Egencia, Expedia Inc.'s corporate travel unit, expanded into Brazil, Mexico, Japan, Czech Republic, Slovakia, Austria and Malaysia as it tries to erase the distinction between ITMCs (Internet Travel Management Companies) and traditional TMCs by going after large global corporate accounts.
Egencia says these new relationships with Business Travel Unlimited in Austria, Czech Republic and Slovakia; Tour House in Brazil; Corporate Travel Services in Mexico; Hankyu Travel in Japan; and Mitra Malaysia in Malaysia add to Egencia's portfolio of points of sale in 15 countries plus nine global partnerships. With the five partnerships in seven countries revealed today, Egencia has a presence in 31 countries.
The global partnerships combine Egencia's corporate booking tool with global consolidated reporting, and the regional partnerships bring local expertise, Egencia says.
"Egencia is growing significantly in the large and very large client segment -- a segment that demands a larger footprint," says Leila Labanieh Moro, Egencia's director of alliances for Latin America. "An increasing number of our clients are looking to consolidate their spend worldwide and this is the first step in an accelerated international expansion strategy with a focus on delivering first-class corporate travel services and access to global reporting and analytics."
Norm Rose, owner of Travel Tech Consulting, says Egencia's expansion model is similar to the way in which global consortiums have branched out, however, "the difference here is that Egencia is able to implement a single, common front-end through the Egencia booking engine."
That Egencia booking engine, Rose says, will have to be "internationalized and localized to fit the specific market.
He adds that Sabre's GetThere, the corporate booking tool with the largest global footprint, had difficulties in the early days adapting to local market needs, including taxes, business process flow and inventory sources.
"The line between an ITMC and TMC is fading fast," Rose says. "The key will be the ability of these strategic partners to deliver the consistent service that has been the ability of American Express, Carlson Wagonlit Travel, BCD Travel and HRG through their global networks. The proof is in the detail of the implementation and the way the partner interacts with the client."
Like the traditional TMCs have done for years, Egencia tried to expand beyond its electronic offering in 2009 by placing travel agents on the ground at corporate sites.
Egencia says its focus with the new regional partnerships is on localized service in those countries.
It aims to combine global consolidated reporting, offline services and locally sourced air, hotel and car inventory, the company says.
Egencia claims to be the "fifth largest travel management company in the world," based on gross bookings.
It reported almost $1.4 billion in gross bookings in 2009, a 9% decline from 2008 because of the plunge in corporate travel. And, its operating income was $1 million, down from $5 million a year earlier.
A source at one global TMC scoffs at Egencia's "fifth largest" claim, adding the the global TMC doesn't even consider Egencia a competitor for large, global accounts because Egencia doesn't yet have a systematic worldwide offering.
Egencia defends its fifth-largest TMC claim by saying, "Egencia determines its market position through a research process that evaluates our gross bookings against the competitive landscape."
Whatever the precise positioning is, Egencia notes that it is engaged in the initial phases of an international expansion.
And its parent company, Expedia Inc., while acknowledging that business travel is lot more difficult than it first imagined, still believes there is a lot of potential for the company in the corporate market.