Jordan.

Ekert addressed data in two areas: "cutting up data sets differently for the travel manager" to provide deeper insights, as well as using data to facilitate better traveler experiences through the technology CWT offers.

He wants CWT to use "Big Data and data science" to create an "experience that looks and feels more like what a user would experience with a Google or an Amazon in terms of the personalization of the user interface and the data interaction with the technology. We intend to do that through all channels, but CWT To Go will be the pivot point," he said.

Ekert discussed using data insights to anticipate traveler needs and respond accordingly. For example, using historical, preference and social data to anticipate in which hotel a traveler would want to stay and then prompting a one-click booking. He also said such technology could better support travel disruption recovery.

Ekert expects to see some "first-generation versions of our data offering" in the second half of the year.

On WorldMate

As previously reported, CWT is phasing out its WorldMate consumer application. CWT acquired WorldMate in 2012, and its underlying technology continues to power the CWT To Go mobile app.

"We had the consumer facing part of WorldMate, which effectively brought in de minimis, almost no revenue to the company," he said. "We had literally zero resources supporting that offering, and we spent nothing on marketing or customer acquisition. It was effectively a piece of business that was there because it was there."

While WorldMate no longer will be available to consumers, Ekert said CWT is growing what was heretofore the WorldMate organization. "We've enlarged the role of [WorldMate CEO Amir Kirshenbaum] and his leadership team to be responsible for all of our client-facing digital assets—so not just the mobile interface but also our profile and portal tools and a number of other technologies. The idea is to tie these together so they talk at an architecture level."

Ekert said the team now represents around 60 full-time employees and "is on its way to 100 full-time employees by the end of the year."

He added: "The WorldMate of yesterday is the CWT Digital of today with more people, more capital and more resources."

CWT To Grow

That means more investment in CWT To Go, said Ekert. "We're doubling down on that. We'll be investing significantly to improve the capabilities." Some of those capabilities will focus on hotel selling. He also hinted at bringing in more social networking elements.

Already, CWT To Go enables hotel bookings, and those capabilities will be refined. Ekert said CWT is piloting air booking within the app, but the jury is out as to whether CWT will expand it.

On Online Booking

Years ago, CWT operated a proprietary booking system, Horizon, which it sunset in 2010. Then, last year, competitor American Express Global Business Travel took ownership of online booking system KDS.

So does CWT once again want to get into the online booking game? "We have been and we remain very focused on mobile as the next generation of where that activity is going," said Ekert. "We really want to win in the mobile space before we focus on anything else. With respect to the browser or the desktop environment, the challenge there is that you have two very large global players that have roughly two-thirds of the corporate booking market: Concur and GetThere."

Ekert emphasized a partnership approach. "We look at it as a dependent ecosystem. We think partnering proactively with third-party technology companies out there, whether it's expense or booking, is critical to ensure the best experience for the end user."

Yet, as CWT To Go expands its booking capabilities, it may butt up against the desktop- or browser-based booking providers.

"As we go forward, there's a question about the relative overlap between mobile and browser and the extent to which one bleeds into the other," he said. "That's the question we're investigating. For example, as we improve our hotel capabilities, do we extend those into the desktop or the browser? It's easier to do that than to build a full booking tool with everything."

On Chat Interfaces And Bots

"Whether you're in a voice environment, email environment or mobile environment, real-time interactions with travel counselors through more interfaces is fundamental," said Ekert. "Where we can automate things that will improve response speed to the client and enable the travel counselor to spend their time doing things that are value-adding—we're going to invest in those areas quite aggressively."

Ekert also expressed a desire for a more "consumer-grade" interface with the end traveler. He vowed "an intense focus on user experience, from an omni-channel perspective:" online, offline and mobile.

On The Midmarket

Like other megas, CWT's bread and butter is the large, often multinational, managed corporate travel segment. CWT also operates dedicated agency practices for government and military clients as well as the energy sector. Don't expect CWT to carve off other industry-specific verticals. Do expect to see more activity among small and midsize enterprises.

"Our offering traditionally to the SME space has actually looked quite similar to our offering to the managed travel customer," he said. "In fact, our go-to-market approach from a selling and account management perspective has been quite similar, as well, which anyone would tell you is not an efficient way to serve the SME market.

"So, we are actually looking at aggressively changing the offering to the SME market and doing this in all of our key markets around the world and with some different go-to-market approaches than we have done historically."

He called the market "extremely large and extremely fragmented," saying CWT will chase it with "a low-cost, highly automated, very content-rich-type offering for clients that may not need all the bells and whistles that a very large managed travel customer needs."

Ekert expected some pilots in several countries to commence this year, with an eye on being "at scale in a number of markets" as soon as next year.

On Downsizing

CWT this week is telling employees it expects to reduce headcount this year, described by Ekert as "small downsizing actions in our traveler services or operations function." This, he said, is prompted in part by "online channel shift."

CWT is "reducing heads in one area, and we'll be adding headcount in other areas," Ekert said, including technology, hotel and marketing.

CWT said cuts, when offset by additions, would net out to half a percent of its global workforce by the end of the year. CWT now counts 19,000 employees, suggesting a net reduction of around 100 people by year-end.

Posted by: Jay Boehmer | More by Jay Boehmer

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