September 05, 2007

The more than 50-nation GlobalStar Travel Management network of travel management companies has won corporate travel business on a multinational basis and restructured to support more of the same. It also is collaborating internally on a scale that worldwide chairman Peter Klebanow had not seen previously in the group's five-year history. Also president of Ultramar Travel Management in New York, Klebanow spoke this week with The Transnational about the changes and future.

GlobalStar earlier this year announced the appointments of new executive vice presidents Bob Morgan, for operations and administration, and Claire Gray, for sales and marketing. GlobalStar also said worldwide president Martin Metzler would leave the organization. Earlier, GlobalStar announced new regional managers in Asia-Pacific, EMEA, Latin America and North America. What's the rationale behind these changes?

During GlobalStar's first few years, partner recruitment was a major role for the worldwide president as we brought together the network. With that network firmly in place, we at the board level felt that the focus was becoming far more operational in nature. One of the benefits of having Bob and Clare in those roles is [that] they really understand how travel management firms run. Bob formally was a principal at [GlobalStar's U.K. partner] ATP. He has resigned from ATP to work full time for GlobalStar, and I think it shows his confidence in the organization and the way we run, and the opportunities in our reach. Another thing we did was we wanted to make sure there was sufficient regional support, because we do see the regions operating collaboratively and autonomously. A lot of this began with a meeting back in October, when we determined we should hire a full-time resource for Asia-Pacific.

Among GlobalStar's 2007 goals was to "bring higher levels of account control to its corporate clients" and expand on its technology platform. How have those initiatives been going?

One of the reasons we're seeing a lot of success now in networking new business to the organization is that GlobalStar can be very flexible in terms of how we interface with the customer. We like to have a lead agency, generally nearest to the corporation's headquarters, and depending on that corporation's resources, we can pretty much match their structure with our structure. That's part of the reason we see business gravitating somewhat away from the megas now and towards us. We're now able to formalize how we're bringing all our partners in all countries up to speed with regard to their expectations of global account management, where each market has variances in terms of expectations on account management. In developed countries, there is clearly more benchmarking and consultative account management, versus some of the more far-flung places, where account management is really like customer service ... so we have made great effort to share the knowledge and bring partners up to speed on client expectations, whether in terms of service-level agreements or account deliverables. The people who need to be driving this are those who have close contact with customers.

Technology is a very timely subject. For us there are three key components: the DataStar global data consolidation tool powered by Hi-Mark (TRX); our Web-based FareStar software, developed by ATP, which enables our rate desks to see in our partner systems the private and published fares that vary by global distribution system and by local market; and ProfileStar, essentially a profiling system developed by Ultramar that enables real-time profiles in all GDSs. The reason I say this is timely is that, on September 10 and 11, we have about 18 IT folks from our partners around the world coming to a GlobalStar tech summit in New York with the idea that as an organization, we need to have a vision and a roadmap for our technology. About 15 of our partners each has the ability to create technology and make it available to other partners. I wonder how often competing organizations get their IT folks together like that.

How is GlobalStar different from, say, American Express or Carlson Wagonlit Travel?

What I can tell you is we're seeing a lot of business move from the megas. To some degree, it's unprecedented. I think it's really a matter of the fact that today, technology really does allow more moderate-sized TMCs to differentiate the user experience. Technology really levels the playing field. There's a lot of differentiation so that entrepreneurial or innovative TMCs are winning business, and a lot of these firms have global solutions but take a local approach--it's sort of the best of both worlds. More and more firms have cut back in their own travel management infrastructures or are looking for some perspective beyond their own walls, and CFOs and other senior executives increasingly are looking toward TMCs to understand how to enter new markets and how their competitors might be handling policy, or compliance, or technology issues.

How many accounts do GlobalStar members serve in multiple countries?

I'm not armed with numbers, but I can share with you my own experiences. CIT Group, the financial commercial lending organization, was an Amex customer for 10 years. Our partner in Ireland services them in Europe, our partner in Australia services them, and Ultramar is serving them in North America, including Canada. We just won Countrywide Financial, which was a Navigant, and then CWT account for the last six years. They have a pretty significant spend, and they have now gone with GlobalStar in Costa Rica, the United Kingdom and North America. We recently won Macquarie Group, a fast-growing investment bank. Our partner services them in Australia, and our Hong Kong partner serves them. All of this is being replicated throughout the partnership--it's very real.

Do you still have a challenge of brand recognition, just in terms of getting on bidders' lists in the first place?

We get the majority of our leads through referrals. It will still take a bit of time before we get requests for proposals from people who don't know us, so each of our partners brings somewhat of a different niche and sometimes there are parallels. Ultramar has a niche in law, finance and fashion. Our partners in the U.K. are very big in oil and gas--they gave our partner in Kuwait $20 million in business. Twenty million! Our members are not getting into a bid today where there isn't due diligence about the global footprint. It's not a check in the box anymore. They want the pricing now. They want to understand how it works. They want one contract. But yes, you have to walk before you can run. We have participated in some very large bids. The technologies are scalable, and we can clearly serve them, but winning them would be based on some of the personal relationships. Our sweet spot is customers with $20 million to $50 million in global air spend. We fit those firms them very well, we have plenty of people to point to who can provide valuable references, and we can offer solutions and customization.