Egencia announced expansion into eight new countries and Hong Kong as it launched the Egencia Global Alliance partnership program. Through partnerships with eight travel management companies, Egencia expanded its footprint to Latin America for the first time with service in Argentina and Uruguay, and also added to its service portfolio Hong Kong, Hungary, Romania, Russia, Singapore, Taiwan and the United Arab Emirates. Partnerships were announced with Russia's ATH, Hungary's Ibusz, Argentina's Action Travel which also services Uruguay, Accent Travel in Romania, Orient Travel in the United Arab Emirates, Global Travel Pte. in Singapore, Lotus Travel in Hong Kong and Taiwan's Lion Travel. The Beat's Mary Ann McNulty talked to Egencia North America senior vice president Pamela Keenan Fritz about the new growth strategy. An excerpt of the interview follows.
McNulty: Why did you form the Egencia Global Alliance and where do you see it going?
Keenan Fritz: We've had a very strong tradition of global expansion in our short history as an organization. We really wanted to continue that growth, but speed it up. We had demand from clients who wanted to have the Egencia service and standards globally and were asking for service in particular markets. At a strategic level, we looked at a range of different options. The concept of a global alliance really looked like the best, not only to serve our clients, but also expand our business in a swift way.
McNulty: How long have you been working on this?
Keenan Fritz: We've been planning strategically since last year. Our mode as a business is really to think about things deeply and then invest very heavily in initiatives. This has been no exception to that. The first thing we did was to build our in-house team of talent negotiating, working and identifying potential partners globally. We've really invested in very high quality director talent and have leaders of the EGA program for North America, for Asia Pacific and Europe. They are backed by due diligence, customer service and technology specialists. We've also invested in linguistic capabilities. Every one of those leaders for us speaks at least three languages. We want to make sure we're setting our business up to be a global business. We also started building the founding members of the EGA that we announced. This is only the start of the journey for us. We're currently in negotiations with excellent travel management companies that have deep knowledge in additional markets and we expect to be making further announcements about the expansion of the EGA in coming months.
McNulty: By the end of 2010 how many partners would you expect to have?
Keenan Fritz: Today Egencia covers 24 countries globally. I would expect us to look to adding 50 percent to 100 percent over the course of the next 18 to 24 months. The reason we can do that is partly due to this team of very talented executives we brought on to drive this program. I don't think you can look at growing as we had in the past and will continue to grow in the future without investing a lot of resource, time and executive commitment to make sure these are fully fledged partnerships. We didn't want to just sign a deal and be a nameplate on a door. We really wanted integrated partnerships with corporate travel professionals that culturally felt very similar to us, and we could see growing with us over the long term.
McNulty: Why did you focus on the markets you did?
Keenan Fritz: Primarily that was driven by demand from our clients, where our clients wanted us to go most urgently. Also it was linked to our experience in identifying excellent travel management companies.
McNulty: Does the addition of Argentina and Uruguay represent your entry into the Latin American market?
Keenan Fritz: It is the first step. Latin America is an important market to us and a new market [for Egencia]. We have invested in a director for Latin America. There are some very strong markets in Latin America: Mexico, Brazil, Argentina, and Chile. Our clients have strong business interests there and would like us to be there serving them. This is the start of a very exciting new geographical expansion for us.
McNulty: In terms of delivering service to your clients, what technology will each agency be using and what other services will the agencies provide?
Keenan Fritz: The focus of the EGA is really around service and content. Primarily what we want to ensure is that every traveler in our EGA markets is served up with a comprehensive content offering which offers every air carrier, every choice in hotel and every choice in ground transport. That really has been our number one focus. Secondly, part of being a member of the EGA is coming on board with the Egencia global service standards and serving clients to those standards. This is something that resonates very strongly with our global clients because they want to be assured that when a traveler phones in Buenos Aires, St. Petersburg, Singapore or Chicago they are going to get the same service experience and same standards met.
McNulty: Are you dictating those standards to your partner agencies?
Keenan Fritz: What we have developed over the last few years is the Egencia global standards. As we've rolled out our offering, all points of sale adhered to our global standards developed with clients over time. As we expanded our EGA, we introduced partners to those standards. Part of the selection criteria has been to find agencies that could deliver a very high level of service.
McNulty: Do you expect travelers to book travel online in all these markets or is that not possible in some?
Keenan Fritz: It's very much about the local market. It's focused on making sure travelers have the right content, and are getting the right service. That will be through an offline model in most markets. It's partly about the market, partly about the clients and the way they're used to being served in those markets, and it's also about making sure that we meet those first two criteria first as those are the ones of predominant interest of our clients.
McNulty: Will your EGA partners be selling the Egencia services or just providing fulfillment?
Keenan Fritz: This is a true partnership. We really looked at a number of different strategic models and came to the conclusion that what we wanted was a true partnership. If we take the example of Argentina, our partners in Action Travel will be providing full account management and support at every step of the way in the same way that they would be serving their clients. They will also be introducing their clients with global needs to Egencia as we will be introducing clients to them.
McNulty: In each of these countries do you anticipate hiring your own people to sell?
Keenan Fritz: No, in our partner countries we announced today, we have no intention of developing our own base there. What we really want to do is leverage our partners. This is why choosing the right partners with a really solid reputation and deep talent set on their side has been so important.
McNulty: Are the partnerships exclusive?
Keenan Fritz: The aim is really to develop a binary relationship. Some of the agencies that are part of the founding members of the EGA are involved in other networks. The way we see it evolving on our side is that we have a commitment to develop a relationship with the chosen agency in that market.
McNulty: Is global where you expect growth versus the North American market?
Keenan Fritz: From a North American perspective, even this year, which we all know hasn't been a favorable year for corporate travel, we've grown our business 30 percent year on year. Even though some think of North America as a mature, stable market, we're still taking significant market share and will continue to do that going into 2010. It's still an exciting and growth-driven market from our perspective.
McNulty: How would you quantify the demand for international TMC services? Is it from existing customers who want you to help them grow or new customers you've been unable to bid on?
Keenan Fritz: It's both. It's certainly coming from our extensive existing client base, but also coming from new clients and prospects attracted to the compelling value proposition of Egencia, but would just like us to have that one extra country.
McNulty: In addition to standard reporting, what is the "additional information" from partners mentioned in your press release about the EGA?
Keenan Fritz: That is part of our ongoing value proposition to provide CFOs, procurement specialists and travel managers with comprehensive business information and data about their program on a global basis. One of the things we've been talking with potential partners is being able to provide us with very granular, detailed data that we can then feed into our systems to provide those global consolidated reports. That is something we've started on the track of doing and have some clients enjoying now, and we're going to continue to invest in it going forward because it's where clients can benefit from the economies and efficiencies of their spend. It's also integrating our meetings and incentives offering into that outlook, so it's not only consolidating global corporate transient spend, but adding into that meetings and incentives spend. For some of our clients, the meetings spend is 100 percent to 150 percent of the travel spend.
McNulty: Do you expect your partner agencies to deliver meeting and incentive services?
Keenan Fritz: When we looked at selecting and narrowing agencies for detailed diligence discussions, we looked at two things. One is that the agency had a deep focus on corporate travel and strong reputation in the corporate travel space. The other is that they have a broad focus on corporate travel, which includes meetings and incentive services as well as local services such as visas and meet and greet.
McNulty: Do you anticipate using one global distribution system or tech platform to service your clients?
Keenan Fritz: We're in a slightly different situation from a traditional mega TMC in that we have our own back office systems, and we've invested very heavily and will continue to invest in our own technology. So we don't have to rely on syncing everybody up through the same GDS. GDSs and their content range dramatically by geography, so what is the right GDS for one agency in Asia-Pacific is not the right GDS for one in Latin America. One of the benefits of having our own technology solution is that we can work in a multi-GDS environment.
McNulty: Will you continue to buy and build globally and if so, how will you determine where to partner?
Keenan Fritz: Absolutely we will continue to buy and build. When it makes sense we will continue to look at the organic and inorganic strategies for growth. But in parallel we're looking at where are the centers of excellence--the very well regarded travel management companies--where it makes more sense to partner.