Well, That Just About Sums it Up For Travel…
Posted by murray in Latest News on June 5th, 2009
Now everyone really has lost the plot. Credit card companies have decided that the best way to get their money back, after a tour company collapses, is by simply re-charging whoever sold the holiday in the first place. In other words, you buy a holiday from Expedia or even Joe Blogs Travel and the tour company goes up the Swanny, the punter gets his money back from the card company who in turn recharges the travel agent. As that Meerkat would say, “Simple, Huh?”
Not quite. Agents are not mega-rich people who have fistfulls of cash floating about the place. Secondly, in case anyone hadn’t noticed, they are agents. That is, they flog the holiday and pick up (hopefully) a (small) commission as a result. Recharge any agent for a couple of £5,000 holidays and you will simply bankrupt every agent in existence. Overnight.
Coupled with this assault on an already fragile sector of the industry, IATA is thinking about taking money every two weeks rather then monthly. The agent will barely get enough time to get the money off the client before airlines, operators, Uncle Tom Cobbly and all are jumping up and down like startled rabbits demanding the agent pays over everything they have including two pints of blood and a small mortgage “just in case”.
Trust has gone with the agency system (I hate the term “model”, let’s deal with the real thing). In any shape or form, online or offline.
Decisions need to be made and the most fundamental one is if airlines and operators wish to distribute through any - and I mean any - kind of agency type arrangement. It matters not if they are on or offline.
What benefits do travel agents, of any ilk offer? Without them, you have to do it yourself. Large operators have the ability to do this and so too would major airlines - at least those airlines that see the UK as a main market. Airlines do have an issue. They do not want to pay for distribution, but at the same time do not want to have to incur the cost of doing it themselves. Legacy airlines view the Easyjets of this world with envy. Easyjet manages to sell their product almost exclusively online; but then again you can do that with a simple and restricted product range that does not need to interact with anything or anyone else. This is not the case with legacy airlines - or indeed, any airline which has a global network - or anything resembling a network, for that matter. As soon as you need to interact, there must be a mechanism to do this and the GDS booking method does this very well. Over time, airlines have, however, lost the ability to network well. They have drawn in their horns and really only want to sell their own product; or at best, their alliances’ product. Fine, perhaps, if you are in the Star Alliance or Skyteam - but Oneworld? BA has no-one left to interact with on anything remotely resembling a “world class” alliance.
The trouble is, when airlines are required to interact, unless an agent can accomplish some tidy footwork, these are invariably for big ticket journeys - valuable top level income which airlines really do need at this time. So, legacy airlines do not want to do the fiddly stuff, they do not want to pay agents to do it and they want the money for it yesterday - but they desperately need this top level income. They want their cake and they want to eat it.
Large tour operators have a love/ hate relationship with agents. Some, such as Thomson, have their own de facto chain of shops and have the resources to “train” staff (ie teach them how to flog their product over anyone else’s). But even Thomson are not TESCO - they do not have a shop every so many miles, so they need to cover the gaps - and the agent does this job for them. Like airlines, however, they do not want to pay for this distribution. Smaller operators are the one group who do use agents and do pay them for referring business; the trouble is, all the small operators together, do not provide a wide enough offering to pay for and maintain a high street presence. The small operator can go online, yet here he faces the issue of reach and exposure; if one is a small operator offering mainstream resorts, then the cost of getting noticed on the internet can run into many, many thousands of pounds.
Now, let’s layer onto the above, the issues of bonding, regulation and now, the cost of even being able to take money off a client. The point is, no-one is going to sell something if they cannot make a reasonable return. Brewers tried this long ago - instead of saying “you pay a low rent and we make money by selling you beer” they said “That property is worth £5mill and we want 10% return from you - You can do what you like” Result: No pubs. Reason: Because there is only so much available in any one transaction. Each person can have a portion of that pie, but as soon as the dominant party wants someone else’s share, the system collapses.
The other reason agents are useful, is because they are retailers. They sell stuff and they sell in volume. The likes of Expedia and Travelocity sell travel and travel products. They are good at it, it is their speciality. AMEX sell business travel (so do I - Plug, plug - and my fees or low ‘cos I have a low cost base!!) they are good at it, they know what the customer likes and understands the customers needs. British Midland, say, run airline services - that is what they are good at. But wholesalers and especially “manufacturers” do not make good retailers - you do not see any DIAGEO shops about, do you? Many airlines have appalling customer service systems, often based in parts foreign, staffed by parrotts or the cheapest humans they can find, with little, if any holistic training. There are airlines, such as BA who have customer service facilities which are excellent, but this is the exception rather than the norm. Most low cost airlines even go as far as to discourage customer contact. The question remains as to how long this style of operation can last.
Agents are a useful intermediary, a foil, twixt client and travel provider. Not all travel, by a long chalk, is simple. Some of it is very complex - not difficult, just complex - so there is a place for “technicians” who have an understanding of how travel works. People who know how part A bolts onto part B. Yes, tour companies and airlines could do this themselves but we come back to the training thing - or rather the total lack of any form of holistic travel training and that no-one with any nounce is going to train themselves for a business that pays rubbish money and shows little if any prospect of real wealth. Ultimately, this leads to “Bankers Syndrome” - as with RBS, one finds that no-one at the top knows anything about Banking. And we all know what happened next, there.
This all leads down a path that leads to a lose-lose situation. As the returns get less, there are increased attempts by various bodies to regulate. More regulation leads to greater cost on the on hand and so even less return on the other, a deep spiral that so encourages the darker side - and with the presence of the internet meaning that one can distribute on a global scale with virtual anonimity - it is easy for this dark unregulated side to take over. Large operators lose their incremental sales and airlines lose their ability to market their high end products - unless they wish to do everything, and I mean everything, themselves.
So the big question remains and before anyone in the travel industry goes any further, it must be answered: Do travel providers wish to do everything for themselves - or do we retain the off and online agency style distribution system? If the answer is no, then fine - get on with it. If the answer is Yes, then the agency system must be allowed to be profitable - and must have a voice that is respected and acted upon by the suppliers. If things just continue along the same road as now, we will see just a few online retailers and a few high street retailers (probably a combination of both - eg Expedia shops) and these retailers will simply dictate who can sell what, for how much and on what terms. Can’t happen? Well, it has in many other fields - Grocery, for example, or computers or DIY….
Murray’s Competition - Part 1!
Posted by murray in Latest News on May 29th, 2009
Not relevant at all - My eldest at Niagra Falls.
So, let’s put it to the test.
The challenge is to fly around the world for the least amount of money. There are some rules:
1. The trip must include a touchdown in Europe, Middle East, Far East, Africa, Indian sub-continent, Australasia, Northern and Southern Continental America. You can start from where you like, but your start and finish must be at the same airport.
2. The itinerary must be fly-able. For example, if you connect from a legacy carrier to a low-cost carrier, the connection must be practical.
3. Backtracking and anything else is allowed.
4. There is no time limit, but extra points awarded for the fastest trip.
Prizes - we need some. So would any airline or hotel group who would like to contribute some free flights or hotel nights, please let me know. Now would be good. So, won’t cost you any money just some flights and hotel nights! And a lot of Twitter/ Social Networking promotion.
These are the basics. So, before we launch away, if anyone has any comments suggestions or tweaks, let me know now. The prize, by the way, would be for the cheapest workable itinerary - you don’t actually have to fly it (unless an airline will sponsor such a prize!)
Why Airlines and IATA Need To Tread Carefully…
Posted by murray in Latest News on May 16th, 2009
Airline revenue falls, BSP revenue falls - BSP being, amongst others, the monthly income payment that airlines received from travel agents - panic sets in. So, what are we talking about? The figures do look big - BSP churns some 240 billion dollars worth a year; a fair chunk of that being from the 58,000 travel agents world wide. IATA-BSP lost, last year 85 billion in bad debts - horrors! Well, not really when you bear in mind that this represents some 0.35% of turnover (an expression used loosely). Now, airline revenue comes mainly from BSP - some 80% to be exact - which means that travel agents - online AND offline - still represent the main source of airline income, despite the increasingly despotic attempts by airlines to drive traffic away from the various agency networks.
Of this BSP income for the airlines (and about 95% of the world’s airlines are in IATA BSP - and certainly nearly all of the “legacy” carriers) 80% of the UK airline income is generated by just 140 of 1,300-ish UK IATA agents - and half of it by just 30 agents (thank you, Travel Weekly).
The knee jerk reaction of airlines is to demand that BSP (and so, agents) start paying every two weeks rather than monthly, as they do now. In other words, the airlines get less money but on a more regular basis. Failing that, in order to “stop the bad debts” (which is running at, you will recall, 0.35% of turnover) IATA BSP wish to impose bonding on everyone who looks even slightly less than gold plated. This, at a time when bonds and loans are, of course, very easy to come by.
From this, we can deduce that airlines have clearly failed the marshmallow test. Take now! And hang the consequences! Well, What are the consequences? Agents, especially, will remember British Airways arrogantly proclaiming that they “Did not owe agents a living” whilst taking away the commission paid on airline tickets. Fine, said agents, who went away and in the words used in a PhoCus Wright study promptly “….. responded strategically, tactically and most of all aggresively to adapt, survive and succeed” in other words, showed the airlines two fingers and got on with the job of selling travel.
The worm turns, agents (and remember I mean online as much as any other; even Expedia and Travelocity are agents) do not owe airlines a living, either. There is a mutual dependency - the likes of Travelocity are very good at what they do, retailing (or shall we say, distributing content) whereas airlines are supposed to be good at what they do, which is shipping people from A to B. Travelocity et alia make a profit; airlines don’t - which says an awful lot about who actually owes whom, what. Airlines (and to a greater or lesser extent IATA) still ponitificate Canute-like about what they are going to do. Actually at the moment, they can. Just. Where they are taking their eye of the ball, if they ever had it on the ball, is by not watching those BSP statistics. That 50% of their income is dependent upon 30 agents - such as AMEX -at present.
Any precipative action, such as going to two week payments may well have exceedingly uncomfortable side affects, say 80% of their income coming subsequently from 30 (or less) agents. Why is this? Simple - “Divide and Rule”. Airlines could only pontificate and rule the roost because they had a wide and diverse distribution network through many channels, they did not need to really listen to any one product distributor simply because there wasn’t one. Yet, since the demise of commission, there is - or rather there are 30 of them and as they impose more onerous restrictions that number will fall, or rather that 30 will control and ever greater share of the income pie - and that is when you really start to sweat.
You do not need to be an expert to see this all too clearly. Where do you buy your daily bread? Yes, TESCO, Sainsbury or ASDA . Where did you buy your last PC? Yes, PC World or DELL. Your last thingy for fixing that irritating squeak? Yes, B&Q, WICKS (or Halfords, depending). Take the old IBM story where arrogance spawned Microsoft. Or just take a look what has happended to the local pub, even. All these are examples of what happens when people take a short term view by people with a short term interest. Airlines are lining themselves up, very nicely, thank you, for exactly the same treatment. They will soon be told what they can sell, where they can sell it and for how much. They behave or wallop! All that valuable, say, BA, trans-atlantic traffic goes to AA or UA or VS.
Of course, airlines say that they “talk” to the agents (Talk rather than “communicate with” - of course) but to whom are they are talking? Yes, you are right, to that 30. And that 30 have their own agenda, which is, of course, to control 80% or 90% of that BSP revenue, not 50%. I do not know what the critical mass is, but it cannot be far off. So, AMEX becomes the air travel business’s answer to B&Q. If you are an airline, you do what AMEX says, or you get nothing. Up to you, of course. Yes, they can distribute themselves and will have to. What we have here, however, is a service providor, a maufacturer, trying to retail and as I say, retailers are a lot better at retailing than manufacturers. Just look down the Times Rich List. Even Old Beardie once answered the question “How do you become a millionaire?” with “Start with 10 million and open an airline”.
So, airlines need to think things through (they won’t) and so does IATA (it can’t - think, that is). IATA is a body which believes that Stalin’s way of doing things was rather soft. And Airlines, like Sir Anthony Eden, still think they rule an empire. Things have changed dramatically over the last ten years or so and will indeed continue to do so. It is just intereting to note that the very architects of that change process, those that pulled down the orginal edifice with first checking to see what still needed support, now find themselves in turbulent air whereas those they lectured about that change, the agents, have quietly and efficently got on with the job. Airlines and IATA can talk the talk, they just cannot walk the walk.
Saving Money on Travel
Posted by murray in Latest News on May 12th, 2009
Once upon a time I wrote an article on this subject and the unabridged version, for those that really want to have a go at saving money on travel, is available on my website. This is the short version to get you thinking.
Fact: The quickest and esiest way to save money on travel, is by not travelling in the first place. Recently, many firms have found out that, since they cut back on travel, they have not gone bust, the company has continued to function and life, as such, carries on. Do you really need to be there, I ask. Let’s face it, the East India Company managed to trade from Calcutta back in about 1700 and frozen to death when a trip for a meeting would have taken the best part of a year. Yet they traded, and traded very well. We talk, now, about living in a “Global Economy” - yet we have always lived in a global economy, even the Romans spent a lot of time trouble and effort keeping their trade routes open and even fought a nifty little war with the Persians over a matter of rights of access. So, don’t pretend the “global economy” is something new.
How did they manage, we wonder, without travel? Simple. They delegated. They made sure that the people in far away lands were told precisely what to do and what was expected of them and if they did not perform then they got their head chopped off. The means of motivation has changed just a tad over the years, but the principle remains the same. So, do you really need to be there?
Fact: When you call the travel agent or go to book online 99.9% of all opportunites to save money have been lost. Let me make this clear, saving money has nothing at all to do with which company you use, if you use self booking tools, have a strict policy about only travelling in economy, drink three cups of coffee before breakfast or have a policy checker living in a little office on the thrid floor whose name is Frederick. It is to do with thinking about why you are travelling, could someone else who may be going a few days later or earlier, deal with it? Will the journey you are taking produce a measurable, tangible benefit for the company? Or are you just travelling because it seems like a good idea? Believe me, I know some very senior managers who have saved a lot of money by blocking people going to, say, conferences because the only reason that the intended travellers could come up with was “Well, we ought to be there”.
Here is another thing - “We” - not just “I”. There are still companies who have to travel in multiples of 3 - or even 2 - for no other reason than “two people always go”. At the end of the day, it is not the travel that one needs to look at, it is the why that travel was generated in the first place. In my article I suggest that what you should do, is to take at random, three or four travel “events” and get whoever went to write down the net tangible benefit the company received from those events. Let’s see it in hard cash.
There are, of course, things that you must travel for, system breakdowns, for example - but even here, if there are a lot of these, the answer lies not in trying to shave off £10 from a round trip to Delhi but in looking at your kit and finding out why it breaks down so often.
Many look closely at the expenses of a trip, at systems to closely monitor those expenses. Many look at their flight costs and use all sorts of techniques to analyse their travel costs and produce reports to discuss with airlines special deals. What I say is don’t bother. It’s pointless. UNLESS you first look at the reasons behind each travel event - because unless that travel event can produce a hard nosed benefit for the company, then even £1 for a flight is £1 wasted.
Just a thought!
Why Travel is Failing it’s Public
Posted by murray in Latest News on May 5th, 2009
After writing about stabiliser, which may be a solution to the ills we face, we should take a look at the problem. Here, I am thinking about the recent collapse of Freedom Direct and wish to pose some questions as well as areas where travel is clearly failing to provide reassurance.
Travel is a funny old world and comes complete with it’s own language, it’s own sayings and it’s own way of doing things. In many ways, it is unique; one of which, is that action to any request is usually required now. It’s no good getting around to sorting something out next week, if the client is stuck at Amsterdam airport and should be in Paris. The trouble is, the travelling public are simply not au fait with travel’s unique language and foibles. What is clear, however, from many of those that booked on Freedom Direct is that they are genuine folk from all walks of life and not all from a strata of society that can grasp the basics of rocket science in 10 seconds flat.
One thing the EEC managed to bring was chaos out of order and between them, the fumblings of HM’s Grateful Government, Trading Standards and the FSA, they have managed to create an impenetrable forest of systems and procedures which leave even travel agents dazed and confused. Heavens knows how Jo Public is supposed to understand it - so in turn, Jo Public is left dazed, confused and above all, angry. Very angry.
What do we need?
1. An understaning of what can happen if a modern agent goes down. In the past, we have had to deal with operator crashes and airline failures, where things have, on balance, been fairly clear cut. There is a side issue of bonding of scheduled airlines, but that is a debate for another place. We have had travel agents go down but what we have not seen, is large-ish online agents go down. What we are not prepared for is, say - What would happen if Expedia went down? Or Ebookers? This can never happen, of course. Just like Rolls Royce cannot go bust or Coca Cola cannot make a major cock-up with bottled water or the banking system cannot fail. So let’s get real, can we cope with a major online failure? No. The powers that be need to stress test their systems now.
2. A clear route map for those in trouble. ABTA deals with their bit, the CAA theirs and if one is lucky, another agent comes along and tries to pick up the pieces. Trading Standards could not give a rancid roadkilled rodent, the Financial Standards Authority now holds, in the eye of the Public, about as much respect as one may give, say, a small piece of green goo and the credit card companies try and fob people off by telling Jo Public they should claim from ABTA, the CAA or a little man that runs a road side cafe just off the A34. In his blog, Alex Bainbridge suggested that we (I hope, meaning the travel industry) should make more of an effort to help those who get into trouble, at least to evaluate their booking paperwork and point people in the right direction. This, he suggests, may be a task that could be undertaken by the newly retired or the newly unemployed, though I think the former may be better - in their circumstances, Jo Public, I am sure, would feel better if they were asking a “wise old head” .
3. Make sure that such systems that do exist, work. Certain firms bask in their membership of ABTA. Yet when the chips are down, they seem to forget this. ABTA, inter alia, winds up having to beg, cajoal, shout at and bang heads together in order to make the system work. This is not good. If you accept the mantle of respectability any upright trade body holds, one must act and abide by the precepts that mantle gives - and at all times. And especially when the proverbial hits the fan. One hotel booking company I saw in passing, displays ABTA membership on its front page - even a travel industry award - yet you have to route around to find the number. That said, it is an improvement. Bonding is the big issue. Yet who is bonded and for what? To whom? IATA bonds agents, but that is only to make sure that the airlines, not Jo Public, get their dosh. Advantage bonds agents for their CAPS (a direct debit system for agents to pay the tour operators) which indirectly holds a fair chunk of money which can help Jo Public. ABTA bonds, the CAA bonds - the list goes on.
4. Explain in simple English and keep procedures simple. The travel business needs to learn English and a version of English which all can understand. This is, of course, closely tied into number 2, for I have heard it said that instructions on what to do and how to do it, have been issued by all sorts of people - but a lot of it is in travel speak; starting with “a package holiday” - very few, outside (and by all accounts, some inside) the travel industry understand what a “package holiday” is and more importantly, how it is presented to them. People have received a travel agents account for, say an Easyjet flight, yet that money has been debited direct from the clients card by Easyjet, not the agent - we in travel know what is going on, but as far as many are concerned, they are wondering how Easyjet has got their credit card details (Easyjet have done nothing wrong, by the way) Since the demise of ABTA as the “WYSIWYG” one-stop-bonding-shop, Jo Public has to become a travel agent - and quite a skilled one, to boot - to work out, even, whom to call first. It is no good writing reams about catergory this and category that - asking a member of the opublic to see if they hold a holiday booking where Freedom Direct “….acted as agents for other ATOL holders” is the same as asking me if I could go and fix the CERN proton speeder-upper, thingy, device. Keep it simple and clear.
5. Restore Honour. Very important. Company fails and suddenly, up pops the same outfit under a new guise as if nothing had happened. Not good enough. If you fail, you fail. Certain firms have failed and some people treat such failure as no more than an occupational hazard. This is, from an industry point of view, less than constructive and demonstrates a total lack of sensitivity. Those that fail should be required, freely and voluntarily, to help sort out the mess. To man the telphones, to explain. The trade bodies that do exist, do not have enough staff to cope with big, complex failures (see “stress testing”, passim) but what they should have - what we in the industry should have - is a voluntary system that can click into place to, at least, explain to those that have been caught up, where they should go for help. If required, then those in the travel industry that do help (including the frontline troops of the failed company) should be paid a fair sum and such money should come from - and be part of - any bonding system.
6) Bonding should come, once again, under one body. For everything. The old stabiliser system was, effectively, a one-stop-shop. Though I bang on about getting back to this old system which worked, I also recognise that to do such may not be practical. We must, though, co-ordinate bonding under one body (ABTA would be the obvious one). Bonding must be complete and we in the travel industry must stop trying to find ways around it. One of the complaints about the old Stabiliser system was the high entry barrier and many of the larger operators objected to the large bonding sums required. People sort ways out - or rather -ways around it. Some even threatened to leave some trade bodies, if those bodies did not do things their way. This was and is, despicable. The level was high because firms were dealing with large sums and had low margins. Those large sums (as I have said before) would be a hard working famillies biggest single annual outlay. Protection for that money, that outlay, is not something that should be “got around”.
The above may not be a pancea, but it may be a start. As we have progressed the road of regulation since 1992, we have branched out, turned around and that wide open motorway has withered to become tiny lanes through the backwaters of the industry. We do not need more regulation, or laws or instruction. The pieces of the puzzle are already on that broad and open table, we just need someone to fit them together. To understand them and to translate them for a public whose respect and tolerance for an industry that was once hailed as a beacon of self-regulation, has sunk beneath a mire of verbage and confusion to a shameful level.
Getting Travel Stable
Posted by murray in Latest News on May 3rd, 2009
I don’t really “do” holidays. I used to, but nowadays I just stick to business travel. It’s easier and involves none of this reasearching and quoting only to find the client has gone off and booked somewhere else ‘cos it was n pounds cheaper. Fine. Do your own research or get someone else to put in quite a few hours work for nothing.
The failure of Freedom Direct heralded something new, that being an internet travel company going down the tubes. Why this is new, is because, unlike days of yore, there is no immediate ability to achieve face to face contact - something which clients who stood to lose their holidays would much prefer to have. If a tour operator went bust, you marched off down to your travel agent and were able to talk to someone. You could get some sort of satisfaction from knowing that a real human was dealing with your plight. An internet travel outfit may be miles away from you, even in another country and there is no “local” shop to go to. True, people used to book direct before the internet, but these were with companies whose name you did see in the “local” shop and this brought a sort of comfort. The plight of some of those caught in the FD collapse is well reflected in the travel-rants blog.
So, what can be done to get some sort of stability back? A while back (pre-1992) and before the EEC started their usual business or running around, identifying problems that did not exist, analysing them incorrectly and then applying wholly inappropriate solutions, we had something called “stabiliser”. Stabiliser came about in the early years of mass travel after a company called Fiesta (and a few others) went bust in about 1960- something, stranding many holdaymakers abroad and costing many others their holidays, without any form of redress. Why this was important, was because the annual holiday represented a huge chunk of a families’ annual outgoings - in fact probably the largest chunk of peoples’ annual outgoing. Secondly, it was also realised that in holiday travel, you take vast great sums of money and sit on them for quite a while. Given the tight margins, occasioned first, by the desire to offer cheap holidays to a mass market to get the market going and subsequently the “Oh! Dear! We have done this cheap bit rather well and now can’t get the prices up to a realistic level” - wise heads at ABTA realised (rather than the Government of the time, realised) that something should be done about this - PDQ.
What they came up with was “stabiliser” and it worked like this: In order to sell an inclusive holiday, that is, a hotel and a charter flight and all the gubbins together in one lump, you must supply a bond. In order to put together all the gubbins, you must supply a bond. And everyone must be a member of ABTA. An ABTA agent may only sell ABTA bonded opertors and ABTA bonded operators may sell direct or only through ABTA bonded agents. And do you know what? It worked! You did not have to worry about anything, how your holiday was booked, with whom - it could be with a big operator or through a bloke who also ran a small fish and chip shop just south of Hull, if they were ABTA - you were covered.
ABTA policed this vigorously and with real teeth. Failure to perform according to the Code of Conduct meant fines - some quite hefty. No pay and you were slung out and bang went your livelehood. The public were educated that the ABTA logo meant what it said - security - and even though some notable crashes such as Court Line, Intasun and Exchange travel nearly broke ABTA, the trade rallied round and no holiday maker ever lost out. Ever. This was WYSIWYG protection.
“Hang on!” said the Office of Fair Trading, “This is a cartel!” Yes, it was but to so high an eminenence had the cartels’ credit been advanced that the Court of Appeal, in the mid-1980’s ruled that it was in the public interest. It was a cartel that you could, however, get into. It was not an exclusion because people were black-balled - you had to fulfill certain criteria. You had to have a set amount of fixed assets and or capital, you had to demonstrate profitablility, you had to acheive certain standards in your shop or operation, in terms of trained staff and qualifications, you had to make returns to ABTA showing your trading situation and ABTA could (and did) come around to you and check - and unlike, it seems, the FSA, the ABTA people knew what they were looking at. Indeed, even the House of Commons highlighted ABTA’s governance as a shining light of trade self-regulation. Yes, the system worked and it worked very well indeed.
There was a regional system of elected management within ABTA with elected members who were, in the main, our wise heads and some of the greatest luminaries of travel. Some vested interest moaned because bonding was a large cost, which was strange, because the level of you bond reflected how well you ran your business and how stable it was (IATA, at that time, before IATA became an outfit that makes the Stalin regieme look saintly, did pretty much the same thing) and the barrier to entry was high (why not?).
There was another issue that, once a tour operator was a member there was no guarantee that all ABTA agents would sell your product, just that they could . Some moaned that that was unfair. Here, the simple point remained, if your product was good, agents would sell it, if it wasn’t….
There was none of this nonsense about what is a package, what bit is covered by what, who is responsible for what and so on and so forth. One agency for bonding, one point of contact. It was simple, it was effective. Hell! Even the airlines liked it! For selling their discounted air products, they knew they were dealing with (even though they did not come under the ABTA banner as such) a stable and secure agent.
Anyway, we are stuck with the unholy mess we have now, because the simple maxim “If it is not broken, do not try and fix it” was for the EEC and others, to tempting to resist. We could look at a return to stabiliser but there is not, yet, the political will and it would mean telling Brussels to go in the general direction of away. Further, the wise heads of travel have in many cases passed over and what we are left with are people within travel whose motivation may not be so widely directed towards the good of travel in general; more to personal profit and interest. Travel lacks Statesmen; youth took apart the past and threw away the instruction manual. Progress is good and neccessary, new ideas are welcome and we need them, but perhaps we should not go from “new idea” to “full implementation” in less than 5 nanoseconds, not when we are responsible for so much, for so many.
Off Loading Costs
Posted by murray in Latest News on May 2nd, 2009
Here we go again! As airlines run out of profit and money, the hunt is on for more bits and bob’s they can pass on, so as to keep “low” prices. It seems to me that the time has come to step back and take a deep breath.
Airline travel is not a cheap item. An Airbus costs a lot of money, so does the petrol, the crew, getting it up, getting it down, getting it loaded, off-loaded. Hell! Even parking the thing up, costs a lot more than £2.40 at the local NCP.
What we have here, is a situation where someone wants to sell a service cheaply, which inherently costs a lot of money to provide. A situation where one now wants to charge a reasonable fee for something which over the years, one has spent many thousands of Dollars telling the world (quite successfully, as it turns out) people can have for next to nothing. And people wonder why there is a problem.
The latest bette noir is the GDS cost - the cost of getting the seat from the aeroplane to the client. This should be paid for by the travel agent (online or offline) and …. Whoooah! Stop there. The travel agent is not going to pay for anything. The client will pay, always has done and always will. What has come about over the years, is a price for a service whereby one has somehow managed to fool the various advertising standards people, of many countries, that the £1.00 (or $1.00) that appears on the promotional stuff is a valid figure. It isn’t. What we really have, is an industry where “transparency” is not a word which features in their dictionary. Air fares are not transparent. Exactly the opposite. Many charges appear after the “fare” and are buried under various codes which are meaningless to the travelling public.
But let us go back further. What are airlines about? What do they really want to do? The so-called “low cost” airlines are about simple A to B stuff, 2 hours or less, you get exactly what it says on the tin and no more. Fair enough. They do not need the GDS (that said, it is getting increasingly difficult to track them down. From a business travel agent’s point of view, sites such as “Wegolo” are proving increasingly invaluable as a “low cost GDS”). For legacy airlines, it is a different picture and these airlines need to decide what business they are in and if they, indeed, wish to continue in it.
A lot of business travel is not about going from A to B. It is about going from A to B and C, D and very often E as well. It does not all start from the home country and involves bits of the world which involve many agents grasping for their atlas (or, in modern terms, Google Earth). Here, the GDS is invaluable. This is where it does it’s job. The thing is, many of these flights involve going from airline to airline, changes of flight at various points en route and lot of general fuss and what-not. The key elements in being able to do this are: 1) The ability to interline and 2) The relevance of the “minimum connecting time” or MCT. The former allows one to mix airlines on one ticket and the latter, to regulate the time one needs to make a change of airline. If all airlines go “me only” (that is, come off the GDS and go it alone on their own websites), the all flights become just, what is known as, “point to point”. So, if you want to go from, say, Cairo to Dublin via Larnaca (’cos that is where the connection is) in old money, you get, on one ticket: Cairo to Larnaca to Dublin. The airline would interline (hence, on one ticket) and the MCT applies so you can be booked thorough and so, you make your “1 hour and a bit” Larnaca connection - most importantly, if the connection goes all pear shaped, you are able to get on the next available connection without having to worry.
BUT - in new money, that does not happen. You can only buy a ticket Cairo to Larnanca and then have to buy another ticket Larnaca to Dublin. Now, the MCT does NOT apply. You have to arrive at Larnaca, collect your bags, go through security, walk around to departures, re-check-in… and how long should you allow? If you miss your connection flight, tough. Buy another ticket.
Even more (airline) stupidity: This interline traffic is valuable stuff. Since, secretly, airlines have been dumping cheaper interline fares what is left becomes worthwhile traffic. You must have a GDS to book it and invariably (now! here’s the rub!) you need an agent to book your travel. Many airline reservation department, these days, are staffed by pretty clueless types from all sorts of places whose training is very precise (no “holistic” travel training) and if what you want does not drop in front of them straight away, they just can’t cope. Indeed, getting them to tell you their name can be a major thing…. sometimes.
The GDS, therefore, contributes a major and vital element, not only in airline traffic but generally, in making the whole concept of business travel possible. The GDS systems have been fiddled with by the EEC and various other bodies who are intent on making a very clever and practical system, which works into a cumbersome and pedantic system that doesn’t. It is not a question of viewing the GDS as a cost to be moved, the GDS is a lifeline which should be nurtured and developed (and in the case of Amadeus, just made to ruddy well work sensibly) - it is a cost that should be in the price of the ticket, because without the GDS, advanced air travel would simply not work.
I am not a number!
Posted by murray in Latest News on April 23rd, 2009
This low cost lead in price mania with airlines is doing no good. Indeed, we read about many people complaining that their initial price, to get from A to B, has mushroomed from £1 to £100 (or so).
Airlines, having offered a cheap fare, find that they are simply not generating enough money and fish around for something else. Scratchcards, charges for extra luggage (or just charges for luggage), no food, charges for a glass of water and, perhaps, charges for being able to breath air at 30,000 feet.
Where to go? Okay. I know that if I buy a cattle class ticket I know I am not going to get a big seat. I know that I will have to stand in a line and that the queue will move and that I will always wind up behind the single person who suddenly, at the last moment, really has 14 kids, three sets of Grandparents, enough luggage for a year in a far flung land and wants to know why he cannot take the goat in the cabin.
But that does not mean that I cannot be treated like a human being, more importantly, be made to feel like a human being. It does not mean that I have to be looked down on, herded and generally have things done to me that make air travel one of the worst experiences known to man; like shopping at IKEA.
I never said that I wanted to fly from here to there for £1. I am quite happy to pay a bit more - if I get value for that bit more. What does a cup of coffee and a nice sandwich cost? A bit of leeway on my luggage? A paper? A sweet at take off? A smile, even? An extra £5 a ticket an extra £10 or £15 a ticket? For me, I would prefer to pay that. Getting anywhere these days, by air, will cost me at least £75 - if not £150 or £200 so what is an extra £10 or £15 - if that extra money takes away the things that really winds people up and installs in those of us that have to travel in riff-raff, a little touch of sunlight.
What marketing outfit tells these airlines that people have to have fares for £1 or £5 - yet ignores the myriad of travellers who get very angry and frustrated by the eternal add-ons? Air Berlin is an interesting example, Air Berlin manage to do this: They manage to make you feel human, they do manage to smile (No, I am not get paid by Air Berlin - I used them, with my family, to fly from Stansted to Munich and I was very, very, surprised and pleased with their excellent service). They give you a decent sandwich, even a paper, gave me a (very welcome) bit of leeway on the luggage and did not look at me as if I had just appeared from a rather unsavoury manhole. Easyjet manage it (but may be going down the route of finding things to charge for) They still manage to smile, have a few humans about the place and certainly at Luton, have some customer agents who can show the legacy, Heathrow, lot a clean pair of heels when it comes to customer service.
So, my message is: Do not keep trying to find ways of winding up us punters. If you need an extra few quid to make life that bit more bearable, as far as I am concerned, be my guest. Be bold and be brave. An idea: If needs be, sell a ticket and then sell an inclusive ticket - An extra £10, £15 or £20 and for that you get to sit a bit up front and all the bits of leeway we had before - not £5 here or £2 there - it is not difficult to do. If more people book the extra, just move the curtain down the cabin a bit, I am sure that the airlines can work it out. And if they have to move the curtain all the way down the cabin, well - Who’s complaining?
Amsterdam - A view
Posted by murray in Latest News on April 20th, 2009
Well, I am back after three days in Amsterdam (where the tulips come from). KLM are really very good. I cannot explain why they are good, save that a) They had cheaper flights from Heathrow than anyone else did b) They seem to make a lot less fuss than anyone else does and c) I rather prefer the sky blue of KLM than the dark blue of others. Schipol is an interesting place. Lots of signs to the shops, more shops, things you may need which are really important, like the position of Orion in the night sky, more shops (perhaps, indeed, on Orion) and very few signs to things which they obviously deem unimportant like the Exit and the arrivals or departure lounges. Lesson number 1: if you have a humungous 6 runway airport then you also get humungous distances involved, such as from the plane to the baggage hall, for which trek you will need water, a good pair of stout boots, a sleeping bag and possibly, a tent.
We stayed at the Crown Plaza in the centre of town, mainly because they offered a good rate with breakfast. True, there are hotels that are advertised cheaper than this one, but they seemed to be miles away from anything remotely resembling, er… Amsterdam or were slightly dodgy places where you can get stoned, for free, on the way to bed.
I did not like the famed Red Light District (well, one has to, doesn’t one). It is dirty, smelly and full of drunken butchers from Luton singing “Hoodah hardah hardenhaden, Jimmy’s on his stag night, up the lads” and girls wearing something about “Helens Hens”. This is a very, very sad place with some very sad people in it. Oh! Yes! That reminds me, the language. You know I am sure there are no Dutch singers, I mean, with that awful gutteral language… Someone said, once, that Dutch is not a language, it is a disease of the throat. They were right.
Gastronomically, the place is a desert. There is no such thing as “Dutch Cuisine” which probably explains why they all seem to have bad skin. Certainly, the rubbish eating places (I don’t think “restaurant” is a viable word, here) that litter the place would have Gordon Ramsay not just shutting an eaterie down, he would shut the whole country down.
Crossing the road is a nightmare. In fact, you take your life in your hands walking out of the hotel. In the UK you have to contend with two sides of the road. Most of us can deal with that. Not in Amsterdam (where the Tulips come from, by the way) No, no, no, no…. you have to contend with the car bit, the tram bit and then the cyclist bit. It is the cyclist bit that is worst. Bicycles are driven by complete psycopaths who stop for nobody. The trouble is, you have no idea which bit belongs to whom and who is driving on what. I mean, you check the tramway and suddenly a taxi switches from the road and starts driving down the tramway, you check the cycle path - (or what you think is the cyclepath) and then along roars a motorbike. The only safe thing to do is walk in the road.
Coffeshops. Dumps. Full of rather unsavoury people doing rather unsavoury things in rather unsavoury surroundings. Avoid these. Oh! and Fashion has been abolished in Holland (Well, what does one expect from a country whose contribution to the world’s catwalks is, er……. clogs)
Amsterdam (where the tulips come from) lacks a “buzz” which you have in London or Paris, Prague or New Yoik (even Brussels - and that’s saying something!). There are redeeming features to a trip, here. Like going to the Tulip Gardens at Keukenhof. These are truly stunning when in full season. Take a tip, though, book a trip from your hotel, do not try and DIY it. You queue for the bus, then for the tickets, then to get in…. Zaansche Sands is worth a trip so is the Van Gough Museum. Public Transport is efficient and cheap.
So, all in all, worth a day or so to tick this capital off your list. Useful for passing through on the way to somewhere else (anywhere else!) but no big deal.
Apart from the tulips, that is….
Innovation in Travel
Posted by murray in Latest News on April 15th, 2009
We have these great competitions for innovation in travel. Up pops yet another application for some soft fruit named communication device or for a gizmo that is sold complete with a child of 6 to show you how to work it or some really clever add on for a ZX54 website with a section zappo thingymajig that is very popular in the lower regions of Southern India - or something that allows me to call Mars from 32,000 feet. Great. Fantastic. Wake me up when someone works out how to get an ipod to make a real cup of tea.
After the GDS (which, given that it is 1970’s technology is really rather clever) nothing much happened as far as the coal face of travel was concerned until… along comes Google Earth. Many looked at Google Earth and Ooooh-ed! and Ahhhh-ed! a bit but it is only lately that I have realised how clever it is - more importantly, how invaluable a tool it is for the travel agent. Here is something that makes life so much easier for the business travel agent - indeed all travel agents.
It can tell you which airport is closest to an address, which hotel is nearest to such and such an office or conference centre - and even (if you can get in close) how to get from the hotel to the office you want to go to. Is it a short journey? Yes, (you can say to the client) “Out the hotel, turn left, go along two stops of the dual carriageway, sharp right at the lights, 100 yards on the left - can’t miss it, guvn’or.” I am not saying this about somewhere local to Gerrards Cross, I am talking about a small factory, just south of Peking.
Just the other day, I had to get a crew to a private yacht (that’s the sort of client I have) near to Hilton Head - using Google Earth I was able to identify the airport - Ah! Ha! Your wrong, using Google Earth I was able to tell that Savannah was actually closer to the actual yacht mooring - and so was able to advise the client that they had a much shorter journey to pick up the new crew - and was even able to tell them how to get there (actually they did not need the last bit, though it does look good when you are talking to a client - it seems to them that you, the agent, have an incredible depth of knowledge!)
I am only just starting to find out what else it is useful for - perhaps to the extent of having a look at a potential clients house - does it look like the sort of house which indicates that they may be the “right sort of stuff”. You can see the cheaper hotels, bed and breakfasts, caravan parks (eh? For a business agent?) conference centres… You can search using postcodes (very useful!) and if you only know part of a location, slowly, slowly home in to what you are looking for.
You can keep your ipod apps - who wants irritating mobiles at 32,000 feet, anyway? You can keep your ability to look up what time the XYZ flight from Beirut is due - I know what time it’s arriving - anything from the West arrives early and anything from the East arrives late -or how to find a fish and chip shop just off the A23 - my vote goes to Google Earth!
