DOUG ANDERSON JOINED AMERICAN EXPRESS GLOBAL BUSINESS TRAVEL as chief executive in August 2016, after eight years in the same leading role at Carlson Wagonlit Travel (CWT). During his tenure at CWT, he says “the landscape changed dramatically for business travel. Technology became the key driver and differentiator. I think at that time we were quite innovative. But we didn’t have the bandwidth that GBT has.”
By bandwidth, he’s talking about investment funds. When Amex GBT was spun off from the card giant in a US$900 million joint venture deal with an investor consortium in 2014, “a fair bit of capital went on the balance sheet”, he says, somewhat understatedly. “That enables us to grow and expand the business – technology, geographic expansion, partnering – in a way that none of our competitors can. That’s very exciting for a senior management team.”
I’m talking to Doug at the travel management company’s UK headquarters in Canary Wharf. I ask him how he sees the impact of technology on managed travel. “Ten years ago, travellers were almost seen as a necessary evil,” he says. “They made a lot of noise and often complained, while managers were trying to procure in a way that was cost-effective and keep travellers at bay.”
He says this model started to change after the 2008 financial crisis when “travellers were given more flexibility to come up with creative ideas and solutions during the crisis – and it worked.”
So companies decided to cut out a lot of internal travel and give travellers a voice in the optimisation of the travel programme. “The consumerisation of travel is starting to bleed over into the business travel channel,” says Doug. “Travellers have a more important place. They need to be communicated with as human beings, as individuals rather than a commodity. As an industry we have invested heavily in developing services for the traveller, primarily on the back of mobile technology – because that’s the only real way to get to travellers in real-time when they’re on the road.”
Meanwhile, managers continue to focus on optimising their programmes. “So they want actionable analytics, not just data. We have five-plus years’ worth of transaction data and we process 50-60 million transactions a year – a gigantic mountain of data. That’s interesting, but primarily not of much use until it’s turned into actionable insights.”
How does a TMC survive and thrive in today’s challenging conditions? “That’s what I’m trying to figure out,” he laughs. “It is a tough market, very competitive. But, on the other hand, it’s interesting how ‘sticky’ it is; how loyal the client supplier relationships are – if we do our job well.”
He adds: “If there was only one key metric to measure the business with, it would be client retention. Because it’s so important we maintain those relationships. Our client retention for this year will be around 97 per cent, which I’m quite pleased with.”
Another key area of focus is mobile tools – essential for traveller loyalty, says Doug. Amex GBT is currently testing an instant messaging ‘chat’ service on the app, and is also working on a deal with Uber to distribute content. Being able to offer ‘full relevant’ content, including non-global distribution system (GDS) suppliers, is the biggest challenge facing the industry today, he says.
Doug is sanguine about suppliers aggressively targeting direct sales. Amex GBT does a lot of RFPs, he says, and “there is more negotiation than you might think that takes place with airlines and hotels”. So while suppliers might want to drive direct bookings and reduce distribution costs, the fact remains that “we own the relationships with our clients and their travellers. We’ve worked hard to create value for our clients around the services we offer.” The channel is alive and well, he says, adding: “It’s interesting, the fact that there is more airlines and more content in the GDSs today than there have ever been.”
Doug says duty-of-care has risen to the top of the list for buyers, and cites a tie-up with Amex cards to offer a service called Expert Care. “If the traveller is an Amex cardholder, we use the card swipe to get almost real-time access to where they are.” This is enabled by the fact that the TMC is 50 per cent owned by the card giant – “a differentiator that should be in place for a very long time,” he says.
Finally, I ask the question every American must be sick of by now. What does he think about the US election results? “I think the dynamic is pulling in two directions. On the one hand Trump has talked a lot about infrastructure investment, which I think is good for the economy and also our sector. For example, next-generation air traffic control uses capacity more efficiently and lowers operating costs.”
But the other aspect is the isolationist stance seen in the campaign (“though I don’t remember many politicians that actually delivered what they campaigned on to begin with”, says Doug) that could restrict trade and travel. “That’s going to pull in the opposite direction, and I don’t know which is going to have more impact.”
DOUG ANDERSON is CEO of American Express GBT. He served as the CEO and president of CWT after initially joining as chief financial officer. Prior to that, his roles included finance director at Eastman Kodak Group, CFO at aviation specialist SITA, and CFO for UPS Logistics Group. Doug is a Certified Public Accountant and has a BA in Business Administration from the University of Nebraska. He currently resides with his family in the London area.