The state of the industry with Rossana Martin: Q3

Each quarter, we talk to a BCD senior leader about the state of the travel industry, discuss what they're hearing and illustrate how BCD is meeting client needs. This quarter, we welcome back Rossana Martin, Senior Vice President of Global Sales, as she discusses everything from regional recovery, BCD's global footprint and investments, current client needs and offers her advice on how travel programs can determine the state of their own program. 

Learn more by visiting https://www.bcdtravel.com or https://www.linkedin.com/company/bcd-travel/

Transcript

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Miriam  00:00

Well, I mean Michigan Lakehouse culture is, it is sort of like being a bunk in a house and then you spend your entire day on the lake. 

Rossana  00:09

Yeah. Or you're outside, right? 

Miriam  00:11

You're outside running around. Yeah, like a crazy kid growing up. And all you really need is dinner and a bunk bed.

Rossana  00:18

You know, they want their s'mores every night. But it's, these kids. They go down. They're like falling asleep. 

Miriam  00:25

Yeah, with s'mores stuck to their face. A little bit like me on a business trip. It's a good thing. We don't close our business dinners with s'mores around a fire because we'd all be in our hotel room beds in some Marriott with marshmallows stuck to our face.

Intro  00:43

Welcome to Connections with BCD Travel, an ongoing conversation about the modern day travel program, the impact of technology in digitization, and how travel buyers can take control and drive change. Each episode leaves you with practical actionable advice and solutions to support a variety of program needs. Let's start connecting.

Chad  01:07

Welcome back to Connections everyone. I'm Chad Lemon.

Miriam  01:10

And I'm Miriam Moscovici. Be sure to review this podcast wherever you're listening.

Chad  01:13

So a few months ago, we have Rossana Martin on the podcast to give us a state of the industry update. And that episode was so wildly downloaded, we decided to invite her back for another quarterly state of the industry update.

Miriam  01:28

Yeah, welcome back to connections, Rossana.

Rossana  01:30

Thank you. Hello, everyone. And thanks for having me back. I'm really excited.

Miriam  01:34

We're so excited to have you back. And I think on this episode, we're really going to grill you on what's been going on since your last state of the industry update. So I hope you're ready.

Rossana  01:43

I'm always ready, Miriam, let's do it.

Chad  01:52

Rossana, our first question that has to be what is the state of the industry? What are the trends and topics that we need to know about?

Rossana  01:59

Well, first, Chad, I think let's tackle 2019 volumes head on, I can say we're effectively done with comparing 2019 volumes and old bids, right. I really encourage companies who aren't doing this to consider it. Most companies are now gauging their volumes post pandemic, and some companies are seeing more travel in 2023. And some are hovering anywhere from 60 to 80%. While some of it is definitely sector specific, for example, entertainment, or life sciences, entertainment may change due to the writer strike, however, but we also have some manufacturing clients that are actually higher than their 2019 volumes due to various factors. Some of them are acquisitions, new client wins that they have, and some merger activity as well. The second thing I'd like to talk about our regional levels. So looking at capacity, if you have not had a chance to listen to Jonathan Kao's podcast, I think it's something that you should listen to. It's fantastic. And I've really learned a lot from that podcast. I can tell you, capacity is far from recovery in most markets in Asia. But I can tell you in Europe, recovery is back on track after a brief pause in the first quarter this year. If you look at LATAM and North America, airline recovery has definitely picked up momentum. And we're seeing strong airline performances at most airlines in both of those regions. In the Middle East and Africa, for example, capacity is now above 2019 levels. And then I think that there is a greater focus that we're seeing among our clients and prospects with reducing friction. One example of that is really taking the traveler friction point out of guest travel management. This has been a long, you know, issue for companies to try to manage through this. So whether they're candidates or HCP travelers that are coming in for life sciences. So they're looking for an automated way to manage guest travel. And we actually have that today, through BCD Invite. And BCD Invite is great. It's very flexible. Profiles can be created in real time, they sync with the online booking tool, and it doesn't matter what your GDS is or your market that you're sitting in. It's secure. So you can be assured that there is no issue from a security management perspective. And it's digital. So trip request details can be managed electronically through that tool. I think another area that we're seeing is in payment, right? There's a lot of friction in the payment process and travel and I think that's moving up to closer on the top of the list. They want seamless payment in expense management, not just for travelers, but they also want it for their travel stakeholders and their finance teams alike. And so we have a tool or our solution called BCD Pay that offers digital invoice management, virtual automated reconciliation and payment automation. And we're looking to do some future enhancements there as well. So spend management insights, which is coming in the third quarter this year payment manager, which assures that the right form of payment is applied per customer policy and mobile wallet, so that's integrated payment for on-trip purchases, which that is forthcoming no launch date yet. But we're also looking at data integration and API's for expense tools and other systems with pay. I would say fourth, the industry overall is healthy, right? I think corporate travel is booming. We're seeing more positive signs of recovery since our last podcast, again, we talk about there's those little regional nuances that are still happening. But overall, we're seeing, you know, just an uptick in general. And I think lastly, in this area, I just want to stress that BCD is strong, we're thriving, and we're trending ahead of all of our goals and targets. And I think that's important not only for customers, but suppliers and prospects. We made significant profit again in 2022. And we expect results to be close to our pre COVID levels in 2023. We've also made some significant headroom in our liquidity position and are back to positive cash flow. So this really allows us to be able to make targeted investments, and service delivery and technology.

Miriam  06:35

I'm not surprised to hear you talk about payment and BCD Invite, we've recently done some podcasts on those topics and those are really important to our listeners. So speaking of, can you give us a quick rundown of our global footprint? And by that I mean, what are some exciting things that we're doing that play into that strength and health that you just mentioned?

Rossana  06:54

So BCD, you know, we're back to 13,000 team members that we have on the team, you know, we're servicing clients of 170 plus countries. And we do have the industry's most consistent client retention rate. And this has been consistent over the past 10 plus years. So I think that's, that's something that's important to mention. Our CEO also was, he transitioned, or passed CEO John Snyder, his responsibilities to his longtime friend and colleague, Stephen Baars, who is our former BCD CFO, and he was the BORON CEO. And he returned to the company. And what's good is he knows BCD, he knows us, right? He's been here before, but he's really tasked with a vision, to build on the success that we've had, and grow the company and the culture that really ensures that we're enduring for the next, next generation. There are a couple of other things that I can share with you, too, that are really exciting. So earlier this year, we opened an office in Sri Lanka. It's in Colombo, and it's a wholly owned Asia Pacific service center, or, you know, we love our acronyms, the ASC. Can never get away from those in travel. But this center is always on. They provide high quality direct to client service for companies in Australia, Hong Kong and Singapore. And they have close to 200 full-time employees, highly skilled agents, and they're also able to support travelers from around the world. So the frontline agents there can service during after hours for travelers and other regions. On the DE&I front, some really exciting things I want to share there. You know, we continue to enhance the awareness of our talent acquisition team. We're hiring to ensure we have an inclusive hiring process, and we're mitigating bias in that process. And I think, you know, there are a lot of companies in the travel space that are really pulling back on their stated DE&I commitments, and we continue to press forward. I think that's extremely important. That commitment is there, taking care of our people. That's something that's a continued focus for us. We're also looking to create more equitable practices and policies within the workforce, and also looking to expand partnerships and BCD marketplace to help address the unique needs of our customers when they're trying to really ensure that they're hitting their DE&I goals. I can tell you from an investment and tech perspective, we're continuing to invest 30 to 40% of our EBITA back into the company. This includes innovation investments, and tech. And Miriam I'm sure you're aware of being in innovation but our three focus areas really are enhancing the shopping, booking and service experience for profiled, and non-profile travelers. Also investing in the infrastructure as well of multi source data. This will help travel stakeholders to be able to action, the right decisions, having the right data to make those right decisions, and power internal and external platforms. And then again, looking at simplifying the end-to-end spend management process for everyone. Two more things I'll share, so GetGoing, we announced in July, the launch of GetGoing, which is our self service tool for small to midsize businesses. And AI. So we're continuing to invest in AI. And I think we all know AI can be good. And it can be bad. And I think when you look at transformational innovation, you really have to look at everything you have to understand, be able to assess and test practical uses before you just dive in. It's not something that you can just do, right. I think it can be used, like I said, for good and bad. So I think the travel industry, certainly one of the most impactful use cases for AI, and is already widely adopted in the leisure space, which we see on a regular basis. And here at BCD, we've been doing it for a while. So matching transactions and credit card data with BCD Pay, room and bed type matching within TripSource and AgentSource. Those are booking platforms within BCD. And then mapping traffic and shopping patterns in price assurance technology. So our hotel and air price assurance technology as well.

Chad  11:31

Rossana, we both just returned from GBTA in Dallas. What did you hear, specifically, from clients and prospects?

Rossana  11:39

I would tell you the three biggest things I heard, the first is sustainability. And it continues to mean something different to everyone and every single company. Everyone has a very unique sustainability journey. I think that's something that I took away. And that's why it's important for us to be able to talk to customers and prospects about what are their goals? What are things that they're doing well, where are there gaps that they'd like to close in the program? And that's a conversation that should start very early. And then people raved about the various WINiT sessions. This is the first year where I felt like there was a true track for WINiT. I loved the truly honest conversation. And also her raise about leveling up. Mentoring, WINiT, elevating women's voices workshop. One of the really good sessions that I attended, and I attended it by accident, I was going to attend a different session, and I plugged this one into my app. And it was great. It was unexpected lessons that we've learned from travel data. That session ended up being standing remotely. And I think the panelists really brought real solutions to help make sense of data. So it goes back to you know, one of the focus areas where we're really looking at helping clients be able to make sense of the endless possibilities within their program. That was huge, and being able to listen to people from Advito, and customers really specifically talk about what they learned and how they acted on it. And the one thing I noticed were people were taking a ton of notes, the lady next to me took four pages of notes in that session,

Miriam  13:22

Rossana we all know it's budget season for many clients and companies. What are they focusing on? What are y'all talking about?

Rossana  13:28

Alright, so what I think clients are really looking to do is to help make sense of all that data, they're looking at ways to combine travel, expense and credit card data, really bringing it all together to help make decisions a lot easier and make sure that they're acting on the right things within their travel program. I also think there's a different focus on hubs. So for example, in Europe, or hubs have been around for a while and widely adopted by most travel programs today, I would say some of the more mature, we're looking at a lot more with hubbing programs in Asia or in Latin America. And some customers are talking more about that follow the sun, where you have an always on service that they're connected by regions. So that's sort of exciting, some additional things that are happening in that space.

Miriam  14:20

In a general sense, would you say that travel programs are looking to hold their travel budgets steady? Or do they anticipate an increase in spending next year or are they still trying to decrease their spending?

Rossana  14:31

I'm seeing a mix. So I talked to one prospect recently actually at GBTA. And they said they have budgeted for 140% of their 2022 volume. They're really growing. And in most industries corporate travel brings the return on investment. I think mining is probably the only one where you don't see that same return on investment. So they know they're going to get that investment back.

Chad  14:57

Rossana, I want to circle back to that kind of state of BCD Travel, you mentioned at the top of the show, traditionally, we finish strong in Q4, how are things tracking this year? Anything you can share with us?

Rossana  15:10

Well, I'd love to tell you. This is some great news. We're actually trending very high from a sales perspective. Historically, we see that strong fourth quarter, right? We always say our sales teams, you know, we're a fourth quarter sales team, right. But this year, we saw record sales in the first and second quarter of this year. That's a great testament to how well we're doing. Some of that is new business. Some of that is expansion business from our retention volumes. So again, I think that speaks volumes to the great job that our teams are doing on a global basis. And our retention rate continues to be very high.

Chad  15:51

Rossana, you just mentioned our retention rate and we're known for having one of the best if not the best retention rate for clients. So what tips do you have for our listeners as they try to determine their state of the industry for their own programs? Because that plays a huge part in the partnership between a TMC and the travel program.

Rossana  16:11

Absolutely. And I think when they're looking at their programs, they have to make sure that they're looking at their program holistically. They're looking at what their program is doing today, looking at it midterm and also having a long term plan. And I think that you cannot have a stagnant program. And you should be able to ask for certain things from your current provider. There's things that are table stakes, that you shouldn't have to try to bandaid, you shouldn't have to, you know, put a process in place to fix something that isn't working, you really have to be able to take a look at your program. And if you're not getting what you need, you need to look elsewhere. I think that's the most important thing. The marketplace has changed significantly. And now is the time to really take a look at your program. 

Miriam  16:58

Rossana, as always, this has been an excellent update. So in one sentence, can you wrap up this session on the state of the industry?

Rossana  17:06

Yes, we are past 2019 thankfully. It's time to look at your programs in a much different way and modernize your program for the future.

Chad  17:20

Well, we had a great discussion as usual Rossana, but let's do a quick connect. Okay, first, we are all in the United States. And we're just about to close out the summer months. So favorite summer moment from this year?

Rossana  17:35

My favorite summer moment from this year was having all of my great nieces and great nephews together with my granddaughter sitting on the beach, building sandcastles, which actually is a lot harder than it looks. And I can tell you that it's a core memory from what I understood. My one nephew said that core memory these kids will remember for the rest of their life.

Chad  18:00

That's adorable. I love that.

Miriam  18:04

I made a core memory this summer. Denver's got a program they do called Viva Denver and they closed down all the streets downtown for a Sunday, four Sundays in the summer and you go down there and you ride your bikes and you use electric scooters and electric bikes. And so I rode an electric scooter up and down downtown Denver, and I smiled so hard I caught bugs in my teeth, right? No helmet. But it was just so fun. I'd never written one of those electric scooters before. And now I'm looking for them all the time. So that was fun.

Chad  18:39

Not a core moment and a side memory. Dangerous for sure. The first time I ever rode one Miriam I crashed into a parked car. So please be careful. My favorite summer memory, I'm sure you're both tired of hearing me talk about it. I moved to the beach to be happy and see palm trees and oceans every day. So that hands down was my favorite memory. Okay, when you go to a coffee shop, what is your go-to order?

Rossana  19:08

My go-to order is a soy chai tea latte or an almond Chai tea latte, hot.

Miriam  19:16

Okay. Mine would have to be a...

Chad  19:18

Miriam, you're not even a coffee drinker, are you? 

Miriam  19:21

Oh, I'm a coffee drinker.  Oh, I thought you were a tea girly?  Well, I mean that too. But no, I have a whole I have a very, very complex coffee situation in my life. We'll get into that. At another time. My order at a coffee shop because I can't make it at home would be a cortada.

Chad  19:39

Okay, alright. I like to keep it pretty simple. I'm a like tripleshot espresso over ice. 

Miriam  19:45

That's diesel. 

Chad  19:47

I gotta get perked up.

Rossana  19:49

See, I could see that for Chad. I can absolutely see that.

Chad  19:53

Diesel fuel. Okay, last question, Rossana this one's just for you. We've just started asking everyone at this point and I forget if we asked you this on the last one I don't think we did but, "When you travel: window or aisle seat?"

Rossana  20:08

I always sit aisle seat. For a short person I do take up a lot of room and I need that extra. I had a customer tell me recently at an in-person meeting which is very refreshing they said "Wow for a little person you take up a lot of room," and I do because I have a whole methodical process of how I set myself up so whether I'm in a meeting room or I'm on a plane I have to be a certain way.

Chad  20:36

Yeah that's a valid, everyone we asked you know so far have all said aisle seats and I think you're the first one that came out with logical response. No, I mean, everyone else was logical too they want to get up and move around. Yours was just comical.

Rossana  20:53

Funny, it's but it's the truth.

Chad  21:02

Rossana, as always, thank you so much for this quarterly update.

Miriam  21:06

Yeah. Rossana, I'm so glad you joined us and I hope we'll see you again next quarter.

Rossana  21:09

Thanks for having me. I really enjoy our time together. As per usual,

Chad  21:13

If you're a travel buyer or frequent business traveler or just someone who likes hearing about the state of the industry, be sure to download and review the Connections with BCD Travel podcast to stay up to date with new releases and listen to your favorite episodes.

Outro  21:28

Thank you for connecting with us. BCD Travel helps customers travel smart and achieve more. We make this happen in over 100 countries with a global client retention rate of 97% the highest in the industry. Learn more about the information you heard today and what BCD Travel can do for you by visiting BCDtravel.com/podcast.