Two of the world's largest travel management companies have
become one. American Express Global Business Travel last Thursday completed its
410 million British pound takeover of Hogg Robinson Group to create a TMC that
handles a combined $36 billion in annual transaction value. The mega of all
megas now has mega integration work ahead.
Integration of the two organizations, their people and their
technology has begun in earnest.
"The real work starts now," Amex GBT CEO Doug
Anderson said in an interview. "We've done a lot of planning, but planning
is a desktop exercise."
The new company named Amex GBT executive vice president of
traveler care Joanna Macleod as chief transformation officer "to
facilitate the successful integration of the companies," according to Amex
GBT. Meanwhile, HRG COO Bill Brindle joined Amex GBT's executive ranks as COO.
Already announced, former HRG CEO David Radcliffe has joined Amex GBT's board.
"We'll be working hard on three primary objectives
around bringing together our complementary global footprint, our highly
complementary tech stack and then the best of both in regards to our people,"
said Anderson. "My principle around this from the beginning has been to
find the best of both organizations and bring them both together so we end up
with one plus one equaling three or four or five."
Anderson spoke with The Beat (a Travel Weekly sister
publication) to address integration and next steps. Below are some key areas.
How long does a complex integration of the people, systems
and operations of two large, multinational organizations take? Anderson wouldn't
commit, saying only: "It will not be done in 2018, but I think there will
be visible changes in the organization and our face to the market that will be
visible immediately. This will take some time. I'm not going to put a date on
Each of these TMCs operates a variety of technologies -- internal
tech stacks to carry on their daily operations, as well as client-facing
technologies in the realm of mobile, data reporting and booking.
A common theme in Anderson's remarks was "best of both,"
and that applies to technology. "Already, company leaders have undertaken
a technology review," he said. "We intend to harmonize or consolidate
onto best-of-both platforms for front office, mid-office, back office on the
internal and operating side and also on our client-facing technology. The
longest time line of activity will be around the products and technology
because we're deployed in the field with independent technology stacks."
He continued: "As we make those decisions, we'll be in
communication with clients, making sure that they're comfortable with any
changes we want to make. Our objective is to offer up a set of solutions and
services that are as good as or better than what they have today."
When the deal went public in February, Amex GBT estimated
that job cuts would decrease the combined workforce by 6% to 8% once fully
"We're in a growing environment right now with strong
client retention, so we will lean, I believe, toward the lower end of that
range or maybe slightly lower than the lower end of that range," Anderson
For the 12 months ending March 31, 2017, HRG employed an
average of 4,360 people per month for that fiscal year, according to its most
recent annual report. Amex GBT, meanwhile, has stated it employs around 12,000.
Asked what employee groups are most likely to see cuts,
Anderson said "support areas: not areas that support clients but areas
that support functions and infrastructure," he said.
He gave accounting as one example: "When you think
about supporting the accounting system, we'll move to a single suite of
back-office technology to support accounting and other functions and we'll need
to support one rather than two systems. That's where some of those reductions
will come in, and you can think about similar opportunities across other
support areas. We'll also have some opportunities where we have overlapping
Meanwhile, Amex GBT has lined up a senior management team,
said Anderson, as well as the next level down.
Prior to the deal's completion, "we haven't been able
to make formal job offers. But we have had those discussions and do know who is
going to be in those permanent roles in the first two levels of the
Expanded geographic presence was among the rationales for
the deal. Amex GBT picks up a few new wholly owned locations, while the
combined network opens up several new wholly owned locations for HRG clients in
the long run. They number by the handful, not by the dozen, said Anderson.
"Our geographic footprint will expand," he said. "We
have proprietary business in some markets where HRG today has partners, and HRG
has proprietary business in some markets where we have partners." Anderson
further noted that in markets that rely on affiliate partners, the combined
company will explore "where it might make sense to take equity or
ownership" and bring on additional wholly owned locations.
In addition to bringing on new locations, Amex GBT
strengthens its presence in multiple markets: "HRG is bigger than we are
in Canada, for example," he said. "We're bigger than they are in the
U.S. There is complementary scale in several markets in Europe."
New Distribution Capability
Amex GBT has espoused a view that NDC stands for "not
direct connect," highlighting its preference for global distribution
system-based distribution, not one-off application programming interface
connections to individual carriers. HRG, on the other hand, has demonstrated at
least some desire to hook in content directly from airlines. IATA has certified
the latter as a Level 3 NDC-certified travel seller.
"The rich content that the airlines want and are
starting to distribute under the NDC initiative is an area that GBT has been
interested in pursuing," said Anderson. "HRG is farther along the path
on NDC, but our strategy around NDC is highly complementary. We're working hard
and will continue to work hard to give clients access to full content
regardless of source. We've both invested in channels to drive omnichannel
Amex GBT's multi-source content-aggregation system is called
Content Hub, HRG's is called OneView. HRG's website describes OneView as its
content solution that "will enable us to access NDC content across GDS,
aggregator and direct channels and ensures that customers have more choice
while offering our suppliers more channels to market."
Where HRG already enables direct connections with airlines
for individual clients, "we'll continue to support those relationships and
support those clients. We're not going to walk away from those client
Anderson also noted: "As is the case with the other
technology investments, we'll pursue a best-of-both strategy around NDC. On the
back of HRG's work around NDC, I can see us accelerating our adoption going
forward on a combined basis. That is separate and distinct from direct connect."
A "work stream" is underway around future branding
of the combined organization, said Anderson. Don't expect the HRG name to
immediately go away. "The HRG brand and logo will continue to exist, and
it will be underpinned with a tagline: 'This is an American Express Global
Business Travel company,'" he said. "We'll leave the HRG brand in
place for the foreseeable future." Beyond that, "we'll be looking at
brand strategy going forward as we work through this integration."
Messaging to clients
HRG and Amex GBT come together each with its own set of
client relationships, contracts and obligations.
"They will see no change initially," Anderson said
of current clients. "We'll focus keenly on delivering business-as-usual
service in both organizations. We want to retain our clients, and both
companies have high retention rates in previous years and year-to-date this
year. As we start to harmonize technology, we'll have discussions with clients
around changing platforms where it makes sense."
Amex GBT's and HRG's combined travel transaction value is
unrivaled by any other TMC.
"Our scale will deepen our relationships with our
supplier base," said Anderson. He said Amex GBT vet Mike Qualantone will
continue to run supplier relations for the combined company.
"We'll be working hard to bring added value to the
supplier base," said Anderson.
When Amex GBT renegotiates with hotels, airlines and others
on contracts "will more or less line up with existing contract terms, but
we're looking at that as an opportunity for our supplier partners to deepen
their reach and distribution across the client base."
Source: The Beat