Suzanne Horner, Gray Dawes’ chief executive, talks to Matthew Parsons about acquisitions and ‘finding gems'
Gray Dawes Group is a TMC with an appetite for acquisitions, snapping up five companies in the past three years. Historically, chief executive Suzanne Horner tells me, she likes to announce them on December 1. We’ve a wait before a potential sixth – which could be one of the biggest yet, she hints - but across the industry it’s a theme that looks likely to continue.
Following American Express Global Business Travel’s acquisition of HRG, Reed & Mackay bought Hillgate, while more recently Corporate Travel Management (CTM) has acquired a majority stake in Hong Kong-based Lotus Travel Group.
Consolidation is a hot topic, and Horner believes there will be more interest from investment companies wanting to help TMCs grow and scale more quickly. “Having done five acquisitions, you meet a lot of private equity people; there’s a lot of cash around,” she says.
One possible reason behind consolidation is competitive edge. To keep their own costs down as travel buyers and managers demand better rates, and increasingly it is only the larger TMCs that can meet these demands – acquisitions bolster the buying power and economies of scale.
“Some of the smaller TMCs are wondering how to survive. Technology and automation plays a huge part in our success, anything that can be automated is; If I had to phone Best Western to book a room, for example, I’m losing that productivity,” Horner notes.
From Gray Dawes’ perspective, it has adopted a pyramid-like technology model, with its employees (150 across five UK offices, plus 30 homeworkers) able to access a single point for selling. Under that, Gray Dawes plugs into the likes of Expedia Affiliate Network, HotelHub and Atriis (which importantly offers NDC content).
“As a TMC we’ve been forced to collect every single price point,” Horner complains – adding a rehetorical “Who pays for that?”
On this issue, Horner is vocal is about how some travel buyers ask for more “transparency” over pricing models being used by TMCs. “You don’t go into Marks & Spencer and ask what margin they make. Why is the travel world being separated from the rest of the retail world? It’s not about transparency, but honesty,” she says, adding companies could be more transparent around administration.
But for now, Horner is relishing discovering the parts of other businesses that weren’t exploited. Matchdays.com, for example, was buried in with the Travel Management Group deal. It pairs major sporting event tickets with hotels, and is a cheaper alternative to traditional corporate hospitality packages.
“It’s a special project, to find those little gems,” Horner says, “that’s the really exciting part once you’ve acquired the company. How can I take ideas and bring them into our business?”
Horner’s eyes also light up when talking about the start-ups showcased at this year’s GTMC Conference. She hopes to integrate Culturemee, for example, which provides practical cultural tips on doing business in other countries, into Gray Dawes’ offering.
She’s also busy working on an “internal TripAdvsor” for SME clients, but with anonymous reviews, and a more joined up approach so a booker could see when “three people are looking at this hotel”, as Expedia displays. She discovered different clients can work on the same jobs, staying in the same hotels, so this would appeal to them
Currently a £115 million turnover business, Horner says it could target £200 million in the next three years, through acquisitions and organic growth. “But if we didn’t acquire again it wouldn’t be the end of the world,” she adds. “We’ve been aggressive for the past three years. We can regroup and refocus; we want to wow the customers.”
On the acquisition trail - Gray Dawes list of purchases over the past three years:
December 2017: Redhill-based CTM
December 2016: Travel Management Group and Cambridge Business Travel
October 2015: Travel Focus Limited
April 2015: The Business Travel Partnership