Singapore Small- and medium-sized companies (SMEs) and hotels are sectors Carlson Wagonlit Travel (CWT) intends to pursue as part of its three-year strategy to expand its business worldwide.
Called CWT 007, other key plans in the strategy include leading the self-booking/automation trend and expanding its consulting, programme management and outsourcing services.
CWT president and CEO worldwide, Mr Hubert Joly, said:
"The suppliers market is increasingly volatile and complex. Network carriers are financially distressed, agent commissions are being eliminated worldwide and low-cost carriers are increasing their market share and beginning to be relevant to corporations."
"GDSs are being deregulated, their future relevance is being challenged by new players and technologies that are emerging. Therefore the next opportunity for TMCs such as ourselves to add value to our clients is in hotels, as there is much hotel content that is still not accessible through the GDSs. Corporations are also recognising that hotel spend is the next savings frontier, not only in terms of rooms but also rental of space for meetings and seminars. This segment is fragmented and traditionally undermanaged by TMCs and online travel agencies have made a lot from this sector."
He claims third party audit firms have reported CWT's hotel rates 20 per cent cheaper than its competitors including octopustravel.com, Travelocity, WorldRes, Expedia and individual hotel websites.
One of the visions of the company is to lead the self-booking/automation trend by encouraging more of its customers to make make use of such tools as it means lower transaction fees for clients and fewer resources deployed for CWT. In 2004, it claimed to have achieved 1.8 million online client transactions in the US.
Another key strategy to grow its business is to target the SME market as the company's grasp of this sector is not more than 20 per cent in key markets such as Spain, France, Germany, the UK and the US, although these clients contribute a significant share to the revenue from these markets, demonstrating the potential of the segment.
According to Mr Joly, the global travel market is worth close to a trillion dollars and business travel contributes about 40 per cent to it.
Globally CWT achieved new global sales of US$1.3 billion in 2004 contributing to the 19 per cent (at constant exchange rate) growth year-on-year. Its Asia-Pacific sales grew by 34 per cent, crossing the US$1 billion mark for the first time.
The company expects this region to continue to make up a third of its total business. A recently implemented organisational structure shows its intention to put more focus here.
CWT recently appointed Mr Berthold Trenkel as COO, Asia-Pacific. The region was previously combined with Latin America under president, Mr Geoffrey Marshall. Mr Marshall has since taken on the role as president, Latin America and partners network.
Mr Trenkel outlined his immediate priorities: "Definitely China because 60 per cent of travel in China is for business reasons and currently we are only serving a small part of the MNC market. My second priority would be Japan as even with the biggest local agency (JTB) as partner, our market share is small as local companies are still using smaller agencies."
