Travel management companies
notably the gross sales figure, rather like the compilers of The Sunday Times Rich List do. These are clearly marked. We try to make these estimates as rigorous as possible. This involves looking at Companies House accounts, analysing air volume figures from the International Air Transport Association’s Billing and Settlement Plan (BSP), and taking into account public statements about growth in business. We also consult with a number of key industry figures on the validity of these figures and we believe they are a fair reflection.
Average TMC profile n Business travel gross sales 2012 £152.1m
n Number of transactions 304,922 n Transaction value £255.93 n Air 41% n Hotel 21.2% n Road 29.4% n Rail 1.8% n MICE 5.1% n Other 1.5%
The average TMC in the top 50 recorded
£152.1m in gross sales during 2012 according to our survey – this represents an increase of 6.6 per cent on last year’s £142.7m. The number of transactions handled jumped from around 250,000 to more than 300,000, but the average transaction value (gross sales divided by number of transactions) of £255.93 was less than half of 2011’s £536.67. Significant factors in this reduction include bigger transaction numbers relating to central government rail and hotel business from Redfern Travel, and relating to Capita’s acquisition of Expotel. Redfern Travel continues to do well in the new business stakes thanks to its
success in the central government travel management tender. The company says it won £75m-worth of new business during the year. Although Redfern was eclipsed by FCM Travel Solutions in absolute terms, the Bradford- and York- based company leads our fast track of TMCs thanks to having a higher level of new business compared to its gross sales (note: none of the top three TMCs provide figures for new business won).
DISTRIBUTION This year again, the global distribution systems (GDSs) are finely balanced in their usage by the leading 50 TMCs in terms of absolute numbers using them. Some 26 TMCs say they use Travelport GDSs – 18 name Galileo specifically – while just two list Worldspan. Sabre and Amadeus are identified by 24 companies this year.
FORECASTS FOR 2013 Each year, we ask respondents to participate in a survey asking about their predictions and investment intentions for the coming 12 months. You can see some of the results on the right. Our question on expected growth in the level of business elicited an almost identical response to last year’s survey – more than half (54 per cent) of all TMCs believed that their businesses would grow by more than 10 per cent in 2013 (fig 1). So where were TMCs expecting this
growth to come from? The answer, almost unanimously, was from new customers, showing that the market is going to remain incredibly competitive in 2013. Two TMCs said they were planning to expand by acquisition, while others said they would diversify their offering, either geographically or in the core services they offered.
WHAT LEVEL OF BUSINESS GROWTH ARE YOU TARGETING FOR 2013?
54% 24% 17% 0% 5% Up to 5% Fig. 1
WHAT ARE YOUR BUSINESS PRIORITIES FOR 2013?
91% 86% 35%
Winning new business
Fig. 2 42% 30%
Growing business from other areas
Improving product and service offering
Cutting costs
Growing business from meetings and events
WILL YOUR INVESTMENT IN TECHNOLOGY...
16% 40% 44%
...decrease?
...increase up to 10%? Fig. 3 Total new business won
1 FCM Travel Solutions £86m 2 Redfern Travel £75m
58
3 Capita Travel and Events £62m 4 ATPI £40m
5 Portman Travel £38m
6 Chambers Travel Management £28m 7 Click Travel £21m 8 Key Travel £15.4m 9 Uniglobe Travel £13.6
10 The Appointment Group £12.5m
The fast track Redfern Travel Click Travel
Diversity Travel
Business Travel Solutions Midas Travel Management Tzell UK
Chambers Travel Management FCM Travel Solutions Key Travel
Omega World Travel Fig. 4 2%
WHAT IS YOUR BIGGEST CHALLENGE IN 2013?
27% 25% 17% 12% 0% Difficulty in recruiting skilled staff Direct booking with suppliers Low margins Lack of availability of credit
Reduced travel by clients Growth of online booking tools
Other 17%
...stay the same?
...increase more than 10%?
0%
Negative growth 5 to 10%
Level More than 10%
MAY/JUNE 2013
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