Corporate Travel Management
Corporate Travel Management (ASX: CTD) provides business travel management services for companies globally. Its suite of technology tools makes it easier and cheaper to book flights, accommodation and generally manage staff travel.
Like all companies related to travel, CTD has suffered a huge hit in earnings and share price since the global pandemic began. However, we believe the worst has now passed. With COVID-19 case numbers more manageable, a vaccine on the horizon and wide-spread rapid testing increasing, including at airports, the world will likely start adopting more of a “live with it” approach. As restrictions ease and people become more confident about travelling, they will be more inclined to finally take that business trip, as there is only so much you can do over Zoom. In addition, companies will need corporate travel management services more than ever before to navigate what is likely to be a more complex “new normal” travel environment.
CTD also stands to benefit from industry consolidation. The global corporate travel market is highly fragmented, with many small and medium sized players who are currently under financial pressure and looking to sell. With its strong balance sheet and experienced management team, CTD is in prime position to take advantage of these opportunities. The company has a good track record of both organic growth and integrating and extracting value from acquisitions. It recently made a large acquisition in the US which complements its existing business and significantly increases its scale. This will allow them to add more customers to their existing technology platform, which means higher margins and a strategically stronger position to win new clients.
Obviously, the trajectory of COVID-19 and the timeline for a successful vaccine is unpredictable. Prolonged restrictions on travel within country and internationally would slow down CTD’s share price recovery, but with its flexible cost base and strong balance sheet, CTD is well placed to ride out any bumps along the road to recovery.
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