What is the biggest issue that stands between a policy and its successful delivery? Is it a lack of knowledge or ability in order to create one? Is it uncooperative or unable suppliers or intermediaries? Is it poor uptake or availability of appropriate technology systems? Or is it simply that end users either cannot or will not comply with edicts and have ways of getting around them?
Depending on your own experiences you could say one, some or all of the above but I think you might be missing something even more important. What is this something? It is what I call the three ‘P’s of internal Politics, Procedures and Processes and these have nothing to do with suppliers, intermediaries or individual travellers.
I have seen so many companies invest huge resources and money to create detailed and potentially rewarding travel programmes only to waste much benefit due to the three ‘P’s. Many of them choose not to identify this as the cause as it would not be considered ‘Politically’ correct to do so especially as the issues usually start at board level. A shame really as board level is where any rectifying needs to start.
So what am I actually saying? I believe that internal politics, inflexible procedures and lack of communication processes are the biggest road blocks when it comes to the delivery of a negotiated and delivered travel programme. I am also saying that non compliant travellers are not the biggest villains, it is more likely the messages they are receiving (or in some cases not) from much higher up the business chain of command.
Taking a closer look at any company’s board you can see why problems could occur. Rather like a herd of elephants you have the strong patriarch and around him a chain of command with different interests and abilities. Again, like any herd there is a fair amount of head butting and scheming going on. They all represent different interests from finance to sales, operations to procurement and some hold more sway than others.
Eventually these ‘band of brothers’ agree a policy. But do they really? You can be certain that there will be winners and losers but when it comes to something as emotive as travel they seem less inclined to feed their solidarity down the line. In some areas there can be a visible lack of zeal and that is all it takes to undermine a policy. Particularly when there are so many practical ways of getting around it.
Many companies end up with a policy that has been presented by procurement who are by no means top dog (or elephant!) at the board table, which is not satisfactory to all and then they have to communicate it to a sometimes incredulous work force. This is where we come to the second closely linked ‘P’ of procedures. Who is allowed to say what to whom and what are the ‘P’ for processes for doing it. How much can you or can’t you say about your decisions? How much should you justify them? How much should you mandate them?
Let us say those wise old elephants have at least given tacit support to the policy. Who is going to sponsor it and keep on the agenda as the process develops? Who is going to go to senior directors and ask them to pull their folk into line? How are those messages going to transmit through a company that, possibly, apart from payroll has no appropriate method for these types of communication?
My message to corporations is a simple one. Sort yourself out at the top. Put into place procedures and processes and only then consider the creation of a policy that is going to be committed to and enforced across the whole employee base. This will save you more than any supplier or intermediary will.
Wednesday, February 15, 2012
Friday, January 13, 2012
CONTENTS
(To locate entries scroll down this page or through appropriate month shown under 'Blog Archive' on right hand column)
COMMENT
FEB A Travel Policy’s Biggest Barrier
JAN Low Cost Airlines - honeymoon Over?
JAN Travel Supply Chain Intelligence
JAN ASK me a QUESTION
DEC A Christmas Message
NOV A London Airport Solution?
SEP So Will Airlines go Direct Connect or Not?
SEP A Distribution Prediction
AUG Do we need another Industry Association?
JUL What the Customer Really Wants? – Part 1
JUL Who is the customer around here anyway?
APR Can TMC Brain Power Still Save Money?
MAR Combined Airline Deals – Good or Bad?
MAR Travel Evolution is not just about Technology – Right?
FEB Travel Services – Buying is just the beginning.
FEB Anybody Understand the Corporate Hotel Market?
FEB Getting back to basics with business travellers
JAN What happens when TMCs become GDS
JAN Better to never have something than see it taken away?
JAN The Evolution of Air Distribution – The Story so Far
JAN What does a hotel brand really mean?
JAN Direct Connect – The first significant skirmish in a long campaign.
DEC Loyalty Cards – What value?
DEC Christmas Distribution Story - 2
DEC A Christmas Distribution Story
DEC You don’t get ‘owt for nowt’ in travel distribution.
NOV BA dispute – Pride and promises
NOV GDS/Airline issue. Coming to a head?
OCT A Take on AA Distribution Issues
SEP Data Provision - Sounds Easy?
SEP Just how much would you Disclose?
AUG Can TMCs Really Influence Business?-Switch selling...
AUG Travel Compliance – So very easy.
AUG Can TMCs Really Influence Business? – Deals
AUG Can TMCs really influence business?
JUL Why small is becoming big in Business Travel.
JUN A different approach to TMC negotiations
JUN Global Travel Programmes – Delivering?
MAY Airlines and Travel Management Companies (TMC)
APR Airline marriages? Call for Jerry Springer.
APR Travel and the Environment
MAR Do academics understand the real world
MAR Is Government Buying Wisely?
MAR Who should buy travel? (Part two)
FEB Who should buy travel? (Part one)
COMMENT
FEB A Travel Policy’s Biggest Barrier
JAN Low Cost Airlines - honeymoon Over?
JAN Travel Supply Chain Intelligence
JAN ASK me a QUESTION
DEC A Christmas Message
NOV A London Airport Solution?
SEP So Will Airlines go Direct Connect or Not?
SEP A Distribution Prediction
AUG Do we need another Industry Association?
JUL What the Customer Really Wants? – Part 1
JUL Who is the customer around here anyway?
APR Can TMC Brain Power Still Save Money?
MAR Combined Airline Deals – Good or Bad?
MAR Travel Evolution is not just about Technology – Right?
FEB Travel Services – Buying is just the beginning.
FEB Anybody Understand the Corporate Hotel Market?
FEB Getting back to basics with business travellers
JAN What happens when TMCs become GDS
JAN Better to never have something than see it taken away?
JAN The Evolution of Air Distribution – The Story so Far
JAN What does a hotel brand really mean?
JAN Direct Connect – The first significant skirmish in a long campaign.
DEC Loyalty Cards – What value?
DEC Christmas Distribution Story - 2
DEC A Christmas Distribution Story
DEC You don’t get ‘owt for nowt’ in travel distribution.
NOV BA dispute – Pride and promises
NOV GDS/Airline issue. Coming to a head?
OCT A Take on AA Distribution Issues
SEP Data Provision - Sounds Easy?
SEP Just how much would you Disclose?
AUG Can TMCs Really Influence Business?-Switch selling...
AUG Travel Compliance – So very easy.
AUG Can TMCs Really Influence Business? – Deals
AUG Can TMCs really influence business?
JUL Why small is becoming big in Business Travel.
JUN A different approach to TMC negotiations
JUN Global Travel Programmes – Delivering?
MAY Airlines and Travel Management Companies (TMC)
APR Airline marriages? Call for Jerry Springer.
APR Travel and the Environment
MAR Do academics understand the real world
MAR Is Government Buying Wisely?
MAR Who should buy travel? (Part two)
FEB Who should buy travel? (Part one)
Low Cost Airlines - Honeymoon Over?
The other day I spoke to a friend who had always been a massive supporter of European low cost/no frills airlines. He looked pretty annoyed and moaned about the fact that many of the deals that used to be around no longer exist. He also could not understand why he now has to do a lot of the work for them such as online check-in etc yet pay for almost every extra you can think of. Why, he said should I do all the work yet more often than not have to pay an administration fee.
It seems to me that more people than just my friend are falling out of love with these airlines. One person put it quite emotionally by saying he felt ‘betrayed by these so called ‘people's champions’. Having been in the business for many years I was surprised that folk could believe that these airlines were working in anything else but self interest but I guess if one looks at some of their past marketing and newspaper publicity one might understand.
I have my own views on this sector of the market and, as he asked my opinion I gave it. This is what I said:
OK, this is how I think the low cost airline model works:
They start a route on the stack them high and sell them cheap basis. They cut their costs to the bone and undercut the prices of any competition from the big boys. This works for a year or two until they have got hold of as many passengers they can on that route. Then their problems start.
You see, like all business they need to generate increased year on year profits but where is that increase going to come from? After all, their costs have already been stripped to the basics. They struggle to increase passenger numbers because they have already cornered their share of the market. Also this share is being attacked by the major carriers who have adjusted their prices to compete on the same ‘net plus extras’ model.
So the only way to please their investors is to enter new markets (they are already established in the best ones) and get more money from existing passengers. How do you get more money from them? Well you check your stats, booking patterns, peak flights and increase fares on those services that are popular (good timings etc) up to the highest level they think they can get away with. Then they look elsewhere amongst ancillary costs such as credit card fees, airport service 'frills' and start charging for them. When the authorities catch up with those they feel unacceptable they move these charges to a grey area described as 'admin fees'. On top of this they try to sell their customers non airline services like car hire and hotels and then go to these suppliers and negotiate special commissions for giving them business.
So the issue is that they have to keep growing in order to keep their share price up. Great in the old days but hard now they are established. The only good thing about this is that, as a result prices are finally becoming much more transparent so you can choose what you are going to get i.e. you can pick poor timings on less popular routes and still pay a low fare. As mentioned earlier these companies sell through big time marketing campaigns which mean they will still offer the occasional mega headline grabbing deals here and there.
The thing to remember is these airlines work on the basis that they do not want you to pay less than the maximum you are prepared to spend and they are finding out what that sum is in all sorts of clever ways. One could argue they are more pirates than charities!
It seems to me that more people than just my friend are falling out of love with these airlines. One person put it quite emotionally by saying he felt ‘betrayed by these so called ‘people's champions’. Having been in the business for many years I was surprised that folk could believe that these airlines were working in anything else but self interest but I guess if one looks at some of their past marketing and newspaper publicity one might understand.
I have my own views on this sector of the market and, as he asked my opinion I gave it. This is what I said:
OK, this is how I think the low cost airline model works:
They start a route on the stack them high and sell them cheap basis. They cut their costs to the bone and undercut the prices of any competition from the big boys. This works for a year or two until they have got hold of as many passengers they can on that route. Then their problems start.
You see, like all business they need to generate increased year on year profits but where is that increase going to come from? After all, their costs have already been stripped to the basics. They struggle to increase passenger numbers because they have already cornered their share of the market. Also this share is being attacked by the major carriers who have adjusted their prices to compete on the same ‘net plus extras’ model.
So the only way to please their investors is to enter new markets (they are already established in the best ones) and get more money from existing passengers. How do you get more money from them? Well you check your stats, booking patterns, peak flights and increase fares on those services that are popular (good timings etc) up to the highest level they think they can get away with. Then they look elsewhere amongst ancillary costs such as credit card fees, airport service 'frills' and start charging for them. When the authorities catch up with those they feel unacceptable they move these charges to a grey area described as 'admin fees'. On top of this they try to sell their customers non airline services like car hire and hotels and then go to these suppliers and negotiate special commissions for giving them business.
So the issue is that they have to keep growing in order to keep their share price up. Great in the old days but hard now they are established. The only good thing about this is that, as a result prices are finally becoming much more transparent so you can choose what you are going to get i.e. you can pick poor timings on less popular routes and still pay a low fare. As mentioned earlier these companies sell through big time marketing campaigns which mean they will still offer the occasional mega headline grabbing deals here and there.
The thing to remember is these airlines work on the basis that they do not want you to pay less than the maximum you are prepared to spend and they are finding out what that sum is in all sorts of clever ways. One could argue they are more pirates than charities!
Thursday, January 5, 2012
Travel Supply Chain Intelligence
It has never ceased to surprise me how little time the chain studies its partners, clients and perceived competitors. They are all intertwined in activities right the way from the traveller to the front end supplier yet history demonstrates that they do not understand the people they depend on or those they want to replace.
A good example would be say an airline that wants to replace a TMC or GDS which is quite topical at the moment. Now the black and white capability is there in the shape of enabling technology but the real world is in colour and of different shades and complexity. Technology systems are the beginning of the road not the end of it, an enabler not the solution. But some folks just plough on anyway and seem genuinely shocked at the push back
I am convinced this happens because the players have not set the right priorities into understanding all of the things the other components do. Instead they blindly follow their ‘ideal scenario’ strategy and attempt to bludgeon it into the marketplace. Sometimes this just might work in parts but the risk of fall-out is great with the potential of lasting commercial or competitive damage. They should also realise by now that the other members in the chain are anticipating their moves and building detours and opportunities around them.
These thoughts are not here to try and dissuade the chain from evolving and diversifying, after all that is progress. What I am saying instead is that this industry needs to understand itself and its component parts a lot clearer. For example, has any airline ever taken the time (and at the right level) to examine what it’s ‘partners’ do in detail? To sit down and better evaluate the chain reaction of planned strategy and thereby have answers to the issues that will surely arise? They might even find ways that benefit, or at least soften the blow to the rest of the industry.
The way some current players go about change is simply not savvy. They know what they want and charge at it, usually with disappointing results. A bit more thought, understanding, broader knowledge and early dialogue just might form a better basis for progress. And for heavens sake remember that the world has multi markets, technologies languages and cultures. Head offices in their ‘ivory towers’ in the USA, UK, Germany and The Far East can pontificate and plan as much as they like but to little avail if their decisions simply are unworkable elsewhere. Instead they can do major damage.
So my plea is to stop, think, research a great deal, understand the players/competitors better and look way beyond the first hurdle and towards the end-game. I still maintain that the major industry bodies should be driving this understanding. Perhaps if they had less back slapping, money making, selling type conferences and more distribution, supply chain summits they would make a bigger contribution.
A good example would be say an airline that wants to replace a TMC or GDS which is quite topical at the moment. Now the black and white capability is there in the shape of enabling technology but the real world is in colour and of different shades and complexity. Technology systems are the beginning of the road not the end of it, an enabler not the solution. But some folks just plough on anyway and seem genuinely shocked at the push back
I am convinced this happens because the players have not set the right priorities into understanding all of the things the other components do. Instead they blindly follow their ‘ideal scenario’ strategy and attempt to bludgeon it into the marketplace. Sometimes this just might work in parts but the risk of fall-out is great with the potential of lasting commercial or competitive damage. They should also realise by now that the other members in the chain are anticipating their moves and building detours and opportunities around them.
These thoughts are not here to try and dissuade the chain from evolving and diversifying, after all that is progress. What I am saying instead is that this industry needs to understand itself and its component parts a lot clearer. For example, has any airline ever taken the time (and at the right level) to examine what it’s ‘partners’ do in detail? To sit down and better evaluate the chain reaction of planned strategy and thereby have answers to the issues that will surely arise? They might even find ways that benefit, or at least soften the blow to the rest of the industry.
The way some current players go about change is simply not savvy. They know what they want and charge at it, usually with disappointing results. A bit more thought, understanding, broader knowledge and early dialogue just might form a better basis for progress. And for heavens sake remember that the world has multi markets, technologies languages and cultures. Head offices in their ‘ivory towers’ in the USA, UK, Germany and The Far East can pontificate and plan as much as they like but to little avail if their decisions simply are unworkable elsewhere. Instead they can do major damage.
So my plea is to stop, think, research a great deal, understand the players/competitors better and look way beyond the first hurdle and towards the end-game. I still maintain that the major industry bodies should be driving this understanding. Perhaps if they had less back slapping, money making, selling type conferences and more distribution, supply chain summits they would make a bigger contribution.
Tuesday, January 3, 2012
ASK me a QUESTION
If any or all of you have any questions that you think I might be able to answer then do not hesitate to ask either via the response facility below or direct to me on mike.platt@mpaassociates.co.uk
If I can I will give an educated and useful response. If not then I will tell you so.
Should you not want to share a discussion then simply email me and mark it as confidential.
No snags, no advertising no nothing. I just love travel and still want to contribute something if I can.
If I can I will give an educated and useful response. If not then I will tell you so.
Should you not want to share a discussion then simply email me and mark it as confidential.
No snags, no advertising no nothing. I just love travel and still want to contribute something if I can.
Friday, December 23, 2011
A CHRISTMAS MESSAGE
To all my readers: Yes I know you are out there because I read the stats!
No, you are not the best at giving me feedback so please have a go in 2012 as I really miss what you have to say and it keeps me writing.
Christmas Wishes: Oh American Airlines will you please grow up and
stop being so self destructive.
Can members of the travel supply chain think of better
and possibly easier ways of making bigger profits than over the
bleeding bodies of their partners and customers.
Finally? Have a great Christmas and New Year and I look forward
To trying to keep you interested and amused next year.
One last ‘story? I flew to New York last weekend and found myself in Club Class and directly facing one of the most attractive woman I have ever seen. We got talking and I asked her what she was doing.
She explained that she was going to speak at a very large womens society the next day about the sexes and planned to debunk a number of fallacies that people had about certain nationalities. “Give me some examples” I asked and she did.
It is not true that French men make the best lovers. It is the Greeks.
The most well endowed men are not African Americans they are native Indian Americans.
Finally the men most likely to talk women into sleeping with them are not Italian they are the Irish.
“Fascinating” I said. “What is your name” she asked.
“Tonto Papadopolous” I replied. “But my friends call me Paddy”
No, you are not the best at giving me feedback so please have a go in 2012 as I really miss what you have to say and it keeps me writing.
Christmas Wishes: Oh American Airlines will you please grow up and
stop being so self destructive.
Can members of the travel supply chain think of better
and possibly easier ways of making bigger profits than over the
bleeding bodies of their partners and customers.
Finally? Have a great Christmas and New Year and I look forward
To trying to keep you interested and amused next year.
One last ‘story? I flew to New York last weekend and found myself in Club Class and directly facing one of the most attractive woman I have ever seen. We got talking and I asked her what she was doing.
She explained that she was going to speak at a very large womens society the next day about the sexes and planned to debunk a number of fallacies that people had about certain nationalities. “Give me some examples” I asked and she did.
It is not true that French men make the best lovers. It is the Greeks.
The most well endowed men are not African Americans they are native Indian Americans.
Finally the men most likely to talk women into sleeping with them are not Italian they are the Irish.
“Fascinating” I said. “What is your name” she asked.
“Tonto Papadopolous” I replied. “But my friends call me Paddy”
Monday, November 21, 2011
A London Airport Solution?
I wonder if we will ever get one. Recent discussions gyrate rather like a manic tango. You know how it goes, striding forward only to come to a dramatic halt, a frenzied shake of the head, and then lunging back again.
Everyone with a brain in their head knows a solution has to be found. In truth many also realise that it is nearly already too late to stop the UK slipping down the major trading nations success chart. One thing for certain is the UK should be ashamed of its current airport infrastructure and the inefficiency, inconvenience and downright embarrassment of it all.
Can you honestly see it happening anywhere else in world? I can’t. Even in the most heavily populated countries they still prioritise and act on making sure their airport infrastructure is prepared for the future. Some simply take the flack and build more runways at existing airports whilst some construct huge islands with fast city links. What do we do? We find solutions, discuss them, semi-commit and then back off for socio, environmental and/or political reasons.
Of course solving our air infrastructure crisis (yes it is one) will upset someone be they people, birds, voles or snails, that’s obvious. And of course it will take time which we are just about run out of but goodness me it has to happen. We all know that don’t we. Or there is the other option and that is give up our place as a major global, political and trading nation. Do we want to give that up and resign ourselves to being a second world nation?
So what are the options available to us? There won’t be any more new ones cropping up so, if we do anything it will be one of the following:
Island in the estuary. Great idea and it has been done before in places like Hong Kong. Remember them? They had this overcrowded airport in the city (sounds familiar?) so they started from scratch far enough away to get the lowest resistance and then built a superb city link by road and rail. It cost them mega money but hey it provided jobs, appeased the majority and ensures they have few problems in future.
Expand one of the existing London airports. I guess it would work…in the short term. But look at the charade that was the last attempt to put that much needed extra runway at Heathrow. What a waste of time and money that was. A ‘no brainer’ that turned out to be nothing of the sort. We can be so darn democratic in this country that we stifle the life out of ourselves.
The third option is the one I favour. Why? Because I think it is the only one that could possibly drag itself through the mire of politics and protest. This solution is to turn the airports of Heathrow, Stanstead and Gatwick into one mega hub. I have been advocating this for years but let me remind you.
The key fact that will never change under the current structure is that the vast majority of people want to fly out of Heathrow. This is because of its proximity to London, its interlining capability and its catchment area. Gatwick and worse Stanstead will never match it, unless they link up to form one big seamless interlinking airport. This would need superfast links from each location and its terminals to the other parts of the hub.
Is such a solution practical and what good would it do? Yes, I think it could work. I am not an engineer but looking at what has been done with superfast rail links and channel tunnel connections to London I think it can. What it will allow is the efficient usage of existing runway space plus a spreading of the Heathrow load across a bigger base. The customer will be able to transfer airports as though they were moving from one terminal to another. With minimal hassle and maximum speed. In effect each of the three airports become a ‘terminal’ of the new ‘Super Airport’.
I put this forward again as a compromise not a solution. The solution is obvious and would involve building an airport in the Thames Estuary. The compromise solves a short/medium term problem but will ultimately require new runways being built. Although we could do nothing I suppose. Or is that really an option?
Think I am nuts? Well tell me why and I will publish it. Same goes if you agree.
Everyone with a brain in their head knows a solution has to be found. In truth many also realise that it is nearly already too late to stop the UK slipping down the major trading nations success chart. One thing for certain is the UK should be ashamed of its current airport infrastructure and the inefficiency, inconvenience and downright embarrassment of it all.
Can you honestly see it happening anywhere else in world? I can’t. Even in the most heavily populated countries they still prioritise and act on making sure their airport infrastructure is prepared for the future. Some simply take the flack and build more runways at existing airports whilst some construct huge islands with fast city links. What do we do? We find solutions, discuss them, semi-commit and then back off for socio, environmental and/or political reasons.
Of course solving our air infrastructure crisis (yes it is one) will upset someone be they people, birds, voles or snails, that’s obvious. And of course it will take time which we are just about run out of but goodness me it has to happen. We all know that don’t we. Or there is the other option and that is give up our place as a major global, political and trading nation. Do we want to give that up and resign ourselves to being a second world nation?
So what are the options available to us? There won’t be any more new ones cropping up so, if we do anything it will be one of the following:
Island in the estuary. Great idea and it has been done before in places like Hong Kong. Remember them? They had this overcrowded airport in the city (sounds familiar?) so they started from scratch far enough away to get the lowest resistance and then built a superb city link by road and rail. It cost them mega money but hey it provided jobs, appeased the majority and ensures they have few problems in future.
Expand one of the existing London airports. I guess it would work…in the short term. But look at the charade that was the last attempt to put that much needed extra runway at Heathrow. What a waste of time and money that was. A ‘no brainer’ that turned out to be nothing of the sort. We can be so darn democratic in this country that we stifle the life out of ourselves.
The third option is the one I favour. Why? Because I think it is the only one that could possibly drag itself through the mire of politics and protest. This solution is to turn the airports of Heathrow, Stanstead and Gatwick into one mega hub. I have been advocating this for years but let me remind you.
The key fact that will never change under the current structure is that the vast majority of people want to fly out of Heathrow. This is because of its proximity to London, its interlining capability and its catchment area. Gatwick and worse Stanstead will never match it, unless they link up to form one big seamless interlinking airport. This would need superfast links from each location and its terminals to the other parts of the hub.
Is such a solution practical and what good would it do? Yes, I think it could work. I am not an engineer but looking at what has been done with superfast rail links and channel tunnel connections to London I think it can. What it will allow is the efficient usage of existing runway space plus a spreading of the Heathrow load across a bigger base. The customer will be able to transfer airports as though they were moving from one terminal to another. With minimal hassle and maximum speed. In effect each of the three airports become a ‘terminal’ of the new ‘Super Airport’.
I put this forward again as a compromise not a solution. The solution is obvious and would involve building an airport in the Thames Estuary. The compromise solves a short/medium term problem but will ultimately require new runways being built. Although we could do nothing I suppose. Or is that really an option?
Think I am nuts? Well tell me why and I will publish it. Same goes if you agree.