CEOs See Opportunity in Consolidation, Technology

A quartet of CEOs at the recent National Business Travel Association (NBTA) Convention & Exposition in Houston spoke about how consolidation and improved technologies are changing the face of the travel industry.

Sharing his outlook on the upcoming fortunes of the travel-management agency community during the Travel’s Value Chain CEO Panel, Carlson Wagonlit Travel (CWT) president/CEO Douglas Anderson sees “a fragmented market for travel-management companies.”

On the one hand, Anderson recognizes “lots of opportunity for consolidation, (making for attractive) economies of scale.”

Conversely, he said that the major players are still “a long way from (achieving) dominant global marketshare.” Anderson said that CWT’s operational game-plan is to seek continued “tactical and strategic acquisitions.”

Consolidation Makes Space for Low Cost Carriers

Consolidation is also an important factor in the airline section, according to fellow panelist, Southwest Airlines chairman/president/CEO Gary Kelly. He said that for the airlines, the near-term future will be marked by “domestic aviation restructuring (and) further consolidation among the legacy carriers.”

This creates “additional opportunity for low-cost carriers,” said Kelly.

While conceding that this might bring “lower traffic on short-haul routes,” accompanied by “higher airfares,” Kelly was largely non-committal on the eventual extent of Southwest’s route network, other than confirming his airline’s 71 current domestic destinations and aim to continue growing its international service.”

Emerging Markets Fuel Hotel Growth

Consolidation is also happening in the hospitality sector. Session moderator and TRX co-founder/chairman Trip Davis pointed out that some 59% of hotel rooms currently in development in Asia/Pacific can be tied to Starwood.

Starwood Hotels & Resorts Worldwide president/CEO Frits van Paasschen noted that the demand for lodgings has grown in the North American marketplace, but it’s the emerging markets” that are showing the most dramatic upturn.

Van Paasschen indicated there has been “more incremental GDP (growth recorded) in China than in the U.S.” Viewing this as an opportunity, he noted his properties can help to provide “a Western feel for visitors abroad;” boosting their “comfort level.”

Technology Drivers

Switching gears to the technology arena, Travelport Deputy CEO Gordon Wilson said: “More complexity… in the handling/filtering/presentation (of data as driven by) airline, hotel and other input (sources)” make for “big tech-driven opportunities.” To capitalize on those opportunities, Wilson suggested Travelport would “have to further develop its own technologies, buy some, and partner with some.”

CWT’s Anderson spoke about the emergence of “a business-traveler revolution,” resulting in “services designed to increase travel’s efficiency.”

He noted that both travelers and travel managers are looking for better ways to “track spend outside the traditional air/hotel/car-rental/rail channels.”

From his hotelier’s vantage point, van Paasschen alluded to “the generational gap” and the resulting necessity to “simplify complexities. Just because there is more information available,” he said, doesn’t necessarily make business travel easier.

Speaking about the technology challenges, he summed up by saying that the consumer’s needs are paramount. “It’s up to us to try to think ahead.”