 BIZ TALK CEO INTERVIEW:
David Fraser – Executive General Manager Greater China FCM Travel Solutions
Hong Kong-based David Fraser is Executive General Manager for Greater China for FCm Travel Solutions, an Asia-Pacific based global travel management company (TMC). Previously FCm’s Commercial Director for Greater China and Commercial Manager for Asia, he has more than five years’ travel industry, financial and commercial experience with FCm and its Australasian-based parent company, Flight Centre Ltd.
FCm’s Greater China network includes offices in Hong Kong, Beijing, Shanghai and Guangzhou.
How does China rate as a growth market for FCm, both regionally and globally?
DF: Our experience of growth in China has been very healthy, with significant double-digit growth annually. But this is off a small base, and is not out of the ordinary for expanding businesses in other industries here. For China and Asia, we do not simply target growth that supports global client contracts – we are here to win local business. This is maybe where we are different from other TMCs. We have strong decision-making autonomy and since we signed the joint venture a little over three years ago, we have laid very strong foundations for our business in China. Now we are moving to the next phase of growth.
What are the key challenges for TMCs operating in China, and how do these compare with elsewhere in Asia?
DF: Generally, all countries have their challenges, so we are no more perplexed here than anywhere else. But there are certain challenges in this marketplace, particularly related to staffing. The labour market for services industries is very competitive in China, with hotels, banks and travel companies among those recruiting from the same talent pool. But it is an area where we believe we are doing well. Our China staff has grown about 15 per cent each year. The composition of our staff is slightly different, however. Whereas globally, we’d probably have around 70 per cent of our staff in selling roles and 30 per cent in admin support, here the balance is about 50-50. But we will improve this as we benefit from economies of scale.
Another challenge is in price competition. There are still a number of competitors trying to buy market share on price alone. We are still educating the market about the added value of travel management services and a coordinated travel programme, compared to the sales-based approach of a traditional travel agency.
At present, our business in China is restricted to three cities – Beijing, Shanghai and Guangzhou – but the regulations will change. We have visions in the medium term of opening up in other cities, but that will depend purely on customer needs. Our structure will ultimately be the one that best serves our clients, but we do believe there is a lot of further growth potential in these three main cities.
And what are the key challenges for your clients in China?
DF: As the service industry evolves in China, this is the first time that many businesses have centralised their business travel procurement and spend, and the first time they have had a company travel programme. It is, therefore, a huge change management process. We work very closely with clients to help them plan and implement a considered travel policy, and to move away from a reliance on low-cost alternatives. We stress the value of consolidating travel services and spend, and the extra support services that we can provide.
For next year, there will also be some general market challenges. There is continued strong demand for air tickets and hotel room nights, which puts upward pressure on prices and makes availability difficult. We are working with clients to identify opportunities for savings and also to change booking behaviour, so companies get used to booking further out.
How are corporate travel patterns changing in China, and how do you see these evolving?
DF: We are going to see continued growth in corporate travel in China, and it is up to travel management companies to prove their value to corporates in terms of consolidation of travel spend, executing a travel policy, reporting and analysing travel patterns, traveller tracking and security and the all-round benefits of a managed company travel programme.
While there are a several foreign TMCs operating in China now, we do expect a lot of local agencies to provide more corporate services. Online travel is a challenge, too, though the technology in China still makes that difficult. Even the top online travel players still fulfill most of their payments offline here. There are still knock-on effects from regulations in other industries, particularly in terms of banking, financial services and credit card payment servicing. I think in China there will be increased take-up of on online travel, but it is not likely to create the death of retail or corporate travel management. Online is good for point-to-point travel, but not for managing complex corporate travel programmes.
How would you compare the corporate travel markets in India and China?
DF: India has a very large and successful travel industry, and it is experiencing a lot of growth. In that respect, the two markets are similar. But India and China are at very different stages of their evolution, especially in terms of travel technology. There are similar challenges in terms of staffing. It’s very competitive in India to get staff now, given all the call centres set up there. For us, the corporate travel market in India is centred around 15-20 cities, mostly where the new IT and business hubs are located. India doesn’t actually sit in our Asia company structure, it’s grouped as part of India/Middle East – and we’ve recently added a new Dubai office, which is another fast-growing corporate travel market.
FCm has created travel industry learning and development programmes for employees. Can you tell us more?
DF: We are essentially a people business; our people are our assets. So the added value we deliver very much depends on our customer service. We’ve always had a strong programme of general classroom-style training and on-the-job development, but in the last year we have rolled out online learning to supplement the other methods. The benefit is that the online modules can be self-paced, and studied at suitable times for each member of staff – such as after work or during lunch time. There are two modules per month, and we provide presentations and study notes in advance. A key part of each module is a points system, whereby our consultants can earn points along the way and redeem them for prizes and rewards. This adds an incentive to complete each module in an accurate and timely manner.
For mor information abaout FCm please visit: www.fcmtravel.com
Last update : Tuesday, 27 November 2007
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