Without insinuating they are all a load of blood suckers I believe that inviting the press to listen to you is akin to inviting Count Dracula around for a nightcap. You want the experience to be worthwhile and enjoyable but there is a chance you will have a pain in your neck and the need for a transfusion afterwards.
Never could this more true than in the corporate travel business as recent events at an ACTE conference testify. They willingly invited journalists in to their sessions, tried to slap down an ‘off the record’ mandate and then were mortified when the press did their job. You cannot hold a very public and very large conference and then say everything (bar what we tell you) is a secret.
Reading about this furore got me thinking about my career as a senior in a travel management company and the experiences I had with the press. They were many and varied and I think they highlighted some of the things that are right and wrong in this particular industry. As a result, here are a few thoughts to ponder on.
Who in the travel industry needs the press? We all do yet we go about fulfilling this need in strange ways. You can take it as a given that unless you deal with them right you can get into trouble. Deal with them properly and you will get all that you desire. Bullshit, dictate or threaten them and you get what you richly deserve. Ignore them and you can start wondering why nobody knows about you.
On the other side the press needs you or they have nothing to write about. Simplistic I know but this is something often forgotten. So if you want to be a player in this industry you have to help them and not throw obstacles, smokescreens and dictates in their way. You also need to tell them something useful, not just the samey releases and platitudes that make you yawn let alone them!
I have never known an industry so selectively secret than our own. Many corporations won’t tell you what TMC they use let alone anything about their travel profile or philosophy. Suppliers only want to talk in sanitised clichés about new products and services but become very reticent when it comes to evidence and case studies. Hardly surprising as very often such products are in their early stages or even a hurried reaction to a competitor’s announcement. Hence the so called ‘smoke and mirrors’ syndrome we have encountered over recent years, Just ask yourself how many of those super duper announcements five years past have ultimately turned into anything worth having.
My own experiences with the press were many and varied and I must admit some of them gave our PR departments kittens. But I can honestly say they were both useful and rewarding to me and the companies I worked for. Why? Because I told them’ like it is’ but in a way that gave us credibility and, hopefully, respect. There is nobody better to have on you side than a journalist who believes in you and nobody worse than one who feels patronised and used.
What advice would I give? The following might help:
Never give a journalist a story and expect him not to use it. It is not in his nature.
Never give them something unsubstantiated and boring and expect publication.
Treat them as the valuable marketing tool they are not as a company stooge.
Stop being so darn secretive. If you got it then flaunt it.
Never treat them or their readers as idiots (American Airlines take note).
If you invite them around do not let them bite your neck! I suggest you try providing high quality ‘blood bags’ of information that are digestible and tasty!
Monday, October 10, 2011
Monday, September 12, 2011
The Beat Live? Boy What a Blast
I have just been reading the agenda and speaker list and boy what a blast I would have if I were there! No folks, this is not an advertorial for this event, more a recognition that at last somebody in the travel world is getting together some smart guys to air critical issues. I hope they do not let us and themselves down by blowing the opportunity to sidetrack posturing and ‘company speak’ to thrash out some alternative arguments.
My time for speaking at such events has diminished either by the lack of an own company to provide travel logistics or concerns about just how forthright I have become since shedding company policy shackles. Either way it reduces wear and tear on my heart and liver but sometimes, rather like my scruffy old jeans, I miss them like this one.
I then started asking myself why I am so het up about not attending yet another industry conference. What would be the one question I would ask if I was there? What would I press speakers about? Why do I think it is so darn important? How much would I lose at the Blackjack table?! Before moving on I thought I would scribble down a few thoughts on the topic I would bring up if I had made it to Las Vegas. You never know, somebody might use part of my thinking within their own contribution.
I would ask airlines to explain the practicalities of how they make their strategic commercial/distribution decisions. Within that who the decision makers are? Who within their organisational management do they interface with (i.e. sales, marketing etc)? Do they factor in the impact and needs of their corporate customers and, if so how and through what channels? Do they consult the corporate customer and who/how?
I would want to know about their policies and priorities. Are their decision makers fully market aware? Do they think they need to be? Does their organisation feel any duty of care to the industry they work in or do they simply focus on their own needs and expect the supply chain to adjust with their changes?
I still find it extraordinary that after all this time even people of my years do not really truly know who makes the key decisions in the air supplier sector. Experience has made me pretty certain it is nobody less than twice removed from customer interface. In fact I am pretty certain that most sales divisions are low enough in the company pecking order not to have much input. If they are being honest they are mainly left to pick up the strategic pieces.
It does not need a brain surgeon to get to the point I am trying to make which is that I believe this market is supplier and not customer driven. This was (perhaps) OK in the past when the industry was heavily regulated but surely not now. Not only do they want to have their cake and eat it but they want somebody to wash up after them…for nothing!
The point of the question is to explore if there is any better way of receiving and giving true consultation between corporations, their TMCs and their supplier partners. I know it is a competitive world out there but surely there is a better modus operandi than the current system of making decisions without true understanding. You only have to look at some of the arguments coming out from AA regarding distribution to see that they either do not understand their customers wishes or choose to ignore them.
Anyway, to those that are going to ‘The Beat Live’ have a blast from me and get some answers!
My time for speaking at such events has diminished either by the lack of an own company to provide travel logistics or concerns about just how forthright I have become since shedding company policy shackles. Either way it reduces wear and tear on my heart and liver but sometimes, rather like my scruffy old jeans, I miss them like this one.
I then started asking myself why I am so het up about not attending yet another industry conference. What would be the one question I would ask if I was there? What would I press speakers about? Why do I think it is so darn important? How much would I lose at the Blackjack table?! Before moving on I thought I would scribble down a few thoughts on the topic I would bring up if I had made it to Las Vegas. You never know, somebody might use part of my thinking within their own contribution.
I would ask airlines to explain the practicalities of how they make their strategic commercial/distribution decisions. Within that who the decision makers are? Who within their organisational management do they interface with (i.e. sales, marketing etc)? Do they factor in the impact and needs of their corporate customers and, if so how and through what channels? Do they consult the corporate customer and who/how?
I would want to know about their policies and priorities. Are their decision makers fully market aware? Do they think they need to be? Does their organisation feel any duty of care to the industry they work in or do they simply focus on their own needs and expect the supply chain to adjust with their changes?
I still find it extraordinary that after all this time even people of my years do not really truly know who makes the key decisions in the air supplier sector. Experience has made me pretty certain it is nobody less than twice removed from customer interface. In fact I am pretty certain that most sales divisions are low enough in the company pecking order not to have much input. If they are being honest they are mainly left to pick up the strategic pieces.
It does not need a brain surgeon to get to the point I am trying to make which is that I believe this market is supplier and not customer driven. This was (perhaps) OK in the past when the industry was heavily regulated but surely not now. Not only do they want to have their cake and eat it but they want somebody to wash up after them…for nothing!
The point of the question is to explore if there is any better way of receiving and giving true consultation between corporations, their TMCs and their supplier partners. I know it is a competitive world out there but surely there is a better modus operandi than the current system of making decisions without true understanding. You only have to look at some of the arguments coming out from AA regarding distribution to see that they either do not understand their customers wishes or choose to ignore them.
Anyway, to those that are going to ‘The Beat Live’ have a blast from me and get some answers!
Friday, September 2, 2011
A Distribution Prediction
Perhaps if you want to understand some of the practicalities of the airlines planned change over to direct connect you could look at the current hotel booking model and how it does (or does not) work. To me the hotel model is where the airline industry is heading. Let me explain.
Money and strategy matters aside the consolidated ‘one stop shop’ offering provided by the Global Distribution Systems (GDSs) is perfect for customers and intermediaries alike. You do not have to go to numerous different ‘shops’ to buy your airline product. Shops that have different languages, booking methods, rules and reporting. It is all there for you in one common language package with little diversity or complication.
Now hotels are totally different and far more difficult to package. Each location can be independent, owned by a chain, part of a consortium and sometimes a mixture. Each speak a slightly different version of the same language and they very rarely sell their inventory through a GDS because they are too expensive. Instead they do their own thing via many different outlets at many different tariffs. Frankly it is all a bit of a mess if you want a properly managed travel programme, particularly as they use differing technology.
So what is happening with hotels now and how does it compare with the current GDS system? In the main TMCs must have some kind of ‘connection’ (either direct or via third party) with key hotel establishments and chains. Some TMCs have created their own databases to hold inventory and information that then gets linked up to the GDS air booking screen. It ends up all looking like one source but contains numerous connection types that range from online links to manual entry.
The TMC has to create room allocation acquisition and management systems that doubtless include room close-out periods and price variations by customer and intermediary. These need constant adjustment and repopulation to remain current.
Ultimately they end up with their own mini GDS for hotels with numerous information flows coming from a similar number of independent sources.
OK, back to airlines. They are necessarily a selfish bunch. They don’t want to pay for the current excellent consolidated air booking system any more. They just want to sell their seats in a way that gives them more power/control and less cost. They try and dress it up differently by saying it is what the customer wants which of course is laughable if it wasn’t so serious. I wish they would just come out and say the truth which is that they intend to eradicate this cost or pass it elsewhere.
Where might this end up? Some might call it industry evolution but I would call it going backwards. Instead of efficiency and commonality in air travel it will revert back to the hotel model of individual airlines operating at different speeds with different communication methods. They will deal through TMCs who also vary in skill and flexibility. There will be dual pricing and availability depending on which model you book through and which source you use. That is progress?
I am sure the GDS have explored all avenues to find a solution to being considered bad value for money by their airline customers. I have always thought that if they presented and justified their cost more intelligently, reduced prices strategically whilst building in new markets (such as hotels) they might do a lot better for all our sakes Either that or negotiate their wares with corporations/TMCs in a new and different way? After all people will pay if they see a value and surely it is better than the chaotic alternative illustrated by the hotel market?
The smart TMCs have seen this direct connect war coming. In fact you would have had to be blind not to. They have been building what they call ‘super platforms’ and the like in anticipation of it. I predict it is only a matter of time before the mega TMCs connect their ‘pipe’ to the main suppliers in the air and hotel world. In fact it is happening now. What happens then? Are the TMCs going to distribute inventory at no charge? I doubt it. They will most likely become the new GDS of the future but with broader product reach and more control on who the customer uses and at what price.
Perhaps the GDS and airlines need to get there heads together in more harmony or they may end up creating something that compares with Frankenstein’s monster. Built with various industry parts but likely to murder them!
Anonymous Comment:
Brilliant commentary. Mike has REALLY hit upon something important here.
Love the line about airlines wanting more control and less cost, "They try and dress it up differently by saying it is what the customer wants which of course is laughable if it wasn’t so serious. I wish they would just come out and say the truth which is that they intend to eradicate this cost or pass it elsewhere."
Again, brilliant analysis
Anonymous Comment
As ever Mike hits the nail on the head whilst other so called industry experts have a tendancy to hit their thumb with an oversize hammer. What is being described as more than likely to happen within the industry is in fact already work in progress; and perhaps further down the line than many (on all sides of the equation) would care to admit.
Money and strategy matters aside the consolidated ‘one stop shop’ offering provided by the Global Distribution Systems (GDSs) is perfect for customers and intermediaries alike. You do not have to go to numerous different ‘shops’ to buy your airline product. Shops that have different languages, booking methods, rules and reporting. It is all there for you in one common language package with little diversity or complication.
Now hotels are totally different and far more difficult to package. Each location can be independent, owned by a chain, part of a consortium and sometimes a mixture. Each speak a slightly different version of the same language and they very rarely sell their inventory through a GDS because they are too expensive. Instead they do their own thing via many different outlets at many different tariffs. Frankly it is all a bit of a mess if you want a properly managed travel programme, particularly as they use differing technology.
So what is happening with hotels now and how does it compare with the current GDS system? In the main TMCs must have some kind of ‘connection’ (either direct or via third party) with key hotel establishments and chains. Some TMCs have created their own databases to hold inventory and information that then gets linked up to the GDS air booking screen. It ends up all looking like one source but contains numerous connection types that range from online links to manual entry.
The TMC has to create room allocation acquisition and management systems that doubtless include room close-out periods and price variations by customer and intermediary. These need constant adjustment and repopulation to remain current.
Ultimately they end up with their own mini GDS for hotels with numerous information flows coming from a similar number of independent sources.
OK, back to airlines. They are necessarily a selfish bunch. They don’t want to pay for the current excellent consolidated air booking system any more. They just want to sell their seats in a way that gives them more power/control and less cost. They try and dress it up differently by saying it is what the customer wants which of course is laughable if it wasn’t so serious. I wish they would just come out and say the truth which is that they intend to eradicate this cost or pass it elsewhere.
Where might this end up? Some might call it industry evolution but I would call it going backwards. Instead of efficiency and commonality in air travel it will revert back to the hotel model of individual airlines operating at different speeds with different communication methods. They will deal through TMCs who also vary in skill and flexibility. There will be dual pricing and availability depending on which model you book through and which source you use. That is progress?
I am sure the GDS have explored all avenues to find a solution to being considered bad value for money by their airline customers. I have always thought that if they presented and justified their cost more intelligently, reduced prices strategically whilst building in new markets (such as hotels) they might do a lot better for all our sakes Either that or negotiate their wares with corporations/TMCs in a new and different way? After all people will pay if they see a value and surely it is better than the chaotic alternative illustrated by the hotel market?
The smart TMCs have seen this direct connect war coming. In fact you would have had to be blind not to. They have been building what they call ‘super platforms’ and the like in anticipation of it. I predict it is only a matter of time before the mega TMCs connect their ‘pipe’ to the main suppliers in the air and hotel world. In fact it is happening now. What happens then? Are the TMCs going to distribute inventory at no charge? I doubt it. They will most likely become the new GDS of the future but with broader product reach and more control on who the customer uses and at what price.
Perhaps the GDS and airlines need to get there heads together in more harmony or they may end up creating something that compares with Frankenstein’s monster. Built with various industry parts but likely to murder them!
Anonymous Comment:
Brilliant commentary. Mike has REALLY hit upon something important here.
Love the line about airlines wanting more control and less cost, "They try and dress it up differently by saying it is what the customer wants which of course is laughable if it wasn’t so serious. I wish they would just come out and say the truth which is that they intend to eradicate this cost or pass it elsewhere."
Again, brilliant analysis
Anonymous Comment
As ever Mike hits the nail on the head whilst other so called industry experts have a tendancy to hit their thumb with an oversize hammer. What is being described as more than likely to happen within the industry is in fact already work in progress; and perhaps further down the line than many (on all sides of the equation) would care to admit.
Wednesday, August 17, 2011
Do we need another Industry Association?
Surely we have enough associations? Do we really need another one? I think the answer is probably no…if those we have provide greater focus on the re-engineering and industry strategies that are developing as I write. But they don’t.
Corporate travel industry evolution is predominately run by it’s suppliers who then create a further strategic reaction across the rest of the supply chain. It has always been so and sadly decisions are made not by the sellers who attend industry conference but executive well removed from them.
In fact I would say the travel supplier strategist liaise as little with their own salesmen as they do with their customers. In addition the airlines have another vehicle (IATA) who are even more removed from the corporate buyer and justify their existence by introducing policy changes that pay for themselves and earn airlines more money. The money comes from tinkering with the rules that were created by airlines for the airlines and are mainly unknown to the other end of the supply chain. Amongst them are things that impact corporates cash flow data fares and rules.
So what is my point? What I am saying is that the whole industry needs to have input and understanding travel evolution and I do not think this is getting any kind of priority by the existing associations. I think there is still too much smoke and mirrors and too little hard information.
Do not get me wrong. GBTA, ACTE et al all provide a useful and valuable service but how deep do they delve into the shadowy world of industry development. I think the trouble is that they have to be all things to all men. If you rely on supplier income from advertising and sponsorship for your very existence can you really afford to challenge your benefactors? Can you really have those suppliers represented at the very core of your own executive grouping? Although I admire these associations greatly for the excellent job they do in their field I do not think the answer lies with them.
So what else is there? I never thought (in my old life) I would say this but the nearest thing we have is Kevin Mitchell’s Business Travel Coalition. For some reason, as a TMC, I found them rather galling but now I have looked closer I realise a developed model could possibly do the job. It represents a key group of large corporations with little or no outside influencers. The problem is that it is not big enough and needs to be more global. It also needs (in my opinion) more subtlety when dealing with international suppliers.
I guess the organisation I am hoping for is a group of key global corporate customers who are strong enough to win serious attention and prepared to invest both brains and power into understanding and contributing to the market they spend so much money in. Could it possibly happen? I hope so. Otherwise we can continue to evolve the way we currently do which is that suppliers such as Lufthansa and American come up with their own strategies and savvy corporations invest in finding an antidote.
You may think I have a point or you might not. May I suggest you take a look at the conference agendas of the major association players and see how little time has been given to the key issues relating to distribution, regulation and other industry developments?
Thursday, July 28, 2011
What the Customer Really Wants? – Part 1
OK, I know I am becoming a grumpy old man. As my appointment with the ‘Grim Reaper’ gets closer the more things in corporate travel seem to rankle. For example my pet hate at present is the strap line used by ACTE to promote itself.
It seems the three key things that most attract new and current members are to ‘be smart, be hip and be seen’. Now I can go with the first one but I think there are a few other worthy aspirations slightly ahead of being ‘hip’ and ‘seen’. I mean what is all that about? But I digress!
My diatribe today is all about ‘the customer’ and what they truly want. Now this is not easy as, depending where you dip into the supply chain, you get a different definition of customer. It becomes clear that each definition of the customer is more linked to who we want them to be rather than who they really are.
If you go to an airline like say American they are likely to say the traveller. Go to an international corporation and they would say we, the company are. Go to a TMC and they will say either or both depending on who makes the decision to appoint us and who has the strength to get us sacked. Go to the GDS and they will say ‘we buy/sell segments from and to airlines and TMCs so we don’t need to know.
Now let us assume for one moment that the traveller is the decision maker. In many cases this is fact. They may get influenced either strongly or weakly by their budget holding employers but hey, they can usually find a way around that. So what do they want? Simple you may think but I contend otherwise.
If you read the papers, magazines etc what everyone is interested in price. How do I get this cheap, who can give me the best price package, how can I get lower fares but better perks? The low cost carriers came along and thrived by undercutting the big established boys and the glory of cheapness became a reality. But hold on a minute, those low cost flights were on high density short haul routes and every time a transatlantic model was launched it failed. Does that say something?
It says to me that people are prepared to put up with most kinds of discomfort on little commuter routes but not when they are going any distance. Then the cabin gets cramped, the service poor and the food practically inedible. But despite all this the media and corporate hype is all about how all travel should be cheap and fares stripped down to their component parts.
The result is that although the truth of low fares is that they are in reality getting less available, the call for them is getting greater. It is also now on all routes not the one hour local shuttle service. So how do the mainstream airlines cope with this demand? They simply give the customer what they think they want in a base price but ‘nickel and dime’ the price up on ancillaries. Result? They are probably better off because they have also stripped out a load of service costs.
Unfortunately these extra services that have been removed out are the very things that differentiate them in the market place. They have also had a major impact on how they are perceived by ‘the traveller’. To me British Airways is a fine example of this although there are many more. BA has shed cost like a snake sheds skin. With all these customers supposedly wanting lower prices they either had to re-register as a charity or strip to the bone. They chose the latter and it is bearing dividends for them…in the short term, as the backlash is growing.
My mood was not improved last Sunday when I was reading the Sunday Times Colour Supplement. In it there was an article that was hugely critical of British Airways and its Heathrow hub. It self righteously condemned BA on everything from staff attitude to catering. I did not get a proper traditional English afternoon tea one interviewee bleated; another was depressed about meagre snacks and miserable staff.
Come on guys, you killed the airline BA was in order to create the one you say everyone wants.
BA simply charged too much for the modern world to stomach so what did they do?
They made themselves competitive by taking on the unions to reduce overheads, shed unprofitable routes, cut back on catering, and started charging for previously free services. And what do we do now they have become lean, mean and cheaper? We criticise them and mourn the demise of those dear little things we took for granted.
So is there a moral behind all this? I think there is. And the answer, in part was in the final paragraphs of that idiotic article. The piece listed all the things that passengers are supposed to want from an airline like BA (most were what BA used to do) and then it said on behalf of the traveller ‘We’ll pay – provided it’s good’ Wow!
So the traveller wants service after all? Maybe it is not universally about price? Could people really be prepared to ‘pay – provided it’s good? Your guess is as good as mine but in the meantime I suggest we could all take a good look at what we are turning this industry into and whether we are willing to pay to put part of it back together again – if it is good.
It seems the three key things that most attract new and current members are to ‘be smart, be hip and be seen’. Now I can go with the first one but I think there are a few other worthy aspirations slightly ahead of being ‘hip’ and ‘seen’. I mean what is all that about? But I digress!
My diatribe today is all about ‘the customer’ and what they truly want. Now this is not easy as, depending where you dip into the supply chain, you get a different definition of customer. It becomes clear that each definition of the customer is more linked to who we want them to be rather than who they really are.
If you go to an airline like say American they are likely to say the traveller. Go to an international corporation and they would say we, the company are. Go to a TMC and they will say either or both depending on who makes the decision to appoint us and who has the strength to get us sacked. Go to the GDS and they will say ‘we buy/sell segments from and to airlines and TMCs so we don’t need to know.
Now let us assume for one moment that the traveller is the decision maker. In many cases this is fact. They may get influenced either strongly or weakly by their budget holding employers but hey, they can usually find a way around that. So what do they want? Simple you may think but I contend otherwise.
If you read the papers, magazines etc what everyone is interested in price. How do I get this cheap, who can give me the best price package, how can I get lower fares but better perks? The low cost carriers came along and thrived by undercutting the big established boys and the glory of cheapness became a reality. But hold on a minute, those low cost flights were on high density short haul routes and every time a transatlantic model was launched it failed. Does that say something?
It says to me that people are prepared to put up with most kinds of discomfort on little commuter routes but not when they are going any distance. Then the cabin gets cramped, the service poor and the food practically inedible. But despite all this the media and corporate hype is all about how all travel should be cheap and fares stripped down to their component parts.
The result is that although the truth of low fares is that they are in reality getting less available, the call for them is getting greater. It is also now on all routes not the one hour local shuttle service. So how do the mainstream airlines cope with this demand? They simply give the customer what they think they want in a base price but ‘nickel and dime’ the price up on ancillaries. Result? They are probably better off because they have also stripped out a load of service costs.
Unfortunately these extra services that have been removed out are the very things that differentiate them in the market place. They have also had a major impact on how they are perceived by ‘the traveller’. To me British Airways is a fine example of this although there are many more. BA has shed cost like a snake sheds skin. With all these customers supposedly wanting lower prices they either had to re-register as a charity or strip to the bone. They chose the latter and it is bearing dividends for them…in the short term, as the backlash is growing.
My mood was not improved last Sunday when I was reading the Sunday Times Colour Supplement. In it there was an article that was hugely critical of British Airways and its Heathrow hub. It self righteously condemned BA on everything from staff attitude to catering. I did not get a proper traditional English afternoon tea one interviewee bleated; another was depressed about meagre snacks and miserable staff.
Come on guys, you killed the airline BA was in order to create the one you say everyone wants.
BA simply charged too much for the modern world to stomach so what did they do?
They made themselves competitive by taking on the unions to reduce overheads, shed unprofitable routes, cut back on catering, and started charging for previously free services. And what do we do now they have become lean, mean and cheaper? We criticise them and mourn the demise of those dear little things we took for granted.
So is there a moral behind all this? I think there is. And the answer, in part was in the final paragraphs of that idiotic article. The piece listed all the things that passengers are supposed to want from an airline like BA (most were what BA used to do) and then it said on behalf of the traveller ‘We’ll pay – provided it’s good’ Wow!
So the traveller wants service after all? Maybe it is not universally about price? Could people really be prepared to ‘pay – provided it’s good? Your guess is as good as mine but in the meantime I suggest we could all take a good look at what we are turning this industry into and whether we are willing to pay to put part of it back together again – if it is good.
Monday, July 18, 2011
READERS FORUM
I would really like to hear more from you!
Reason being that I want to know if what I write is worth reading.
I am not actively seeking compliments (although they would be nice) but also comment/criticism too.
So if you are pleased, annoyed or anything in between please use the comment facility on this or any of the relevant blogs
I would also welcome statements an particularly questions and suggestions on any topic. Is there anything you want me to write about?
Also I have kind of slowed down my industry blogs but I am thinking of starting again out of frustration that nobody seems to be resolving the main issues. What do you think?
Be watching out for you and you are welcome to remain anonymous if you wish
Take Care and thanks for reading.
MIKE
RESPONSE to Who is the customer?
You bring up great perspectives in your comments Mike. Any business worth its salt can tell you who their highest yield customers are and who drives the decision making process for that customer. The TMC and the corporate travel department are key and if you don't count meetings and incentive travel, corporate travel makes up 25 percent of all travel in the US. When booked through the TMC, the average yield is significantly higher than when booked online direct with the airline.
With the order of so many new aircraft announced this week, you would think that American would be planning ahead on how to fill those planes profitably.
~ Chicke Fitzgerald, Founder and CEO, Solutionz
And
Excellent!
Warm regards,
Kevin Mitchell
Business Travel Coalition, Inc
Mike
I went through your blog today, read many posts and I found it very interesting and well written.
Keep up the good work
Kind regards
Daniel
Daniel Zetík
Reason being that I want to know if what I write is worth reading.
I am not actively seeking compliments (although they would be nice) but also comment/criticism too.
So if you are pleased, annoyed or anything in between please use the comment facility on this or any of the relevant blogs
I would also welcome statements an particularly questions and suggestions on any topic. Is there anything you want me to write about?
Also I have kind of slowed down my industry blogs but I am thinking of starting again out of frustration that nobody seems to be resolving the main issues. What do you think?
Be watching out for you and you are welcome to remain anonymous if you wish
Take Care and thanks for reading.
MIKE
RESPONSE to Who is the customer?
You bring up great perspectives in your comments Mike. Any business worth its salt can tell you who their highest yield customers are and who drives the decision making process for that customer. The TMC and the corporate travel department are key and if you don't count meetings and incentive travel, corporate travel makes up 25 percent of all travel in the US. When booked through the TMC, the average yield is significantly higher than when booked online direct with the airline.
With the order of so many new aircraft announced this week, you would think that American would be planning ahead on how to fill those planes profitably.
~ Chicke Fitzgerald, Founder and CEO, Solutionz
And
Excellent!
Warm regards,
Kevin Mitchell
Business Travel Coalition, Inc
Mike
I went through your blog today, read many posts and I found it very interesting and well written.
Keep up the good work
Kind regards
Daniel
Daniel Zetík
Who is the customer around here anyway?
OK, OK, I know. I said I was going to quit corporate travel and disappear into the mists of travel legend…or something like that. But it is so very hard! I am rather like Frank Sinatra was, or Michel Jordan is, where something happens which triggers off a new reason why the lure of starting again becomes too much.
The trigger for me was American Airlines president Tom Horton and a guest article he wrote for ‘The Beat’ on ‘Customizing the Travel Experience’. Right, it was the expected sanitized statement that had no doubt done the rounds of the AA public relations department before release but it made one thing screamingly clear to me. That is, who American Airlines think their customers are.
They are clearly playing their ‘customer’ card. In fact in a smallish statement of circa 800 words they had used the term (and derivatives) at least 15 times before I gave up counting. Reading the words of the article it is also clear that by customer they refer to travellers and the choices AA are offering these individuals. In contrast he used the word ‘corporate’ once (that I saw) and that was referring to ‘travel agents’ customers.
Does this matter? Is it a simple slip? Or does it show a complete lack of recognition, empathy, and understanding with the corporate travel world? After all, do corporations really want their travellers to have all these extra choices at an extra price? Do they want the lack of control that this brings to their travel policy? Do they want the extra expense taken out of their control for potentially both bookings and ancillaries?
Does it matter that the president of AA still thinks of such a key intermediary as a ‘travel agent’ when the corporate service provided is now Travel Management hence the correct and more accurate term TMCs. This may sound like splitting hairs but is it. Or is it more that? Is it AA demonstrating a worldwide apathy amongst airlines to accept that the corporate world is changing around them?
So what is this ‘customizing’ all about? To me it is about the airlines tweaking the evolving business market to their own advantage whilst ignoring the needs/demands of a major sector of their market. Is that such a surprising thing? Probably not but I cannot bear all this sugar coating around what is actually some very unpleasant tablets. Here are some examples:
We don’t want to pay the GDS any more even though it is the medium of choice for those ‘travel agents’ corporate customers. We do not seem to be able to renegotiate a deal with these GDS so let’s provide a direct product. OK it is not what corporates want but hey, think of the savings, the control, the MI and the ancillary selling opportunity.
We have been badly stung by the inroads ‘no frills’ airlines have made in our markets. Fares have gone down and their shares have increased, but hang on, there is an opportunity here. These airlines have reached critical mass to the point where they have to add more charges to maintain growth and survive. They are not the threat they were and we can now use their weapons against them. We too can offer basic core prices and then bolt on all those other ancillaries to mask the true cost.
It seems to me that corporations themselves are helping (or at least not hindering) such strategies. Corporations seem to like unbundling as it works in other spheres of procurement. But does it work in travel? Ah, that is far more complex and has greater ramifications in the supply chain. Cost has a habit of moving, not disappearing.
I suggest corporates need to have a much greater influence in the travel industry. Their associations need visibly shift away from their suppliers who they use to subsidise their costs through sponsorship and advertising. These bodies need to push their way to the table which is totally dominated by the major suppliers. They need to be heard and recognised.
Suppliers need to understand that the world has moved on and that the ‘customer’ in the corporate world is the company itself and not its employees. Those intermediaries such as TMCs are not simply booking travel agents but an outsourced arm of their corporate customer. Only then will we have a successful transition to a new model.
The trigger for me was American Airlines president Tom Horton and a guest article he wrote for ‘The Beat’ on ‘Customizing the Travel Experience’. Right, it was the expected sanitized statement that had no doubt done the rounds of the AA public relations department before release but it made one thing screamingly clear to me. That is, who American Airlines think their customers are.
They are clearly playing their ‘customer’ card. In fact in a smallish statement of circa 800 words they had used the term (and derivatives) at least 15 times before I gave up counting. Reading the words of the article it is also clear that by customer they refer to travellers and the choices AA are offering these individuals. In contrast he used the word ‘corporate’ once (that I saw) and that was referring to ‘travel agents’ customers.
Does this matter? Is it a simple slip? Or does it show a complete lack of recognition, empathy, and understanding with the corporate travel world? After all, do corporations really want their travellers to have all these extra choices at an extra price? Do they want the lack of control that this brings to their travel policy? Do they want the extra expense taken out of their control for potentially both bookings and ancillaries?
Does it matter that the president of AA still thinks of such a key intermediary as a ‘travel agent’ when the corporate service provided is now Travel Management hence the correct and more accurate term TMCs. This may sound like splitting hairs but is it. Or is it more that? Is it AA demonstrating a worldwide apathy amongst airlines to accept that the corporate world is changing around them?
So what is this ‘customizing’ all about? To me it is about the airlines tweaking the evolving business market to their own advantage whilst ignoring the needs/demands of a major sector of their market. Is that such a surprising thing? Probably not but I cannot bear all this sugar coating around what is actually some very unpleasant tablets. Here are some examples:
We don’t want to pay the GDS any more even though it is the medium of choice for those ‘travel agents’ corporate customers. We do not seem to be able to renegotiate a deal with these GDS so let’s provide a direct product. OK it is not what corporates want but hey, think of the savings, the control, the MI and the ancillary selling opportunity.
We have been badly stung by the inroads ‘no frills’ airlines have made in our markets. Fares have gone down and their shares have increased, but hang on, there is an opportunity here. These airlines have reached critical mass to the point where they have to add more charges to maintain growth and survive. They are not the threat they were and we can now use their weapons against them. We too can offer basic core prices and then bolt on all those other ancillaries to mask the true cost.
It seems to me that corporations themselves are helping (or at least not hindering) such strategies. Corporations seem to like unbundling as it works in other spheres of procurement. But does it work in travel? Ah, that is far more complex and has greater ramifications in the supply chain. Cost has a habit of moving, not disappearing.
I suggest corporates need to have a much greater influence in the travel industry. Their associations need visibly shift away from their suppliers who they use to subsidise their costs through sponsorship and advertising. These bodies need to push their way to the table which is totally dominated by the major suppliers. They need to be heard and recognised.
Suppliers need to understand that the world has moved on and that the ‘customer’ in the corporate world is the company itself and not its employees. Those intermediaries such as TMCs are not simply booking travel agents but an outsourced arm of their corporate customer. Only then will we have a successful transition to a new model.