Hogg Robinson Group witnessed a substantial increase in online adoption, with its lower transaction fees, in North America in the past year, and the travel management company says it took several steps to cope with this change in business mix.
The TMC says that its percentage of online bookings in North America during the year ended March 31, rose to 41%, up from 29%, a year earlier.
Of course, HRG collects transaction fees on such online bookings using corporate-booking tools, and the compensation is considerably lower than when a business traveler picks up a phone and calls a travel agent.
Although HRG faced revenue pressure from the jump in online transactions, it took a number of steps which enabled it to acheive a higher operating margin [9.8%, up from 1%] in North America than in the previous year.
"We have restructured our North America operations through a variety of business measures, including reducing the number of office locations, introducing more sophisticated and flexible telephony and transaction-processing systems, and increasing the proportion of travel consultants working from home," HRG states.
The moves in North America mesh with cost-reduction moves HRG implemented globally.
The Financial Times reports that HRG coped with the swoon in business travel last year "mainly through staff reductions."
For the year, HRG's pretax profit rose 15% to £28.4 million on revenue of £326.8 million, a 7% decline.
In addition to rising online bookings in North America, another trend HRG identifies is that North American clients increasingly are looking for consolidated travel offerings in Asia-Pacific.
"We are beginning to implement a multi-country service consolidation in Singapore for one of our larger manufacturing-sector clients, having overcome the inevitable complexities resulting from multiple languages, cultures and GDS sources," HRG says.
In other tech highlights, HRG says it completed the development phase of its Universal Super Platform, which hosts all of its travel-booking software, and the platform is now operational.
HRG views USP as a means to attract suppliers who are looking for distribution alternatives. The platform, HRG says, accesses inventory "from a number of sources rather than placing sole reliance on an industry platform."
HRG's Spendvision expense management unit took a hit in fiscal year 2010 as its operating profit fell 57% to £1.1 million.
Spendvision, which has clients in 130 countries, has opened an office in Singapore as it targets expansion in Asia-Pacific, and it entered into a joint venture in Japan to drive growth in that market.
Visa recently launched a white-label version of the Spendvision platform. The Visa platform, IntelliLink Spend Management, is being introduced globally to banks which issue Visa commercial cards.