BIDTRAVEL: Diversification & Development Strategy Paying Off for BIDTravel

Diversification of the product/service portfolio has never been more important for BIDTravel. Part of the wider Bidvest group of companies, BIDTravel offers corporate travel management, leisure travel services, and a range of associated offerings that feed into the wider travel and tourism industry.

The company is home to nine recognised brands, each an expert in its field. Simply, if you are a large multinational mining firm, sending many employees to projects overseas each year, or you are an individual looking for an authentic safari lodge getaway, BIDTravel has a solution in its portfolio.

In 2022, the company was emerging from the Covid-19 pandemic after a bruising. CEO Lidia Folli told Enterprise Africa of the company’s successful strategy to survive. In ’23, the BIDTravel brand was enjoying a buoyant period as demand for travel skyrocketed with restrictions lifted in full. At the start of 2024, Folli explained that the company was adjusting as new trends began to take hold of the market.

Today, CFO Vivian van Wyk explains that the BIDTravel proposition is very attractive, and by diversifying across different aspects in the industry, the organisation has positioned itself perfectly for long-term growth and sustainability, mitigating against seasonal fluctuations in demand.

“We have seen good activity across the board and the corporate travel businesses – Rennies, CWT, and Travel Connections – have seen a steady business flow, but not at the increased levels we were seeing previously,” he details.

“There has been economic pressure globally and locally, and we find that as soon as there is any kind of spending restraint travel is the first expense line that gets affected. For some of our global and listed companies, we have seen some contraction, but we are also seeing medium-sized entities picking up volume. There has been a substitution in business, but the net result is steady growth rather than the aggressive growth we saw in the past two years.”

WELL-HEDGED

South Africa is expected to achieve real GDP growth of 1.5% in 2025, according to Fitch Solutions. The reformation of state-owned businesses forms part of this prediction, but the global ratings agency also admits that headwinds persist. BIDTravel has been through the toughest period of its existence in the past five years, and is now well-versed on riding out challenging economic conditions.

“Because of our scale, there are natural hedges for us. When corporate slows slightly, leisure travel increases. In South Africa, we are impacted by the holiday seasons. At Easter, corporate travel slows right down but leisure picks up quickly. Because we present in leisure, corporate and other type of travel, that does spread our risk,” says van Wyk.

He adds that the company is also now actively targeting small- and medium-sized organisations (SMEs) as it looks to further differentiate its customer base to ease reliance on larger corporates. By making travel agency services more economic, and utilising digital tech advances to pass savings to customers, the group is building an improved offering for smaller businesses.

“Where we can benefit from automation to make those things easier, and drive volume, that is all art of our strategy. We want efficiency and automation to enhance our ability to service multiple smaller entities.”

The spread of activity across brands is also important. Demand for inbound leisure shows no sign of abating, and a positive mix of corporate and leisure is what has seen the company though 2024 with success.

“Local South African leisure travel is cyclical, but we are seeing decent demand. Our leisure inbound businesses are doing really well. We are now almost expectant of seeing 20% monthly increases compared to the previous year and we do have to remind ourselves to be conscious of the realities. We are getting great demand out of the UK and the USA, and the appetite for leisure travel in South Africa is still great,” says van Wyk.

Challenges have come from those industries that work on project lifecycles, and those exposed to the global economic environment. However, the BIDTravel corporate offering is exposed to so much more than one industry.

“There is nothing specifically problematic,” says van Wyk, adding that from time-to-time larger projects tend to land all at one time and that can create large peaks and roughs within short periods.

“The motor industry – especially the more established brands – is also under some pressure globally and locally as we see an increase in Chinese imports. Mining is always up and down, and locally our coal and ore businesses have been flat. In Namibia, natural gas and other ores are performing strongly. I think we are just catching some of the downward sides on some of those cycles. Between Rennies and CWT, we have a very good presence in mining and motor, and those industries have flattened slightly. To make up that flattening with other smaller businesses is not easy, but we have managed that effectively,” he says.

ON THE LOOKOUT

To continue diversification of the portfolio, and to add further success to the organisation, BIDTravel is always on the lookout for opportunities to expand through acquisition. The strong growth realised over the past two years has been organic and comes as the business rebuilds a very strong foundation. But to enhance the brand, van Wyk says that he expects the team to continue searching for new acquisitive opportunities.

“We don’t have a mandate to go and acquire in the short-term,” he stresses. “We want to find complimentary businesses and we have identified where would like those to be. I think we might see something in 2025 because it is part of our strategic intent and there are opportunities out there, but nothing is underway just yet.

“We have been looking at options, at varying scale levels but there hasn’t been anything that we’ve really wanted to push over the line. We haven’t been chasing it that hard as we have been focused on organic for now. We do see some opportunity areas that are away from our classic corporate Travel Management Company (TMC) offering, but we are Bidvest and that means we are always looking for bolt-ons that are synergistic with the rest of the business that can contribute to our scale,” he says, adding that the strategy of organic combined with acquisition is proven and well-established.  

For those that could fit the BIDTravel agenda, there is a lot on offer and the funding and growth expertise in the group make for a perfect home for those with genuine ambition for better.

Van Wyk highlights the balance sheet, systems and process expertise, and leadership team as real draws. “The diversity of business in BIDTravel and Bidvest at large does make it an attractive place for acquired businesses to be. A lot of businesses that have historically been acquired by Bidvest have realised appropriate funding for capex or expansion, as long as they are appropriately motivated.”

PEOPLE POWERED

Internally, to ensure long-term success, BIDTravel continues to focus on skills development. During the years of the pandemic, many experienced and highly skilled travel professionals fled the industry for sectors with continuity. This allowed for young people to step into fresh roles of responsibility when activity returned. Van Wyk reports that this has been a big positive for BIDTravel and so investment will continue.

“We have taken a big focus on growing skills internally,” he says. “There was stage when the travel industry was seeing people poached to keep the relevant skills in place. But we have seen a big benefit from investing in younger talent. We have learnership programmes in place and we have partnerships with local tertiary education entities, and that provides the opportunity for people to get in early with some academic background, supported by on-the-job training in a BIDTravel environment. We are really seeing the effects of that. We are also seeing the impact in the mid-tier where people are concentrating on bettering themselves, shorter- and longer-term, through education.”

This progress has allowed the business to reinstate its culture of excellence, ensuring people understand they are the heart and soul of travel and tourism, whether corporate or leisure, and by going the extra mile everyone benefits. “As a service entity, our people are the asset, and we want to create an atmosphere of retention and learning and development.

“We do a lot of volume and make a small margin, so you have to get things right. It’s a great group of people, a great leadership team, and a great culture. Things are looking good,” van Wyk smiles.

Going forward, if the country can add more capacity in the air, and if the global and regional economic environments can allow for stability, BIDTravel is positioned better than ever before to partner with corporate and leisure travellers to create unforgettable experiences.