ABTN speaks to Anthony Drury, the newly appointed VP and general manager for Amex in the UK, about his plans for the business, and his thoughts on key issues affecting the business travel sector today: mobile technology, talent retention, the distribution debate and why travel is vital for companies to achieve post-recession success.
Can you tell us a bit about your time with American Express?
I’ve been with American Express now for nine years. As we’re a big organisation the opportunity to move around divisions and move around the globe is a key attraction to a lot of people. I came across with an IT background, from running my own little dot com company, post the 2000 boom and bust. I started with three years on the card side. I then progressed to a directorship role in travel. I ran the Australian sales team for a couple of years and then through natural progression I ended up running the sales side in Asia.
At American Express, we have very detailed succession and development planning and part of mine was to use my UK passport. The opportunity came up for this position in the UK, and I was earmarked from Sydney to relocate here. English language, albeit with an Australian twang, did help. So I could assimilate quite quickly. We’ve moved across – wife, two children, and the dog is on its way – and are happily set up in a quintessential village just south of Guildford.
Is Australia similar to the UK in terms of travel?
There are some strong similarities between the two marketplaces. For example, you have a couple of dominant players – Qantas, BA, Virgin Atlantic or Virgin Blue. Obviously there is a lot more long-haul coming out of Australia, based on its geographical location, but from what I’ve seen everything – from magazines to the general feel of the place – there are a lot of similarities around how the markets operate and sit together.
What’s your view on the business travel market in the UK and how American Express fits into it?
The market itself has recovered a lot, from the data I’ve been looking at over the past couple of years, although we’ve seen changes in how customers look at travel and how customers drive their travel programmes. While the numbers have come back, it’s a very different traveller and travel buyer now. We’re seeing a lot more sophistication at the top end, and the middle market customers are maturing faster.
We segment the marketplace with a multi-national global focus, a large market focus, and a middle market or SME focus. Each of those three channels now has their own value propositions and strategies. In particular, I think the middle market has been a key focus for us in the last 12 months globally. In both Australia and this marketplace we had some heavy investment in products, technology, positioning and marketing, and our sales people, to grow that space. The results they’ve had over the last 12 months here have been great. It’s now time to build on that and take it forward.
From an investment point of view, I’m probably going to look at adding people into the middle market segment. We’re seeing a lot of customers start to mature more. I think once you get north of the M25 there are different buying behaviours, based on a lot more domestic and rail travel. I think those customers now, when they start to get their spend levels up into the £500,000, £1 million, £1.5 million mark, they’re going to start looking at travel more as a commodity. We’ve built some unique tools that cater for that.
How have you found engaging with the middle market?
The middle market is everybody who theoretically spends a couple of million and below. It’s a very different sector, in that they’re not as structured generally, from an RFP perspective. We are seeing a lot more of the larger Small and medium-sized enterprises space customers now issuing RFPs. We’ve seen what I’ve coined as the evolution of the procurement professional over the last three to five years. There is a lot more focus now on control and spend, so there has been a lot more engagement with procurement people. I think where travel is now managed has tended to move from the more admin associated role into a procurement focus. That middle market space is also seeing more of a procurement focus as well. As that matures, we’ll start to see more growth. We see that as the key growth area in the UK.
How do you balance online bookings with an offline, high touch service?
We have market-leading online penetration. Around 50% of our base is currently booked through an online booking tool, and that has been steadily growing since 2000. Customers’ needs are unique. Not everybody can go online, not everybody wants to go online. So we have the ability to deal with the online channel and the offline channel. The offline channel won’t go away. It’s about how you make that more effective. Yes, there is a cost differential. Online is more cost-effective, but in some cases, based on the complexity of what you’re trying to book online, it’s often easier to do it offline. There will always be a balance between online and offline. As things evolve, I think the more complex things are, it’s always going to be an offline world.
Does that preclude the entry of smaller businesses into the travel management sphere. Is it worth their while financially?
From that point of view, you need to weigh up the time an employee is taking to go through and book multi-sector trips on online tools, compared against one phonecall. The agent they’re talking to is skilled. You have to weigh up the cost differential. If you’re booking a complex multi-sector ticket, you’re better off going through an offline channel where you have the expertise who can assist you with every part of the end-to-end process.
Where are we in terms of business development?
We are still coming into that post-downturn phase. The customers are a lot more savvy, their behaviours are changing. We’re adapting to look at how we can convince them that travel is an intrinsic part of their business, and it shouldn’t be the first thing that gets cut. We’ve done a lot of work in helping our clients with justification for travel, with the fact you can link travel to corporate growth and show how the business should be growing.
That’s still really relevant even in this post-economic phase. It’s all about making sure we get people back out there travelling to grow their business. After the recession comes the opportunity to grow, as we have seen with a lot of our customers – hence the volumes coming through are quite strong.
To pre-recession levels?
From a forecast perspective we’re looking at 2008 numbers coming through this year, which is a good indication that it’s almost back to where it was before.
So businesses are recognising value in travel?
Definitely. We’ve seen a lot of changes over the last couple of years in how people manage their cuts. They could have stopped travel completely, if they had wanted to. Others change the way they travel from the front of the plane to the back of the plane. Others looked at videoconferencing and taking internal meetings down the telepresence channel, rather than flying. But, the power of meeting the customers face to face is the important part of it – you can build relationships effectively, and travel is a key part of that.
On the TMC staffing side, many have spoken of a talent drain in the business travel industry. Is this something American Express has seen?
American Express is really strong in talent development. We like to rotate staff around the world and across divisions. I’m a classic example of that. From a development perspective, it’s a good place to be. From a business travel perspective in particular, it’s a great place to work, but some of the challenges we’re seeing are around attracting the right level of people to the business, to the industry, and retaining them.
We found that after the dip in the last couple of years, we’ve come back with a workforce that is a lot more flexible than what we had before, to manage the ebbs and flows in travel volumes. We have plenty of part-time and work from home opportunities.
The industry as a whole needs to keep attracting people into the consulting and the travel management space, to make sure we have enough people to fulfil the needs of our customers. We are working very hard on giving development opportunities to all of our staff, whether it be frontline travel consultants or client management staff.
Developing those people is obviously critical, and making sure they’re looked after. The market has changed a lot over the last couple of years. There are not so many perks in the travel industry. You have to do other things to reward and recognise your staff, to help retain and develop them in a different way.
What do you see as some of the other main challenges facing the business travel sector at the moment?
It’s constantly evolving. If we could find a year without any kind of natural disaster, it would be quite nice! From the travel management perspective we’re constantly challenged to control our expenses, and control what we deliver from a value perspective to the customer.
Also, technology is changing very fast. Our latest focus is around mobility and how we capitalise on our mobile products. We’ve been first to market with some great products, it’s now about how we keep evolving those as the technology evolves, and make sure we keep delivering value back to the customer.
So what are we likely to see in the future?
You’re likely to see a lot more interaction between the Travel Management Company: An agency which manages business travel for a company. and the travellers, with applications which make their life easier, as well as applications that make the management of travel a lot simpler. From a traveller perspective, everything will be done on a hand-held device, as time goes on.
From a technology point of view, it’s the whole mobility strategy issue. We’ve launched a lot of products over the last few years. It’s now about maximising those products – security, pre-trip authorisation, mobility, online products. It’s about how we penetrate our customer base to maximise on the investments we’ve made and add value back to our customers.
Is that about empowering the traveller?
It’s empowering them with information, but also making sure they’re not going outside policy. Information is key, particularly around things like the ash cloud. You could communicate to your entire customer base that is impacted by things like natural disasters. That level of communication is the next phase, rather than having to rely on standard channels which are currently in place.
Some buyers and managers are wary of mobile technology, perhaps worried their travellers will use it to go outside policy. How do you view the role of the Travel Management Company: An agency which manages business travel for a company. in that?
From what I’ve seen so far, the actual point of control is within the walls of the Travel Management Company: An agency which manages business travel for a company.. The device is more of a communication tool to and from the Travel Management Company: An agency which manages business travel for a company.. The control mechanisms we have – whether you’re ringing on the phone or messaging by sms – is still there. The ability for them to go outside of policy and become maverick spenders is probably not as relevant as some might say.
On the subject of technology, how do you view the current debate on air fare distribution?
From a technology perspective, I can see where both the GDSs and the airlines are coming from. It’s all about cost control and distribution. From our point of view, it’s two-sided. The distribution channel is obviously critical to us, and having a central channel where we can control data and security for our customers is important to us. The space is evolving, and we will obviously evolve with it. We have very strategic partnerships on both sides of this debate. We are watching this space very closely.
Aside from technology, what else is American Express working on this year?
As well as the middle market, I think there will be a lot of activity in the government space in the next 12 months, with some government tenders. We need to balance the portfolio in the local market to cater for those segments, without trying to be all things to all people.
Have the public sector cuts affected Amex badly?
We haven’t had a loss in the public sector. It’s more that we see there is a growth opportunity coming. They are looking to consolidate and become more structured in how they go out to tender. There are some tenders on at the moment that could add more government business to what we’re doing.
In your first year as head of the UK business, what would you like to achieve?
Double-digit growth! There has been some great work done here over the previous years. The previous GM has left the business in really good shape, so from my perspective it’s about building on that and making smart strategic decisions to drive the business onward, whilst also making sure we have a staff base that is well rewarded, looked after and behind me going forward.