National Corporate Housing CEO Tom Atchison talks to SAN about the recently completed acquisition of BridgeStreet’s EMEA and APAC agency business, future deals and positioning the company for the future.
• How long has the BridgeStreet deal been in the offing?
“It’s been a pretty quick process. The administrators at BDO got in contact with a teaser and we said we were interested in finding out more. It turned out to be BridgeStreet, and the deal was done in a few weeks.”
• Will the BridgeStreet brand be retained, and how much of the BridgeStreet workforce will you keep on?
“The BridgeStreet brand is still owned by a parent company in the US. We have a license agreement to use it for a period of time, but we will most likely need to use a different name. We’re not sure what that will be yet, but in the short-term we’ll continue to use the BridgeStreet name. There are around 25 employees who are coming across, the majority of whom have been on furlough, so we’re sorting through that. The hospitality side of the business [which is going in to liquidation. Ed] had significantly more people than the agency side.”
• How straightforward – or otherwise – will assimilating the two companies’ tech platforms be?
“Everything’s relative but I don’t think it’s going to be that difficult. We have a similar sourcing platform technology so we think it’s going to be achievable. There will be some challenges. We were on a call yesterday, working through the respective tech stacks. They have a platform called Easy Source Solution, we happen to have a technology called Single Source Solution, so we will be migrating everybody over time to the Single Source Solution platform. We have a transition services agreement to be able to use their technology as we migrate over.”
• After this deal, and the sale of Oakwood’s agency business to Dwellworks, do you see further consolidation in the agency sector?
“I think there will be more consolidation. There will be some companies being acquired and some going out of business. It’s been a difficult time for any travel-related business, and we’re not immune to that. We’ve been navigating through lower demand and lower revenues, and I think we’ve done a fairly good job doing that, but it’s not without its challenges.”
• How has National’s experience of the pandemic been in terms of volume of business and outlook for recovery? Which regional markets have weathered the storm the best?
Our revenues are significantly down this year from 2019 but I have a great team of people and we have been able to adjust a lot of our spend to match those revenues. As far as certain regions are concerned, APAC is the one that has seen more movement, as they have done a good job of controlling new cases of the coronavirus. I’m a bit jealous that you are already providing vaccines in the UK so congratulations! But we will be doing that here in the next week or two. I believe that things will get better in Q2 and Q3 next year. In the US, there has been an across-the-board softening of demand – I can’t say there’s one region that’s been better than another. They’ve all had their challenges.”
• Do you think Covid will irrevocably change business travel habits, and if so how?
“I’m certain that there will be changes but I don’t have a crystal ball and I don’t know exactly how things will change. There are a lot of technology companies looking to take advantage of change, and there are other non-tech companies looking to pivot so that they can survive and hopefully grow in whatever the future looks like. We’re keeping all of our options open as to what we need to do to change, and to continue to be a leader, and I’m confident that we will manage through this, and whatever the new normal looks like, I think we’ll be a part of it.”
• Finally, do you have any further acquisitions in mind?
“We’re actually looking at six other acquisitions currently. These are difficult times but they are exciting times. We’ll have more liquidity at the end of 2020 than we did at the end of 2019, so I think we are poised to enter 2021 in fine shape. We’re not without challenges but we have positioned ourselves to deal with them.”
