Sources:U.S. Travel Association, Travel Facts & Statistics, updated January 2013
"Managing Emerging Markets: Latin America" Presentation from The BTN Group & RADIUS
Managing Emerging Markets: Latin America Sponsored byProduced by
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Session Agenda • IntroductionModerator • Audience Stats • Marsh & McLennan’s Tact-Greg Wilczek, Travel Manager, Americas, Marsh & McLennan • Walmart’s Approach-Roberto Rodriguez González, Travel Services Procurement Executive, Walmart Mexico and CentroamericaMary Ann McNulty • Market Maturity, OtherDirectorContent Solutions Approaches–Maura Allen, Vice President, Latin America, RADIUS • Live Q&A – Enter Your Questions!
Audience Stats Air Spend Less than $5MDEMOGRAPHICS 33% 32% $5M to $9.9M20% outside US $10M to $24.9M80% US $25M to $50M More than $50M 10% 12% 13% Source: BTN Group/RADIUS webinar registration data, March-April 2013
Audience Stats Latam Consolidation Efforts4 OR FEWER COUNTRIES53% of “Considering” Consolidated 2+50% of “Last Year” Years Ago39% of “This Year” 16% Introduced Last37% of “2+ Years Ago” Year 37% Considering6 OR MORE COUNTRIES Planned This Year63% of “2+ Years Ago” 32%61% of “This Year”50% of “Last Year” 15%47% of “Considering Source: BTN Group/RADIUS webinar registration data, March-April 2013
Audience Stats Top 5 Concerns 4% 3% Better understanding 12% cultural issues Policy compliance Use of technology 18% 63% Payment Supplier selection/managementSource: BTN Group/RADIUS webinar registration data, March-April 2013
Today’s Panelists…Greg Wilczek Roberto Rodriguez González Maura AllenTravel Manager, Americas Travel Services Procurement Vice President, Latin America Executive ManagerMarsh & McLennan RADIUS Walmart Mexico and Centroamerica
Marsh & McLennan OverviewKey Stats Revenues About Marsh & McLennan Companies$11.9B Marsh & McLennan Companies (NYSE: MMC) is a global Fortune 500 rank team of professional services companies offering clients advice and solutions in the areas of risk, strategy, and#231 human capital. Our brands include: Employees • Risk and insurance broking: Marsh and Guy53,000 in more than Carpenter100 countries • Consulting: Mercer and Oliver Wyman
MMC Travel Program Highlights● Global TMC: BCD Travel• Booking Tools: Best fit per region• Reporting Line: Global Sourcing & Procurement, reportingto CFO• BTN 100
MMC’s Latin America Consolidation Path to consolidation MMC’s Presence in Latin America Scope of Consolidation Our Process: Winning Formula Through Trial & Error Challenges We Faced Lessons Learned Observations and Generalizations Implemented To be implemented
Roberto Rodriguez GonzálezWALMART’S APPROACH:TAP LOCAL EXPERTISE
Who Decides Travel In LatAm?Source: GBTA-Outback Consulting June 2012 survey of 51 companies from Mexico, Argentina, Costa Rica and Colombia
Supplier Relationship Top Priorities 2013Source: GBTA-Outback Consulting June 2012 survey of 51 companies from Mexico, Argentina, Costa Rica and Colombia
Walmart Mexico, Centroamerica OverviewKEY STATS 6 countriesMexico, Costa • Global travel program holds Corporate TravelRica, Guatemala, Ho Department (CTD) designation from ARCnduras, Nicara-gua, El Salvador • Started consolidation with Centroamerica two years ago Number oftravelers • Started consolidation with online booking tool5,000+ and supplier negotiations--where country reps lead negotiations, then communicate globally Air & Hotel SpendUS$25M • Policy and payments are local issues
Challenges And SuccessesCONSOLIDATION • Biggest challenges: • Different maturity of markets 6 countries • Cost of technology vs. human resources costsMexico, Costa • Sometimes, HO understanding of the marketsRica, Guatemala, Honduras, Nicara- • How did we manage those? Try harder, workgua, El Salvador together with HO Supplier Strategy • Main success:Negotiate • Secure understanding and support from HOlocally, communicat • Maintain that support with numbers ande globally savings
Regional Business Travel Spend By Country Country Business Travel % of region % of region % of region Spend 2011 – 2000 2011 2016We always hear about USD in billionsBrazil – here’s a fullerregional picture Brazil $ 27,553 53.4% 60.6% 63.8% Mexico $ 6,661 Not included w/Latin America• US 2011 business Colombia $ 3,877 7.6 % 8.5% 8.0% travel $251B Venezuela $ 2,976 7.6% 6.5% 6.5%• Global 2011 Chile $ 2,810 5.9% 6.2% 5.5% business travel Peru $ 2,767 5.2% 6.1% 5.2% $1,025B. Argentina $ 2,501 11.9% 5.5% 5.0%• Including Other $ 3,020 8.4% 6.6% 5.9% Mexico, LatAm LatAm Total $ 45,504 B 100 % 100 % 100 % (without Mexico) share about 5% of global …and * GBTA BTI™ Outlook – Annual Global Report & Forecast 2012 by GBTA growing Foundation.
Brazil Dominates – A Closer LookBrazilian Business Travel ForecastGBTA BTI™ Outlook – Brazil – Fall 2012Business 2009 2010 2011 2012f 2013fTravelSpending(in mils ofcurrent $US)Brazil $16,056.8 $18,369.0 $22,136.0 $24,003.3 $26,847.8Domestic% change 14.4% 20.5% 8.4% 11.9%Brazil Int’l $ 3,758.7 $ 5,124.8 $5,417.3 $6,125.1 $7,075.1Outbound% change 36.3% 5.7% 13.1% 15.5%Total $ 19,815.5 $ 23,493.8 $27,553.4 $30,128.5 $33,922.8% change 18.6% 17.3% 9.3% 12.6%
Market MaturityCONSOLIDATION FOCUS • Plenty of room for growth and education in travel management and travel-related procurement.We see most activityfrom clients seeking • Brazil - many professional travel managers • Argentina and Mexico – some at largerconsolidation in this companiesorder: • Beyond these countries, and even within, finance, HR and executive assistants• Brazil often tasked with travel manager or arranger• Mexico roles• Argentina• Colombia • For successful first-time program• Chile consolidation, dig to find out who your responsible parties are build a regional team.• Peru• Central America • GBTA and Brazilian association ALAGEV both growing regionally, intent to educate and professionalize.
Understanding LatAm Practices• Travel Policy: Common desire to maximize savings.• Service expectations “tropicalized”: more face-to- face, onsites (called inplants) still exist, VIP treatment at more levels, e.g. airport services.• Strong value placed on personal relationships = reluctance to change long-term local partnerships. Regional travel centers are a hard sell in a diverse region.
Online Booking In LatAm• Mature in Brazil through locally-grown solutions built to deal with Brazil’s dramatically fragmented content.• Evolving Fast in Mexico, Colombia (large domestic markets) and Chile. Earlier stages elsewhere.• Global OBTs entering or growing their market footprints; GDS-based have more share now because they can support agencies locally on first-time OBT integration and fulfillment.
Form of Payment In LatAm• Cultural reluctance of companies to provide employees with corporate cards.• Air mostly bought with virtual/ghost cards/BTA accounts.• Many mid-sized clients still expect agency to offer credit, serious TMCs no longer do this. Weekly BSP reporting.• Card vendors now coming to market with single-trip-use virtual cards to combat these issues.• Find out how your Latin America entities pay for travel now, and work to upgrade if needed.
Hotel Programs and Prepayment• Issuing your travelers corporate cards means enabling greater support of your globally negotiated hotel program.• Why? Travelers without cards expect company to prepay their hotel stay.• Agencies often prepay hotel stays through wholesalers rather than book hotel segments in GDS.• In some markets, banks offer BTA-style hotel ghost cards for agencies to prepay stays for a company
Understand Culture, PoliticsCULTURE AND POLITICS• Generally not culturally appropriate to expect travelers to use own personal cards, credit for business expenses. See graph for why. Also, interest rates high.• With currency controls in Venezuela, and increasingly Argentina, governments impose limits on traveler expenditures outside borders. Argentina now surcharges 20% on purchases made abroad. Source: GBTA BTI™ Outlook – Brazil 2012
Recommendations• Research and communication are key in any plan to consolidate. Take advantage of your global resources.• Sell the global benefits of consolidation for the good of the company, but also take advantage of local negotiations.• One size does not fit all! Be open to consider local tools - payment, OBTs – tried and tested in the local markets.• Look for high-quality partners who can support you through the process and help you meet your objectives.
Thank You From RADIUSRADIUS designs & delivers customtravel management programs for multinational companies Global data consolidation from RADIUS Local service from the RADIUS network of TMCs in 3,300 locations across 80 countries To learn more, visit www.radiustravel.com; Click Contact Us tab to get in touch
Live Q&A – Enter QuestionsGreg Wilczek Roberto Rodriguez González Maura AllenTravel Manager, Americas Travel Services Procurement Vice President, Latin America Executive Manager Radius TravelMarsh & McLennan Walmart Mexico and Centroamerica
Thank You for attending! Visit RADIUS at www.radiustravel.com The archive of this webinar will be available April 10 at http://www.businesstravelnews.com/Webinars/ Sponsored byProduced by