As activity ramps up in the business travel space, TripActions has announced its first-ever acquisition, buying high-end travel management company Reed & Mackay for an undisclosed sum.
The deal follows TripActions’ recent $155 million funding round in January, which - along with TravelPerk’s $160 million raise in April - signals a sign of confidence from investors in corporate travel startups helping fuel recovery.
With Reed & Mackay, Palo Alto, California-based TripActions says it will be able to provide a corporate travel and spend management solution for any company of any size, anywhere around the globe.
“This is an amazing story of bringing together a very tech-focused, tech-forward, user-centric organization with undeniably the strongest service-oriented travel agency in the world,” says TripActions chief travel officer Danny Finkel.
Founded in 1962 by Bob and David Boardman, London-based Reed & Mackay caters to high-performance professionals that have specialist and exacting requirements across more than 50 markets.
“There’s never been in history this sort of coming together of organizations [like TripActions and Reed & Mackay] to form this cohesive story, and it will allow us to be able to essentially service the needs of any person in any company, in any sector, in any segment, in any industry, in any location around the world, which is tremendously exciting.”
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What unites TripActions and Reed & Mackay is both companies’ “insane, almost myopic” focus on the user, Finkel continues. "I think that's what's going to make this marriage truly successful, because we're so aligned ideologically and philosophically."
In other words, no matter the user – be it one who’s tech-savvy and accustomed to transacting online, or a road warrior or member of the C-suite who requires a bespoke service – their needs will be met.
The combined group will manage $5 billion in travel budget and serve more than 5,000 customers around the world, including companies such as Lyft, Nilfisk, Zoom, Lennar, and Springer Nature.
“This acquisition significantly changes the TMC landscape and it is pleasing to see TripActions further its investment in the European market,” says Scott Davies, CEO at the Institute of Travel Management (ITM).
“Combining the corporate travel and spend technology of TripActions with the high-touch service and scale of Reed & Mackay will create a very compelling proposition across a wide range of market segments.”
Although TripActions CEO Ariel Cohen said in January that the company, which was founded in 2015, had not yet identified companies worth acquiring, Finkel says the Reed & Mackay deal is something the company had been thinking about long before the pandemic. “They very much did not need to sell. This was both of us thinking this was an amazing opportunity to cater to the needs of everyone out there,” he says.
“I think if anything, the pandemic sort of created an almost unique opportunity because we know there's light at the end of the tunnel, right? I feel like we've seen the tipping point in leisure travel, and we're pretty close to seeing the tipping point in corporate travel, at least regionally.”
Finkel adds that Reed & Mackay has already invested heavily in its technology and functionality, “so they already come from this tech-forward mindset that I think is actually pretty unique within the TMC space.”
As for future acquisitions: “Obviously nothing’s off the table, but I would say the focus right now is making sure that we integrate [Reed & Mackay] correctly, making sure that we do the right thing for our customers, making sure we do the right thing for our employees.”
Reed & Mackay will retain its brand and employees, and over the coming months, TripActions' “VIP travelers” – C-suite members, EAs and board members – will start to receive a higher level of service. Although TripActions has existing Luxe and Enterprise offerings, exact product overlaps have not been mapped out yet.
While corporate travel startups – or the “new model,” as Cohen has said – are attracting investor attention, consolidation is occurring among traditional TMCs, or what Cohen refers to as the “old model.”
Just yesterday, Expedia Group announced the sale of its corporate travel division Egencia to American Express Global Business Travel.
When asked how traditional TMCs might view the Reed & Mackay deal, Finkel says: "We're becoming very well-known and very well-respected in the tech community, and we're coming together with the crème de la crème of service.
“[Other players] are obviously good at a lot of things, but they don't have that strong niche.”