Romeo Cuter

INTERVIEW: CTM North America's Romeo Cuter

Australia's Corporate Travel Management this week celebrates its 20th birthday. From one office in Brisbane to operations in 15 countries__including an expanding presence in Asia/Pacific and North America__the travel management company aspires to stand toe to toe with the largest players in the space. In the United States, CTM in 2012 acquired Polk Majestic Travel Group (also known as R&A Travel) and last year purchased TravelCorp. This spring, CTM appointed former Carlson Wagonlit Travel and FCm Travel Solutions executive Romeo Cuter to the newly created North America CEO post, and charged him with leading the company's "aggressive" North American growth strategy. CTM also named former Polk Majestic owner Robert Polk to serve as president of the Rocky Mountain region and former TravelCorp owner Scott Evans to serve as president of the southern region. Cuter told The Beat that Polk and Evans remain "heavily involved in our business and in our relationships with clients."

Before his 10 years in the travel industry, Cuter worked at Exxon Mobil, Ford Motor Company and The Royal Bank. "It has given me outside perspective on the travel industry," he said. "My trademark has been aggressive growth. It's been a hallmark of my career and I think that's why I find myself in this position right now." Cuter recently talked with The Beat's David Jonas about integrating U.S. acquisitions, a goal "to be a major force in the U.S." with $500 million per year in annual sales volume and trends around the industry. Excerpts follow.

Jonas: What are your priorities now that there is a foothold here in North America?

Cuter: We have had two acquisitions already, the Polk business and the TravelCorp business in the south, predominantly Louisiana and parts of Texas. My top priority is effective integration of those two U.S. operations. There is a lot that has been done, but still a lot that needs to be done. In an acquisition scenario, you'd like the math to be one plus one equals three, and certainly we are seeing some business synergies that will help us get to three. We are looking to remove cost from the business, streamline technology where it makes sense and aggregate our now-considerable buying power when we start talking to suppliers. Among the things that always will be a priority are our clients and employee retention. That will be critical for us regardless of our aspirations for organic growth or acquisitions.

Jonas: What are the most challenging aspects of integration__aligning technology, getting the message out to the market, coordinating processes and sales functions?

Cuter: It's a bit of all of that, but it all starts with communication internally. We want to make our people more efficient and make sure our offering to the market is compelling and has ROI for the customer. It's also looking at the organizational structure of the company and processes we have in place. Some of those are large items and some are really small; it could be things like integrating our dual methodology for expenses.

Jonas: Coming from headquarters in Australia, CTM has been working to develop its own technology. Are there specific components already in place in North America, and what does the roadmap look like?

Cuter: Certainly there is a lot of technology that already is operational in Australia that we want to bring over here as quickly as we possibly can. But we are about customized solutions, and we try to build products that help not only a particular customer, but all of them. The pipeline of technology for us is pretty exciting. In Australia we have significant resources both from a headcount point of view and also funds for technology that we are working on. I won't say specifically what it is, but some of the technology could be game-changers for the industry, possible disruptors as well. We are looking at online, at mobile, etc. We have a great relationship here in the U.S. with [Glendale, Col.-based] Agency Technology, which helped us develop mid-office solutions, and we think this will be a real differentiator for us in the space.

Jonas: Does CTM in North America have a particular niche in terms of clientele?

Cuter: We are a mid-size company and we are looking for small and medium enterprises and midmarket clients. We are not in the large market space; we won't be there for some time to come. Our growth plan has us wanting to get to half a billion U.S. dollars per year [in North America sales volume]. I am fairly confident we'll get there organically and through acquisitions. We are still very interested in acquisitions.

As our clients are growing domestically and globally, there is upward pressure on us to bolster our offering on an international level, and you have seen our acquisition of Westminster Travel in Asia/Pacific that makes us a significant player over there. And the Australian business is almost a household name down there.

Jonas: What other CTM developments in North America can you tell us about?

Cuter: We'll do a lot better job building our brand and our business. We want to be a major force in the U.S. We have three basic business lines: corporate, which is our CTM brand; leisure is very important as well, and we have a large base of independent consultants, and that is under the Allure Travel brand; and we have the end-to-end solution in events, and that's our Event Travel Management brand. We're going to do what we can to get the story out.

There are acquisitions going on in the market now; a lot of medium-size regionals are doing the same thing. But I think our acquisition methodology is a little different. We look at culture, so when we do the integration it is a not a quantum leap because we have like-minded businesses and people. We certainly look at the financials, as everyone else does, but our end game is to grow a strong TMC regionally and globally, that is wholly owned, that has the same business DNA and has the same business ethos.

Jonas: How do you gauge the health of the corporate travel industry right now?

Cuter: We are very optimistic about the industry, particularly in the space we are working in, the SME and midmarket space. If you look at consolidation in the airline sector, you can argue that the corporates in our sector are being marginalized. For us, that enhances our value as a TMC and other TMCs operating in the space. We see it as an exciting time despite the small percentage growth [in overall corporate travel volumes].

Jonas: Among SMEs, is it more the case that those already using a travel agency are traveling more, or those that haven't previously used an agency are starting to do so?

Cuter: It's both. There are new entrants to the space, and there are other customers migrating down. Certainly the megas are very competent in their space, but even where the spend would suggest a company would be in the mega space, some are moving down because they are looking for an alternative, particularly on the service-offering side.

Jonas: Are you seeing a trend away from globalization, as companies instead stitch together a global program using various TMCs selected for their strength within particular regions?

Cuter: You can't make a blanket statement. We are seeing that, but we are also seeing others go the other way toward global. But there is that sort of regional decision-making that is coming into play. It has a lot to do with corporate culture, regionality, ability or not to mandate, etc. We have a global footprint through the GlobalStar network, but not enough of a wholly owned one at this moment in time to say we are a global player, so we love that best-in-market approach, because we are competitive when it comes to that dialogue, and we are seeing more of it.