CTM Sees Momentum Ahead After ‘Underperforming’ in Fiscal 2024

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.

RELATED: 
CTM FY 2024 first-half results