BLOG COMMENT -Hotel branding. What’s it all about?

Quite a few people have been looking at some of my blogs on hotels. Whilst feeling pleased I also asked myself whether I had made myself as clear as possible. In case I haven’t here are some comments that may assist you: Q. What is the point of being part of a recognised hotel brand? A. Best description would be economy of scale and also a statement on standards. No major group is going to accept a substandard hotel into their family and most have a clearly defined ‘vision’ on how they wish to be perceived. This covers everything from furnishings to amenities and marketing to performance standards. Having been accepted in a group the primary benefit is that you become part of a much bigger sales and marketing opportunity. There are central promotional funds (mainly consolidated from members) and greater exposure globally. The TMC world are far more interested in this type of grouping as it reduces the number of people they have to negotiate with. There are different types of hotel groups. Some private owners are willing to have their hotel name changed to the brand and hand over the management of the property to them too. Others go only part way by becoming part of a consortium of like-minded properties. They retain their brand name but market as part of this group. They obviously have to maintain certain standards and contribute financially to the consortium management. There are different levels of consortium with differing standards and requirements. Those that decide to ‘go it alone’ have a very different set of challenges. They may fill a particular niche in their own local market but outside that they are unknown. It all depends how much you value being ‘independent’ and how essential (or otherwise) it is to have a broader reach. If you are unique in that there is a big enough local market where you are a major player now and into the future the good for you. Otherwise you may need to think again. Like most business issues it is all about reputation, supply and demand, and resource.

BLOG COMMENT - Car Hire. Pardon me?

Who truly understands car hire except those who are in the business of hiring out cars? On one side you have the 'premium' companies such as Avis and Hertz and then, well, everyone else! Unlike airlines the car hire companies offer the same directly comparable means of transport but at different prices. Why? How? After many years in the TMC business I still haven't a clue. Well not really! I expect the bigger companies are global and have a bigger inventory but should they cost so much? OK, so they can (or could) afford to pay middle men incentives to promote them. And they could always leverage their coverage and reputation but even so the price gap is simply too high. So what are they doing about it? I guess they are doing what everyone else is doing i.e. reducing their overheads and becoming more competitive. Or are they? Who knows? Car Hire has started to shift away from travel procurement anyway. Good job too if everyone else understands as little as me.

BLOG COMMENT - Branson's Bile

Submitted by Mike Platt on Thu, 2012-09-13 16:59. It is regretable that Richard Branson seems to have thrown all his toys out of the cupboard over the West Coast rail service. I know he can be petulant but this is taking it to extremes. To my mind the process went that the government went to tender, people bid, bids were evaluated and the successful candidates notified. Quite stanard and quite reasonable. Now I know the government ties itself up in rules and regulations which are further exacerbated by European legislation and this is what I presume Mr Branson is trying to manipulate. I personally have been through all this during the MOD travel tender and, although they thought about it, none of the other contenders considered they would gain in the long or short term by formally objecting to the process. For once I am four square behind the government on this. The fact that the man is Richard Branson should not be enough to drive anyone into a U-turn on a decision based on price and service. If they fail? Well then a review might be necessary and MR B will have his chance again.

BLOG COMMENT- Off the rails

Selling rail tickets is a real pain....if you are a TMC. First there is the illusion that rail is cheap and second, the illusion that it is easy! I swear it would be easier to accurately predict the weather than consistantly find low prices in peak periods! Poor old TMCs have to provide this service if they wish to offer a full 'one stop shop' package of products. There is no point in saying you will provide lucrative air products and then suggest they do what they like with rail. It just does not fit and invites segmentation of all services. Meanwhile their online rail booking specialist 'partners' sit like vultures on the sidelines ready to zoom in after the kill. These operators such as Trainline and Evolvi in Europe have set up their services to support direct sell at a price. TMCs can only sell at that price plus some. Each tries to negotiate what that 'plus' will be and uses their current 'one stop' offering as a compelling bargaining chip. And the traveler? I can here him now."What,you expect me to pay these people a fee for a RAIL ticket? I can get what I need at the station". They have a point, they can get it at the station if they have the time/inclination to search for it. Rail commision used to pay for a lot of this but that too is diminishing. Oh what joy is net pricing. Then you have the American buyer with their fascination for transaction fees. In the USA most travel is by air but when they buy in Europe they seem to get amnesia over the subject. The travel type percentages are radically different here but they really do not recognise this as an issue. It is. Transaction fees work in the USA. In Europe they don't. The European market is crawling with these fees but they do not really work and TMCs find all sorts of ingenious ways to get round them. Everything from declaring rail bookings as 'free' but hiking air rates to compensate or perhaps outsourcing rail to an online self book service (at higher rates)and charge a small ticketing fee. Somebody really has to do the Maths here and either pay up centrally or give up on your TMC all inclusive service.

BLOG COMMENT - TMCs (Agents)

The vast majority of TMCs (even the larger ones) still rely heavily on supplier income despite what they may say. Could you survive and thrive on what you pay them? I don't think so. There are ways and means now to get the definition of these 'incentives' changed so they are not included in any corporate deal. Agents have needed to do this in order to fund central and associated costs plus earn sufficient ROI.

BLOG COMMENT - Government Buying

I wonder why it is that Governments buy so very badly? Is it that they want to be so straightforward and politically correct? Or is it that they know no other way to buy? I played a major part in winning an enormous UK government contract and I still persuade myself that I do not want the answer. I am as near as you can get into being in denial as you can without being blatant about it and it makes me feel bad. The process is difficult. In fact, when you get the invitation, the first thing you feel urged to do is throw it in the bin. Why? Because it is so frighteningly 'open' that it discourages one from bidding in case you expose all your benefits to competitor scrutiny. So bad that you fear that following such a track will lead to ultimate demise! You see you have to bite the bullet and bid. Yes, they have processes and yes, they do have disclosure laws but YES, there are ways around this. Governments are complex and very political. they need to be seen to be following processes despite their fear of ridicule, which is why you need to feed them what they need rather than what they want. So bid with impunity. Just provide with integrity. Then you will be OK.

BLOG COMMENT - Buyers and airlines

The Bald airline facts about business travel. 1/ In the main companies will not mandate travel i.e. they will not say ‘you must use this airline’. They will ask you to but very rarely will they mandate it. It is not in global company nature to do so. 2/ It is practically unheard of for corporations to insist (and follow through) on their travellers using their loyalty miles for business purposes. This has a bearing on fact no 1. 3/ If a corporation is told by a national airline that they no longer have a deal then at least half of their travellers will still fly on that airline. 4/ Buyers may bluster and dictate to airlines but they seem unable to do so in their own business. Procurement is very low in the political pecking chain of any corporation. Internally people may endorse procurement tacitly but not authoratively. 5/ Whilst this situation remains it will be very difficult and perhaps foolhardy to direct connect with just one major airline. I wonder how long it will take before somebody calls the buyers bluff.