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.
Showing posts with label travel strategy. Show all posts
Showing posts with label travel strategy. Show all posts
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.
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?
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