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Mega agency melding: M&As buttress multinat''l mgmt.

Article Excerpt
Fewer vendors can mean higher prices and weaker service, but not all buyers are concerned about the announced acquisition of Maritz Corporate Travel by Carlson Wagonlit Travel and the alignment of Navigant International and TQ3. Combined with last fall's American Express-Rosenbluth deal, these moves shave from six to four the number of U.S. mega agencies, but competition for North American travel management should remain intense.

The deals (see story, right) reflect the ever more global scope of corporate travel management. By narrowing the field of megas with significant multinational capabilities from five to four, these vendors may be boosting their pricing power over the long term, said some buyers and consultants. However, agency consortia and anticipated multinational competition from global distribution system companies and online-originating agencies (BTN, March 15) may help hold prices in check.

"It would have been a lot worse if Amex was the acquirer, because they would be getting too big," said Maritz Corporate Travel client New York Life corporate vice president Ted Kohnen. "There will continue to be competition, and other options like outsourcing and e-booking will counterbalance to keep fees down."

Two other MCT clients agreed, but did not want to reveal their names amid the onset of...

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