A broad offering

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Flight Centre are one of South Africa’s big players in the corporate travel space, offering the market three brands from which to choose and find a fit. Managing Director Andrew Stark heads this team and hosted editor Dylan Rogers for a coffee at the group’s Johannesburg office to talk all things Flight Centre-related.

No surprise to hear that Andrew Starks shares the sentiments of many of his industry colleagues. Spend is down and the squeeze is on, as corporates continue to look for more from their travel policy and service provider, often with less money.

“Because they’re paying for the service, there’s far more pressure around service,” says Stark. “So, it’s ‘what am I getting, what are your efficiency gains, how can I save money, how can I travel more for less?’ etc. There’s always pressure and we’re a good example – we’re a travel company and we want to drop our travel spend. So, if we’re doing that, what are our corporate customers doing?”

All of which makes the travel management space in South Africa a tough place to be, even though opportunity does exist.

“The market we’re in is interesting, because it’s not growing and in some instances is going backwards,” says Stark. “It’s dog eat dog in the TMC space and we’re seeing some consolidation, with companies buying out other companies. We all ask the same question each year: ‘how do we keep growing?’ and the only way is through some decent acquisitions.”

The impact of this tough environment is also being felt at traveller level, with corporates taking a much closer look at those travel policies and seeing where they shave a cent or two.

“Something like mode of transport in destination is quite interesting,” says Stark. “The use of Uber is very popular, there’s a lot less scheduled transfers, and public transport is often mandated in travel policy, as is only wi-fi hotspots for mobile devices. Corporates are still travelling and need to do business, but they are looking for the smaller wins.”

This time seven years ago, Flight Centre had zero presence in the South African corporate travel space, with an offering that was one hundred percent focused on the leisure market. But they sought to change that by initially going after a market they believed wasn’t being properly serviced.

“We were the new kids on the block with Corporate Traveller and we were playing in what I call the ‘SSMME’” space,” says Stark. “We went after those small businesses that no-one looked after, that weren’t as sexy as a big corporate, where you know that your margins are squeezed.”

Fast-forward to 2017 and Flight Centre is now a major player in the South African corporate travel space, with three brands offering solutions to this market. According to Stark, Corporate Traveller and Flight Centre Business Travel, combined, are worth about 1.8 billion rand in sales, whilst the projections for FCM Travel – now that it has the Anglo American account – for this year are in the region of 800 million rand.

“We stumbled across the FCBT brand,” says Stark. “FCBT evolved from the Flight Centre retail environment, where consultants had corporate clients in the leisure space. The best way to describe it is: a customer who started with Flight Centre stays with the company through their corporate evolution. Corporate Traveller is a boutique corporate travel management company that focuses on the SSMME market, whilst FCM is your traditional TMC model and an international brand.”

FCM also gives Flight Centre an established presence on the African continent, thanks to an extensive partner network, and it’s here that I want to pick Stark’s brain. What, for him, are the major travel issues on the African continent?

“We don’t have enough airlift or product choice, so it’s a bit of a monopoly, because there isn’t that competition,” he says.

And don’t get him started on ‘open skies’.

“As a South African travel community, I really feel we need to lobby harder than we’ve ever done before,” says Stark. “Where there’s the most airlift, economies are booming. It can stimulate growth and job creation, it would be good for the travelling public, and it would be good for Africa. It would also solve the issue of what I believe Africa lacks, and that’s competition. It just requires some robust dialogue.”

Easier said than done, but the sentiment is there.

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