Industry insiders expect that Travelocity’s sale of Travelocity Business, known as TBiz, will give a boost to TBiz as well as to its new owner, BCD Travel.
The transaction, which was announced this week, marks the end of Sabre-owned Travelocity’s 10-year bid to compete in the business travel arena against fellow online titans Expedia and Orbitz.
BCD Travel said its acquisition of Texas-based TBiz does not include products, services or customers of the consumer travel brand Travelocity.
Under BCD Travel, the Texas-based travel management firm will continue to operate under the TBiz brand and serve its existing clients.
“Over the last 10 years, Travelocity Business has grown into a powerful force in corporate travel,” said former Travelocity Business president Yannis Karmis, who will stay with Travelocity Global as president of Travelocity Partner Network.
“We’ve built strong relationships with our clients, and I’m confident their interests – and the interests of our employees who transfer to BCD Travel – will be very well-served by the sale of TBiz,” he said.
For growth-oriented BCD Travel, the move is a “strategic acquisition” and a “fantastic cultural fit,” said Mike Janssen, president of BCD Travel’s Americas region.
“Their success comes from focusing on customer needs, enabling travelers and offering great solutions – in other words, they share our priorities and goals,” he said. “We’re excited about the fresh ideas that we’ll be exchanging with TBiz team members.”
BCD Travel plans to offer TBiz clients access to its global network and expertise in global program consolidation, business analytics and consulting and meetings services through Advito and BCD M&I, Janssen said.
Speculation on the sale
Why did Travelocity divest itself of TBiz? There is speculation in the industry that Sabre, Travelocity’s parent company, is streamlining in preparation for a public offering. Sabre also recently announced the sale of its Holiday Autos brand to CarTrawler, an Ireland-based car rental firm.
Another factor may be that Sabre/Travelocity, while adept at mass transaction processing, is not well-equipped to deliver the personal service requirements of corporate travel management, said travel technology consultant Richard Eastman.
For that reason, “TBiz was never able to penetrate the ‘big three’ of corporate business e-travel agency providers,” Eastman said.
The sale of TBiz is a sign that OTAs in general are having difficulty in providing the kind of support and service that business travelers often need, said Jennifer Wilson-Buttigieg, co-president of New York-based Valerie Wilson Travel.
“It’s easy to do low pricing which is what OTAs do, but everyone is realizing that it’s hard to add value,” she said. “The OTAs are having a tough time competing with TMCs at brick and mortar agencies, especially now that there seems to be a disaster, either natural or man-made, that disrupts business travel every week.
Will move TBiz forward
BCD Travel has the “core competencies” to move TBiz forward, according to Eastman.
“BCD is very big in worldwide corporate travel and, by necessity, understands the need for one-off software development to meet specific client needs and for intense customer care,” he said.
Like Eastman, Wilson-Buttigieg believes BCD will provide a beneficial environment for TBiz. “It’s a natural alignment for them to go to BCD, where they can focus on high-touch service,” she said. “BCD has the infrastructure.”
Benefits for Sabre?
Eastman also speculated that the transaction may include some continuing benefits for Sabre.
“Corporate travel is a major transaction producer; something that Sabre would not give up lightly,” Eastman said.
“Underlying this transaction must be some agreement by which all the TBiz (and a major chunk of BCD’s other electronic) bookings must channel through Sabre for some extensive period of time. That would enable each to play strongly against their respective core competencies.”