CTM Sees Momentum Ahead After 'Underperforming' in Fiscal 2024
CTM experienced underperformance in fiscal year 2024 but saw significant improvement in North America and Australasia, with positive momentum expected for the coming year.
JaneWalter
Corporate Travel Management "underperformed" its expectations in the 2024 fiscal year, but the year also saw a "major turnaround" in both North America and New Zealand/Australia, and the travel management company sees "momentum" moving into the next year, managing director Jamie Pherous said.
For the full fiscal year, which ended June 30, CTM's revenue increased 9 percent year over year to A$716.9 million (US$484.5 million. In the second half of the year, however, total revenue declined 4.1 percent to A$353.2 million (US$238.7 million).
The second half underperformance stemmed largely from activity with the Europe Bridging accommodation contract for asylum seekers, which was below forecast "due to changes in the government policy," according to CTM. The TMC also saw less demand from its humanitarian efforts related to housing for people displaced from Ukraine and Afghanistan, which "tapered off much faster than we anticipated," Pherous said. Ninety percent of families in that program have been resettled into long-term accommodations, he said.
Excluding Europe, total revenue in the second half was up 4.2 percent to A$280.3 million (US$189.2 million).
In North America—while customer activity "lagged" in the first half of the year, and also was a factor in full-year underperformance—there was a rebound after the second quarter, with transactions in the region up 17 percent year over year in the second half overall. The acceleration was most evident in the final quarter, with transactions up 21 percent year over year.
Pherous said a change in organizational structure in the North America has enabled faster onboarding of accounts, and CTM also has "let some accounts go that weren't profitable." American Airline's distribution strategy of removing a large portion of fares from EDIFACT channels, since reversed, was a large part of a A$12 million (US$8.1 million) revenue hit in the region.
CTM reported a "significant" turnaround in the second half of the fiscal year for Australia and New Zealand, with revenue up 11 percent year over year for those six months. The growth stemmed in part from its hotel content engine Sleep Space as well as client wins. That includes the return of some customers lost during the integration of Helloworld, Pherous said.
In Asia, full-year revenue was up 24 percent year over year to A$64.1 million, (US$43.2 million), and CTM reported "strong growth" in corporate travel for the region. "Japan is helping us win regional accounts, and Singapore is delivering record results well beyond pre-Covid levels," Pherous said.
