Leaders at BCD Travel discuss biz travel environmentBy Jay Campbell
Business Travel Media Group editorial director Jay Campbell met with BCD Holdings chairman John Fentener Van Vlissingen and CEO Joop Drechsel last week at the company’s headquarters in the Netherlands to talk about the business environment since the Great Recession. BCD Travel is the largest part of the $17.7 billion company,
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Drechsel: It has been a learning experience. We came through that period much stronger and not at all beaten. We were at the forefront of cutting our costs and rightsizing the company. It was done at the expense of some very good people who unfortunately we had to let go, but as a result we remain financially robust despite taking the hit.
It’s still a scary world out there. Every now and then in the global political arena,
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2010 turned out to be more than a satisfactory year. If you look at 2011, overall you can see that customers have come back to travel, very rapidly as a matter of fact. but I can see the growth pockets in Asia,
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Campbell: Do you expect big clients to adjust their travel budgets as they run out due to higher prices and increased demand?
Drechsel: What I have seen coming out of the crisis is that a lot of our customers have redefined some of their travel budgets,
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Van Vlissingen: We were at first surprised that Park ‘N Fly did not pick up at the same speed as the travel did, and then we analyzed it and found that people stayed one day shorter in the parking lot. They just go shorter and they go earlier. Now it’s changing a little bit and people are now getting a little bit more relaxed,
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Drechsel: The premium economy approach from KLM in Europe has worked extremely well. That’s a class that is normally 100 percent booked. It’s more politically correct to sit there than in the front.
The other thing is that I can see meetings and incentives coming back. That is traditionally the first area that is cut. On the M side, we can see a lot of activity coming back because people like to buy when things are cheap, and so you see quite a lot of hunters in the world at the moment looking for potential things to pick up.
Campbell: There are so many more tools now for companies to see what they are spending even at the business unit level,
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Drechsel: That is definitely an issue. We have all become so much more sophisticated than helping them managing their budget, that the budget itself becomes also no longer an excuse anymore. In the past you could actually overspend without knowing it.
Campbell: When we last saw each other, John,
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Van Vlissingen: I am totally not involved in the day to day management. I do a lot on charity,
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We as a family have a lucky situation in that we are not dependent on the dividend of BCD. We are in it for the long play, and we are in for the next generation, so we are not open for any discussions which will change that.
Campbell: One thing that I remember you were passionate about was that if something changed with HRG,
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Van Vlissingen: No. Our percentage is up 1 percent; now we have 22 percent. I have a very good relationship with David [Radcliffe,
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It would have been, at that time, very dangerous if they would be taken over by somebody else. So the situation has not changed,
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Drechsel: We still have a number of joint clients. That is of course at some stage running out,
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Campbell: There was a restructuring of revenue for TMCs starting in the mid 1990s, then there was a shift of some of the income to clients from suppliers. Has that been pretty stable since then?
Drechsel: I think we’ve moved more and more toward income from the customer side, which is healthy for the industry. On the other hand, we still receive compensation for our part in the distribution chain,
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So I think we’ve come to a more balanced approach here where customers realize that there’s a lot we do for them, which they pay for either on a transaction or on a management fee basis and we sort of have a part in the supply chain toward suppliers,
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Campbell: The trend was shifting toward more the client,
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Drechsel: No I think it would still go on, although it will never be 100 percent only, again because we would not do everything that we do for our suppliers for nothing.
We have some choices here. I can bring customers toward one or the other and that is something that we also do on behalf of the customer. So we actually leverage the customer position to those suppliers, and then we hand it back to the customer and that is part of what we need to do.
Lauren Darson assisted in compiling this article, which originally appeared in sister publication The Beat.
CORRECTION: The Beat regrets publishing hearsay last week in a reference to headcount at American Express Global Business Travel’s Advisory Services. What follows is an unedited letter from the company,
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