The Corporate Travel Management Ltd (ASX: CTD) share price jumped 4% today in initial reaction to its latest contract win. At market close, the share price ultimately finished down 0.83% at $17.92.
The ASX travel share revealed that it had won a large contract with the Australian Government as the sole provider for the contract.
Government contract win
Corporate Travel has been awarded the travel management services contract for the 'whole of Australian Government' for an initial four-year term with a further three years of extension options.
This whole of Australian government program is "considered to be the largest travel program in Australia and New Zealand". It's estimated to contribute approximately 20% of Corporate Travel Management's revenue and 30% of the total transaction value (TTV) in the Australia and New Zealand region in FY24. So, it will have an important role in supporting and growing the Corporate Travel Management share price.
This contract will start on 1 July 2023, which is only a few weeks away.
Further details about the contract
Corporate Travel said that this new contract combines the Australian government travel management and accommodation contracts. The offering will utilise the ASX travel share's technology suite.
The company said that the Australian government will enjoy a "bespoke service model, relevant travel tools and savings benefits". The ASX travel share said that it will be much more efficient in its service delivery.
Will this affect how efficiently the company can service its other customers in the region? Corporate Travel Management thinks not because it will be a standalone offer using dedicated staff, so it will have "no impact upon servicing or technology development for Corporate Travel Management's corporate client base in Australia."
Corporate Travel Management share price snapshot
Since the start of 2023, the company's share price has risen by over 20%, as we can see on the chart below.
The company is benefiting from a recovery in the demand for travel, as business travellers return to the skies again following all of the COVID-19 lockdowns.
