Skift Take
Mergers and acquisitions were undoubtedly the heading in 2021, as business travel agencies regrouped after a grueling year fighting the pandemic.
Matthew Parsons
There’s always been murmurings of consolidation in the business travel sector, for a range of reasons. Pre-pandemic it was mainly about creators of smaller sized, maybe older, travel agencies deciding to call it a day, cash in and offer up to a rival. However combination escalated in 2021.
The bigger moves included American Express Global Organization Travel buying Egencia, TripActions obtaining Reed & Mackay, and TravelPerk getting in the UK with its acquisition of Click Travel. Even banks are purchasing travel-booking platforms. There’s more of a rundown here.
This all matters since the whole landscape will change. Not in 2022, possibly not in 2023, but whenever the real picture emerges of the dominant travel agencies (and there won’t be numerous) is the point when companies and their travel managers will respond.
Travel supervisors and purchasers select their firms for a range reasons. Alliances are based upon more than business terms; there’s culture, service, geographic locations and more. Yet all these go out the window when the firm they picked gets engulfed by another one, and they find the fantastic piece of software or reservation tool they originally selected is being made redundant.
One startup company CEO said travel supervisors just weren’t feeling the love, or the attention. “You get the phone, the agents aren’t the very same, your account managers aren’t the same. They’re concentrated on integrating their new organizations,” stated TakeTwo Travel Solutions’ Chris Thelen.
Sadly there will be job losses over the next few years. New owners will look for effectiveness and will not tolerate overlaps. And while a lot of agencies restructured in 2021, the jury’s still out on just how much less corporate travel will be scheduled.
There’ll be a lot of account switching over the next couple of years, which will lead to disruption, and eventually provide more chances for a “third generation” of travel bureau to sweep in.
A year before the pandemic, Spoof’s Andrew Sheivachman explained that debt consolidation develops travel brand name bullies. Undoubtedly he was writing about the larger travel market when he stated “tourists have no option but to endure the results of consolidation on the travel ecosystem. The good news for smaller and emerging travel business, though, is that while huge rivals are focused on beating each other, there is fertile ground below to deal with the innovation and items that will press forward the more stagnant segments of the industry.”
However it holds true for the business travel sector, and we’re currently seeing a number of startups get the rate, including business like Concur co-founder Steve Singh’s Spotnana brand name and blockchain-based, airline-focused Winding Tree, not to mention smaller store companies that will choose their battles on particular routes.
And we might not have heard the last of SPAC, or unique purpose acquisition business, mergers either. Amex GBT slipped in an approaching handle a so-called blank-check company backed by manager Apollo in December, with a view to end up being a publicly traded business in the first half of 2022. Depending on the outcome, it might just whet financier cravings even further.
CORRECTION: A previous variation of the story improperly stated Spotnana was a blockchain-based company.