Interview
FROM COACH DRIVER to chief executive of a global travel management company (TMC), David Radcliffe is a true industry veteran. He joined Hogg Robinson in 1978 but, he tells me, he was drawn to travel much earlier in life.
Buying Business Travel editor Paul Revel talks to David Radcliffe, chief executive of HRG
David Radcliffe
David Radcliffe is chief executive of Hogg Robinson plc (HRG), an appointment he took up in 1997. He is also chairman of the HRG Worldwide Executive Board and of Business Travel International (BTI), which he was instrumental in setting up in 1990. He joined Hogg Robinson Travel (UK) in 1978 and rose quickly through the ranks. In July 2000, Radcliffe successfully led Hogg Robinson’s management buyout in one of the largest public-to-private deals at the time; and in 2006, he took the company back to being publicly listed on the London Stock Exchange. HRG is now represented, via owned operations and contracted partners, in over 120 countries. Radcliffe is a Fellow of the Institute of Sales and Marketing Management and a Companion of the Chartered Management Institute. Born in London in 1953, Radcliffe is married with two children, and is a keen power-boater.
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“When I was a teenager I took singing pretty seriously, and I sung in a youth choir,” he says. “We toured the continent once a year, and from about the age of 15 I would do their itineraries – that’s probably what got me into travel. I had to do all the waybills [international travel forms] for the coach company, and in those days you had passenger carnets [customs documents]. You had to get the paperwork right, you had to make sure you were at the borders at the time you said you’d be there. To be honest it really was fun.” On leaving school, Radcliffe continued his unorthodox career path. “I’d always harboured an ambition to live on a boat, so I moved up to the Norfolk Broads and was running a travel agency for the AA.” He helped develop the agency’s group travel business, including booking coach groups on to ferry company Townsend Thoresen’s ‘dine and dance’ trips. “For the rich price of £4.99, people could catch a coach from Norwich on a Friday night and board the ferry, which would go from Felixtowe to Zeebrugge and back again. They would dance the night away, and those that weren’t dancing would be collapsing – they’d get a litre of whisky in the price.” He also obtained his coach driving licence, and was often to be found driving coachloads of people around Europe. “I have to say it was the most fun I ever had. It was actually all good fun, doing part-time coach work and having a ball, but I was a bit irresponsible – I was living from one piece of income to the next, and sitting in a boat fishing at weekends when I could get away with it.” So as he reached the end of his 20s, he decided he should be pursuing a career. “But by then I was hooked on travel and really enjoyed it. It had a certain cachet, especially with the girls...” So he started working for Hogg Robinson, running a branch in Waterlooville, with a mix of business and leisure accounts. Despite embarking on a serious career, life was not dull: in the frightened corporate exodus during the Iranian revolution in 1979 he found himself helping to get business travellers on board “one of the last VC10s out of Tehran, when it all went belly-up”.
HRG is now a world-spanning travel
giant – it is ranked at number two in BBT’s annual top 50 leading TMCs with UK sales of £1 billion (see p57). After 35 years with the company, Radcliffe doesn’t seem particularly phased by the economic downturn that’s been grinding on for more than four years. “We no longer refer to it as the downturn – it’s gone on so long, now any organisation is best treating it as the new norm,” he says. “You’re trading in a different world now.” He is, however, witnessing the effects
on his clients: “We’re seeing increasing use of mandate, the enforcing of travel policies. But, interestingly, we’re also seeing that where clients don’t mandate policy – where following it is voluntary – there is increasing adherence by travellers, to the point where compliance percentages are almost the same as in a mandated environment. People want to support their company – they want it to be the one to survive and win.”
As well as observing the way the economic climate is affecting travel habits, including less overnight hotel stays and more use of rail in Europe, it seems the company is also seeing a change in the relationship model with its clients. According to a recent statement: “Increasingly clients are seeking a more consultative approach… where HRG is rewarded with share of cost savings.” So what does this trend mean for TMCs? “This is something we’ve done since the early 1990s – what we then called ‘open book’, where we returned all the commissions to the clients but were paid from the results we achieved. Over the years that model has become more honed in to individual clients – so you now get reward mechanisms totally linked to what that client is trying to achieve.” He thinks this performance- related model is now firmly “on the professional procurement list”. Talking of economic climate changes,
I ask David if he expects further consolidation in the TMC space – and is HRG on the hunt for acquisitions? He says the logic of consolidation “is compelling” but cites two major caveats: firstly, he divides TMCs, broadly speaking, into two types – one still driven by volume and supplier payments, with the vast majority of income from supplier payment. “It’s heading more and more towards just fulfilment – the client does the booking, the TMC just fulfils that booking.” The second type – which includes HRG –is where income is
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