TMC consolidation will continue, says Amex GBT boss

Read BTN Europe’s complete interview with Amex GBT CEO Paul Abbott here.

Customer demand for a combination of both offline service and high-quality technology will see consolidation in the TMC market continue, said American Express Global Business Travel CEO Paul Abbott.

Speaking to BTN Europe shortly after Amex GBT announced its plans to acquire CWT in a deal that is primarily about adding scale, Abbott said some other players’ recent investment and acquisition activity has been driven by different motives.

“I think it’s ultimately customer needs that are driving consolidation in the industry. Customers want the best software and the best services, and they want them integrated, and they want them to be delivered consistently on a global basis. That’s hard to provide… it requires significant investment and significant expertise.”

He continued: “I think Steve Singh’s investment in Direct Travel shows… and he talked
about bringing the portfolio of products together… it shows that having a
software platform like Spotnana, which doesn’t have scale and doesn’t
have services, is not necessarily the winning formula. He said in his
announcement that he wants to be able to bring together the software and
services.”

Abbott also noted that tech-focused TMC Navan, formerly known as TripActions, “started life saying that established TMCs would disappear. Then they realised that they needed to build out credible services and so they started buying multiple legacy TMCs.” That included the acquisition of Reed & Mackay in 2021, when the TMC’s CEO Fred Stratford conceded it might look like an unusual partnership but that “the
magic happens when you bring them [high-touch service and tech] together.”  

The Amex GBT boss said he has been beating the drum for a service and software approach for several years, pointing to its acquisition of KDS – now Neo – in 2016 and Egencia in 2021. More than three-quarters of Amex GBT transactions are now made through digital channels, with 60 per cent of them through its own software, he said.

“Customers’ expectations are going to continue to drive consolidation in the industry because it requires a significant level of investment to deliver on those expectations,” said Abbott. “We’ve integrated the technology and the people, and both our software and services are proven on a global basis. So I think what you’re seeing is the market following our lead.”

• Read the full interview with Paul Abbott here.