The Year Ahead - Top BCD Travel brass predict continued growth in 2008

In keeping with tradition, BCD Travel’s executive team is ushering in the new year by turning its gaze beyond the next horizon.

Three of our top executives discuss a handful of trends they expect will affect BCD Travel in the year ahead.

Dee Runyan

Executive Vice President, Products, Technology and Supplier Relations

First, BCD Travel’s commitment of a seasoned veteran leader – Mike Buckman – will support the further development of our offering in a key region of the world – Asia Pacific. The region is projected to continue its rapid economic growth during the next five to 10 years, and we can expect BCD Travel’s presence there to rise.

India will be reorganized under APAC, and the growing Indian middle class will drive an expansion of the travel business.

In March, agreements under Open Skies treaties also will increase the service options over the North Atlantic.

On the technology side, BCD Travel’s new Source Platform, first tested in the United States, will launch European rollouts in Germany and Belgium in the third quarter.

A huge expansion in telephony (hardware and software that connects all the contact centers), established through an agreement with Siemens, will allow BCD Travel to more efficiently route calls globally, thus providing resources where needed, regardless of location. In addition, we’ve developed automated fulfillment solutions currently being testing in the United Kingdom and Germany.

Oil prices reached US$100 per barrel in the first days of 2008. Continued high fuel prices will spread the pain, even affecting the cruise lines. Most airlines did not anticipate these fuel price increases, thus leading to an expectation of further consolidation in the airline industry and in the agency business.

I expect to see the friction between carriers and GDSs exhibited last year in the U.S. spread to Europe. In the U.S., the standoff took about 18 months to play out. Eventually, GDSs cut costs to airlines and then turned around and raised fees for travel management companies, who in turn passed it on to corporate customers, who now pay a premium to guarantee access to content.

 

Ilona De March

President, EMEA

Expect a significant jump in 2008 in online booking.

Traditionally, clients haven’t seen the benefits of online booking because many still find it easier to pick up the phone and call a travel agent. The United States has been quicker to embrace online, but across Europe only about 10 percent of all bookings are made online. Germany is at 11 percent and represents 52 percent of all online transactions in Europe.

The adoption of online differs within Europe. Whereas in central and northern Europe, we see higher adoption rates, travel bookers in Southern Europe still prefer to call, so their adoption rate is much lower. We are seeing a push by international clients for more online booking in Europe. For example, Switzerland-based Nestlé and Luxemburg-based ArcelorMittal both now mandate it.

Online booking across Europe ­– including air, hotel, car and rail ­– will increase to 15 percent in 2008.

Another emerging trend in Europe that could affect the travel management industry is the rising popularity of high-speed trains as an alternative shorter airline flights. Rather than facing all the hassles of air travel in the current security environment, expect to see more clients taking the train from, say, Amsterdam to Paris, beginning in the second half of 2008.

The significance of this is that rail travel for the most part cannot be managed on an international level – it’s all local or national. In many countries rail can’t be booked through a GDS. There is a different process for booking in each country, which makes booking rail a more lengthy process with a higher travel agent cost.

Anticipating this change from air to rail developing in the next 12 to 36 months requires providing the right tools to agents, as well as clients, to ensure the booking process is as seamless as possible. The challenges of booking rail create an opportunity for BCD Travel with the rollout of the Source Platform as it enables us to provide a solution with full access and content.

 

Greg O’Neil

Senior Vice President, Partner Network

What’s the outlook for emerging markets during the upcoming year?

Look for BCD Travel in 2008 to continue increasing its presence in Europe, the Middle East and Africa, as well as, Asia Pacific, where additional ownership is expected. While BCD Travel already is well-represented in most major markets in APAC, we are looking to Cambodia as an option.

BCD Travel also is looking in 2008 to expand into roughly a dozen new countries in Africa. Currently BCD Travel enjoys a presence in nine of the top 10 markets in Africa –South Africa, Kenya, Ghana, Nigeria, Egypt, Libya, Tunisia, Morocco and soon Algeria.

As in the past, two formidable challenges will continue to serve as the largest hurdles: political instability and unfavorable economic conditions. Look for net bookings in Africa to well surpass the 26.4 million of 2006. 

The push for standardization and globalization continues to drive emerging markets, where small and medium, enterprise organizations predominate. SMEs are less cost-driven and more service-driven. Look for BCD Travel to strengthen its resources, particularly focusing on relationships and alignment.

 

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