A Little-Known Firm Agrees to Buy a 111-Year-Old Travel Business for $6.3 Billion
Started in 1915 to get travelers out of wartime Europe, it now handles trips for nearly half the Fortune 500.
David Senra · Bringing AI to the Real Economy | Alexander TaubmanAlexander Taubman, the co-founder of the investment firm Long Lake, has a simple test for good corporate travel. He pictures an entire team stranded in Chicago at 2 in the morning in a snowstorm.
"Somebody's gotta be able to answer the phone and know what to do," he says. He gives the same test for a war breaking out while thousands of employees are traveling in the Middle East.
His little-known firm announced it would pay $6.3 billion for American Express Global Business Travel and take it private, moving it off the stock market into private ownership. The company is 111 years old, and the deal was Long Lake's first step into travel after about a year of studying the industry.
American Express started the business in 1915 to get holders of its travelers' checks, paper vouchers that worked like insured cash abroad, out of Europe after World War I began. Taubman says he has been a customer himself, and most people have.
Today the business manages travel for close to half the Fortune 500, the annual list of the largest American companies by revenue, plus many large global companies, much of the United States government and military, and other governments.
Taubman says the attraction was how long clients stay. The company keeps customer logos in the high 90s in percentage terms, keeps more than 100 percent of spending from existing customers as they grow, and averages 15-year ties with its top couple hundred clients.
He calls travel a small cost that clients treat as "a mission-critical service," adding, "You don't wanna screw it up." Of finding this business after looking at several others, he said, "You just kinda know when you see it."
Questions people ask
What does a corporate travel agency actually do?
Corporate travel agencies manage business trips for large employers, booking flights and hotels, handling changes, and helping travelers when plans fail. At this scale, they also track thousands of employees at once and bring them home during storms, wars, and other disruptions.
What do logo retention and dollar retention mean?
Logo retention is the share of client companies that stay from year to year, while dollar retention measures whether those clients spend more or less over time. More than 100 percent dollar retention means old clients are growing enough to outweigh any lost spending.
What is Long Lake's business?
Long Lake buys established service businesses and tries to improve them with artificial intelligence that removes repetitive office work. It says it now owns close to 40 companies across homeowner association management, HR services, specialty tax, infrastructure services, and travel.