Amex GBT takes over rival TMC Hogg Robinson
Ian Taylor
ian.taylor@travelweekly.co.uk
American Express Global Business Travel (GBT) has agreed to buy Hogg Robinson Group (HRG) in a deal to bring together two of the world’s top-three travel management companies (TMCs).
The deal values HRG at up to £410 million, with the acquisition expected to go through subject to regulatory approval in the second quarter of the year. The companies’ combined 2016 UK sales were about £2 billion. Details of the leadership of the combined business had yet to be finalised as Travel Weekly went to press and it is unclear whether HRG chief executive David Radcliffe will take a prominent role. But a statement to investors said the combined business would use “the best available talent from both Hogg Robinson and GBT”. A spokesman said no decision has been taken on whether the
“The complementary footprints of our companies will improve our global scale and reach”
HRG name will continue. In a separate but related deal,
HRG plans to sell its payments technology subsidiary Fraedom to Visa for almost £142 million. American Express GBT will
pay between £375 million and £410 million for HRG, depending on whether this second sale goes through, probably in March. American Express GBT is owned
by a private equity-led consortium of investors formed by PE firm Certares and American Express in 2014. The company was formerly solely owned by American Express. Investors in the TMC include the Qatar Investment Authority. UK-listed HRG reported revenue of £302 million last year. The company was founded as an
RADCLIFFE: Role of HRG’s head in merged firm is not yet clear
insurance broker in the City of London in the 1840s. In a joint statement, American
Express GBT and HRG said the merger would accelerate growth “by utilising complementary footprints and solutions”, combine “two advanced platforms”, deliver “cost savings and scale benefits” and “maximise efficiencies”. American Express GBT chief
executive Doug Anderson said: “The complementary geographical footprints of each company will improve the global scale and reach of our business.” Radcliffe said: “This represents a good deal for shareholders and stakeholders. I’m heartened by American Express GBT’s reassurance that it will utilise the best talent and technology from both organisations.”
Thomas Cook revenue up 7% in Q4 2017
Thomas Cook reported a 7% rise in group revenue to £1.749 billion for the final three months of 2017, the first quarter of its financial year, and cut its underlying operating loss by £10 million to £42 million. Chief executive Peter Fankhauser hailed a 10% rise
in group airline capacity for this summer “to meet increased customer demand in recent months”. Group bookings for the current winter season were
up 8% year on year to February 3, with UK bookings flat but average selling prices (ASP) from the UK up 6%, “largely reflecting bed cost inflation in our biggest winter destination, the Canaries”. Group ASP fell 1%. Fankhauser said summer 2018 trading to February 3
was “encouraging” and added: “Turkey, Egypt and Greece are seeing good growth across all source markets, while the very strong demand for Spain over the past two to three years appears to be normalising.” He reported a 3% rise in summer 2018 bookings in
the UK and average selling prices up 6% year on year. But Fankhauser said: “We continue to see significant margin pressure in holidays to Spain due to higher hotel cost inflation and increased flight capacity. “We’ve got the year off to a good start and taken early
action to meet strong demand for eastern Mediterranean destinations, enabling us to shift capacity out of the Spanish islands. But it is a highly competitive market.”
15 February 2018
travelweekly.co.uk 79
PEAKSWATCH Latest GfK bookings data
SUMMER 2018
Week to February 3 % change in passengers booked on comparable week 2017
7%
Change in average selling price (ASP)
£30
Season to date % change in passengers booked year on year
5%
Average selling price £30
% change in family bookings year on year
6% WINTER 2017-18
Week to February 3 % change in passengers on comparable week 2017
1%
Change in ASP £78
Season to date % change in passengers booked year on year
4%
Average selling price £52
WINTER 2018-19
Week to February 3 % change in passengers on comparable week 2017
11%
Season to date % change in passengers booked year on year
16%
Average selling price £61
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