Who would want to set up a business travel agency in these pandemic times? Well, quite a few people, it turns out.
Now LokomoteThe founders, cousins David and Ross Fastuca, are back in the game after selling their platform to and then buying it back Travel port.
The tortuous story began in 2012. Along the way, Ross Fastuca told Skift how the couple may have gotten early with their real-time booking tool and how the company “lost its heart” under Travelport – The global sales company has declined to comment on this statement. However, since operational controls were withdrawn in January, the Fastucas are ready for a fresh start.
To find out how they came to buy back their business with a “Covid discount” – – No information due to a nondisclosure agreement – Fastuca is turning back the clock.
“David and I have been building technology since we were young and have been in business for 25 years,” he said. In 2012 they built a skin on a booking engine for a travel agency in Australia.
It worked well so the two decided to sell this on to other tour operators. Eventually they were introduced to a bank and mining company in Australia that together spent $ 200 million a year on travel.
Over several months, Locomote came up with the concept of understanding their problems and talking to other companies.
“We found that organizations do a lot of different things before actually speaking to a travel agent. There is a whole procurement process and permits. Little did we know why they were still using email, spreadsheets, and PDFs to bring procurement systems together. So we presented them with a system that can solve this problem, ”he said.
At some point Travelport became known.
Defeat Saber and Amadeus
“We knew Travelport would be incentivizing agencies to switch from, say, Saber or Amadeus to Travelport. If we can convince these two big companies to join Travelport, you are paying us an incentive,” said Fastuca.
Travelport laughed at the idea and agreed – thought there was no way the cousins could do it.
But they did it.
The startup with five employees then caught the eye of Gordon Wilson, the then CEO of Travelport.
Up until that point, corporate online booking tools weren’t as established as they are today, and Concur was seen as a key player. So Travelport funded Locomote to build the “front-end” on its process management platform into which modules could be plugged. Fastuca previously said the goal was to find a booking tool to plug in and there were talks with Concur selling to accounting giant SAP, but nothing came off.
Locomote successfully built its interface and in 2014 Travelport took over 49 percent of the company. “In combination with Travelport, we were practically early TripActions,” said Fastuca.
Travelport wanted Locomote to be a rival to Saber’s own booking tool GetThere or Amadeus’ Cytric. It invested around $ 50 million in the product. While the business model was great for Travelport, it was less good for the founders as Travelport was happy to give Locomote to the travel agents to get them on board, Fastuca said.
To lose your heart
In 2016, Travelport bought the remainder of Locomote, with the cousins staying for a two-year handover. They left the company in 2018, by which time Locomote had grown to 120 employees.
After they left, Fastuca said Locomote lost his heart because it had simply become a product within Travelport while he viewed it as a complete entity on its own
“It was swallowed. The entrepreneurial flair has waned, ”he said. You might question the role of the cousins in those two years.
“When we left from 2016 to 2018, we disappeared because that was our job to hand over.” Fastuca said. “Many employees have left. The core platform itself was still pretty good, but they couldn’t turn on that in-house sales machine because they were giving away Locomote. They didn’t see it as a way to make money, it was a price. “
Around the same time, Travelport took its own trip and became a private company in 2019. Some of the assets acquired – including the Australian company eNett – should be disposed of.
Shortly before Covid, in January 2020, Travelport approached the cousins. The pandemic put a brake on a possible sale, but the company was taken back by the Fastucas in July, with operational control being returned in January 2021.
A clean slate
Fastuca believes there has never been a better time to start a business travel agency.
Locomote currently employs around 50 people, including many former employees, and plans to see an increase in line with the recovery of travel, particularly in Asia. “Everyone is on their back wondering how to manage their employees and layoffs. We are waiting for all of these amazing people to come out,” Fastuca said.
He predicts that Locomote’s original premise – creating an open platform that modules can be dragged in – will be more relevant than ever as companies get out of Covid.
Content aggregators such as Travelfusion, Covid Info Tool sherpaand work with the right agencies for fulfillment purposes in the destinations where they want to expand.
“Hopefully we can be a catalyst so that some of these other travel companies and startups can create modules within Locomote to gain exposure or benefit our customers,” said Fastuca.
He said where his rivals may get stuck is their intent to become the “everything and everything” travel for customers and questions their use of the word “platform”.
“For me, it’s a platform where you let other people create, build, and integrate,” he said.
“Facebook is a real platform. The travel industry likes to toss the word platform around without it being legitimate. A website with many buttons that you can use to log into other companies once is not a platform. “
For example, many travel agents are expanding into expense management, but this is not a route Fastuca wants to take, despite citing it Spend as a company he respects.
“A lot of travel companies are moving in the direction of cost and becoming a fintech company. But it’s okay to be a really good travel company, we don’t want to lose our focus, ”he said.
He believes that within five years Locomote will be among the largest agencies in the world alongside TripActions and TravelPerk, with “traditional companies” like CWT, BCD Travel and American Express Global Business Travel falling by the wayside.
“The big boys come with a lot of legacy. You are trying to put different systems together to “Frankenstein”. They have 10 different legacy systems that they want to put together, ”said Fastuca.
However, Locomote’s challenge will be to differentiate itself from what is becoming a crowded marketplace. In 2016 Skift described Locomote as a “seedling”, What made it unique was the fact that business travelers could communicate with it in real time, and it had a partnership with Allianz to sell travel insurance.
What is unique about the company today?
Fastuca said the track record is his calling card with eight years of software development and scalability. “We know we can handle a $ 100 million company from the start. We don’t have to build it as a corporate version,” he said, perhaps referring to a rival Announcement of TripActions last year An Enterprise Edition will be created.
Fastuca added that Locomote worked with Deloitte and Red Bull and won the account to manage the trip for the HR platform Further up from TripActions.
Melbourne-based Locomote may have the benefit of using travel bubbles or corridor bubbles between other countries and Covid-free Australia. But while it represents a new breed of corporate travel agency, others will be waiting on the sidelines that have even less legacy than Locomote.
“We’re talking about creating this Australian ecosystem of cool travel companies that are reviving,” said Fastuca.
These are likely the companies Locomote needs to watch closely right now.
See full article
Photo Credit: Cousins David Fastuca (left) and Ross Fastuca founded Locomote in 2012. Lokomote
