Sounding Off: The travel management landscape had to change

Each Friday, PhocusWire dissects and debates an industry trend or new development covered by PhocusWire that week.

Two significant deals in business travel this week are an indication of where that sector currently finds itself.

The COVID-19 pandemic has arguably hit business travel harder than any other line of business in the entire industry, with companies unsure when and how to put their employees back on the road once more.

The situation, with close to one million new infections still being reported globally every day, is unlikely to change in the near-term, even if those same workers start venturing out on leisure trips over the course of 2021.

This pause of a still indeterminate length ahead is allowing companies in the sector to consider their options, both for the recovery - as and when it happens - and in the medium- to long-term.

The two aforementioned bits of acquisition activity (Egencia being sold by Expedia Group to American GBT and TripActions buying Reed & Mackay) are important to all the parties involved.

Any excitement surrounding the latter agreement may have been slightly usurped by the prowling of Amex GBT to get its hands on Egencia the day before (conspiracy theorists might point to the timing as being for that very reason, although with Expedia Group's earnings later in the week there was probably a fiduciary requirement in doing so, too - but, still, rather handy).

Either way, both deals are important for the acquiring companies and Expedia Group loosens itself from a sector that is uncertain in terms of recovery timescales.

TripActions, for all the talk of being tech-led and progressive, now has a traditional service structure in its armoury aimed against the establishment of travel management companies.

The huge levels of funding and now an acquisition under its belt means that both the pressure and the opportunity is on TripActions to fulfil its promise.    

Amex GBT is arguably in a different world entirely, having already pumped in hundreds of millions of dollars into improving its own technology and on the front foot with its own recovery agenda.

It also has client base in the big league of corporations that put thousands of employees on the road each year, rather than picking up the SMEs of the business world.

Yet it has bought a fellow TMC in the shape of Egencia - a deal that puts it immediately into the enterprise space and securing more reach around the globe.

Executives will no doubt say that these deals are not a sign of a market that is shrinking but one that is evolving due to tech and opportunities.

The reality is that those that have the ability to do so are positioning themselves for what comes next. They have no choice - figure out how to be part of the new leadership in business travel or languish in the realm of not taking the chances when they came along.