Archive for September 2010

Beware the bearded Scotsman – SPA Dinners

In my long and varied travel career I have been fortunate and unfortunate enough to have attended many an industry dinner. Some have been smug, self congratulatory affairs; others thinly veiled sales promotion and others downright boring. There have been times of the year when I think if I see another lamb chop I will start baah-ing and others when there is so much salmon around I fear an outbreak of spawning.

But there is one annual event that stands out in the crowd. Surprisingly so as it never changes its format, menu or entertainment yet it has not once failed to deliver a surprise. I am of course talking about the Scottish Passenger Agents Annual Dinner which takes place close to Burns night in Glasgow every year. If you ever want to experience a mixture of Scottishness, comedy, eccentricity and life in the raw this is the place to be.

If I was a blackmailer this particular evening would be a must to attend because never do you see so many prominent industry names let their guards slip anywhere else. In fact all one would have had to do is position oneself outside the lifts of the 10th floor (where the ‘hospitality’ rooms where) of the Albany Hotel and watch the great and the good fall in and out. It was at this very place that I experience the ‘Bearded Scotsman’ of my title but more of that later.

The invitations and allocation of tickets come out a few weeks in advance and it is here that you get your first inkling of how the association or your Scottish regional staff view you. Between them they decide who outside Scotland is to be invited, where you are going to sit and what hospitality you are to be offered by the sponsoring suppliers. It can be quite informative. For example when I first attended the dinner I was placed somewhere like seat 36 in row Z where the top table was like a tiny peck in the corner of one’s vision and the food was blood temperature by the time it got to you. Strangely I got invitations to all the hospitality so somebody clearly wanted me to get drunk. In some cases the invitations were photocopies which highlighted the afterthought or counterfeit of their availability

As I said earlier the format never changed. One would fly into Glasgow airport the afternoon of the event along with all the other Sassenachs where there would be a bizarre dance around the taxi rank as people tried to secure or avoid shared taxis with each other. Arrival at the then Albany Hotel would be equally fascinating as people jockeyed for position at check-in whilst hailing friends and associates across an already crowded bar. It was also here that you would have your first encounter with various supplier sales reps that saw it as the best opportunity to make friends with you as, once in the queue you could not really escape.

Once in you room (which again highlighted your status or lack of it) you changed into your dinner jacket, sorted out your invitations and observed the complimentary mouth freshener, Alka-Seltzer and miniature whiskey on your bed and prepared for the onslaught. My preparation included a ham sandwich, glass of milk and two aspirins in anticipation of their need. Then it was into the fray!

Arriving back at the ground floor was like walking into a vast bear pit. By this time the place was packed and many looked and behaved like it was the end rather than the beginning of a long and boozy evening. The noise level is immense as people jostled for drinks, introductions and access to the various sponsored rooms. It is the only event I remember where the sponsors had to provide bouncers to keep uninvited customers out. Even at this stage one could not be but impressed by the hotel management and staff who somehow managed to control this seething mass of black and tartan that seemed to be everywhere they should, and should not, be. Their ability to turn out so many drinks so quickly to so many guests is also a testament to their skills and desire to avoid abuse.

The first moment of crisis arrives. Somehow they have to get these hundreds of partying folk into the vast banqueting hall ready for dinner. It is not easy. They do it in a way similar to airports. It starts by making a statement that dinner is served and they do this 15/20 minutes before. They then go through the repertoire of second call, final call, ‘gate closing’ and finally the threats start and the team reminiscent of Tokyo train pushers move in. Eventually the vast herd is in, the doors shut and the next phase of getting everybody to sit down and shut up starts.

It is then that you look around to see who you are going to spend the next few hours with. And I do mean hours as this has to be the longest dinner in the travel calendar involving mainly interesting and funny speeches…but not always. All the time the tables are plied with sponsored drink and pre-ordered bottles of wine. Your table guests are a mixed bunch as you were not then allowed to choose them yourself. Sometimes this was good and others catastrophic.

I soon discovered that as ones status increased and the move up the table plan starts the quality of the guests and the evening diminished rather than increased. But not always as there were always ways to make your own entertainment during any boring bits. I remember one particular occasion when the guy opposite me fell asleep during the speeches. As time progressed his eyes closed, his head started falling back and his mouth opened like a stranded fish. The snoring then began and the rest of us collapsed in giggles like a bunch of school kids. In the end we devised an impromptu game which involved throwing peas scavanged from our main course at his gaping mouth until one made him choke and he woke up.He then glared at us saying he could not hear the speeches for our giggling.

The food was always great. They had a brilliant chef who somehow turned out hot and tasty food for the massed ranks of guests and he never failed at any of the dinners I attended. I was always a little worried as his name was something like ‘Bogey’(sp) which I have to admit put me off eating any desert with currents in ‘just in case’.

After the dinner the pipes started up again which heralded the beginning of the serious drinking on the infamous 10th floor. Just time to check my invitations, swig down another couple of Aspirins and up in the lift I went to meet whatever fate was going to dish out on this occasion. Like everywhere else the place was a seething mass of humanity with guests, hosts, bouncers and barmen all vying to make themselves heard. Being hard of hearing I just grinned inanely at everyone and it seemed to work.

The rest was just a blur until my meeting with the bearded Scotsman. I had just slunk off from bumping into one of my first bosses. He was a very proper, well spoken chap who marched up to me and said “Ah Platt isn’t it”? I replied in the affirmative and he gave me a withering look. “You’re MD of Hogg Robinson now aren’t you”. Again I answered in the affirmative. "Good God” he uttered “None of us thought you would get anywhere” he said and stalked off. Time for bed my bruised mind told me, especially as my flight was due to leave Glasgow in four hours time.

It was three in the morning and the evening had started at five the previous evening and I was not in my full flush of health and strength. Is it time for another Asprin I thought as I walked towards the 10th floor lift. Before me a door crashed open and the biggest ginger bearded man in a kilt fell out. He made that big guy in the ‘Brave heart’ film look like a midget. He stood there and I cowered dwarfed before him. He then collapsed on me and passed out.

A wrestler could not have done it better. I was pinned flat underneath him and could not move. My lungs were squashed under his bulk and I could barely breathe let alone cry for help. I then lay there for what felt like hours but was probably minutes. During this time people stepped over us to go to the lift like it was the normal thing to encounter in a Glasgow hotel corridor. Eventually the bouncer from the British Midland lounge took pity on me and managed to drag the giant off me. Unfortunately not before ‘Brave heart’ was sick.

I missed my morning flight and got chucked out of my room at midday with a bruised face and sore ego. I was sitting on the plane going home when I noticed something. It was a long, curly ginger hair on my handkerchief. A fine memento of a pretty typical SPAA Dinner. How the hell did it get there I mused!

Just how much would you disclose?

For some time various corporations have been asking their intermediaries exactly how they make their money and what positive impact their company’s business has on their income. This interest has expanded further and bodies like the Institute of Travel and Meetings (ITM) have been calling for Travel Management Companies (TMC) to provide a ‘register of interests’. The request is made within its report on ‘Remuneration and Transparency’, the second part of which has recently been published.

The chairman of the ITM said “Our goal at ITM is to create better relationships to further professionalise this industry for the benefit of all” Baloney! How would disclosure of confidential business agreements do that? I would suggest perhaps it is more about checking that their intermediaries are not making extra money out of their client’s business and not trying to influence client behaviour in the process for their own gain. Let’s not be coy about this.

Some of you may have read my blogs on how TMCs still make money from the suppliers. This can be viewed in two main ways. Either ‘Why not, they do a lot of work for the supplier and should be rewarded for it’ or ‘If my expenditure is earning extra money from the supplier then that belongs to me’. There are strong arguments for both points of view but first lets look closer at the mechanics and principle involved.

Let’s say Platt Inc has a considerable air spend and much of it is with Air Limey. He suspects that his TMC not only has a commercial agreement of some sort with Air Limey but also a better one with Yank Air who is Limey’s biggest competitor. Platt Inc has a fee relationship with his TMC where any direct income should be credited to him and it is also in his interest to ensure that Yank Air is not going to be offered to his travellers even though it might earn extra money for the TMC. Shame about the mistrust but ‘I demand Disclosure’ he screams.

First there is a principle to be addressed. Any such agreements are usually made under strict letters of confidentiality. They are often agreed only on the basis that any benefits remain with the recipient as suppliers clearly wish to delineate who is being rewarded and for what. Their view is that they already incentivise the end corporation so why do so again. Also there is one big question which is, apart from the confidentiality issue, what right does any commercial company have to demand their suppliers and intermediaries provide company sensitive and strategic contracts that encompass their whole business and not just that one organisation.

From a more practical perspective what would such disclosures reveal? There are as many different deals out there as grains of sand but here are a few of the more prevalent features.. Most are built around a Service Level Agreement (SLA). These were introduced at the time of commission removal as a more targeted way of ensuring suppliers still got what they needed now that particular payment had gone. The core of such agreements are about paying for all the things they used to get like access to staff, account managers, basic client information etc. A payment is fixed for this section and followed by others that can sometimes be linked to performance in overall volume and share. Within this the supplier may include benefits such as special competitive fares, sponsorship and partnership opportunities.

So, in many cases volume and share do come into it so some corporations still might say they deserve a slice of that even though the contracts clearly do not allow it. But, for the sake of argument let us look closer at this because it might not all be one way traffic. For example Platt Inc discovers that its TMC has a deal with both Air Limey (AL) and Yank Air (YA) and both of them involve incentives around growth (AL) and share (YA). They sit around the table to discuss it.

From Platt Inc’s point of view it is simple. According to the data they flew 500 sectors on AL last year and they want the incentive. The same applies for YA where they know they must have sent at least 80 travellers but only have booked revenue (not actual flown) to measure the exact details.

Ah says TMC. Firstly Mr Platt Inc you may not know it but you have been ‘red ringed’ by AL. this means our contract says your volume can be used for measuring performance but not for payment. Not only did we not earn money on you but your year on year performance was down so in fact you cost us on what rewards we did get for other customers. By the way similar will apply to YA. We cannot track your true flown revenue but even if we did it will do no good as we signed another corporation who pulled our share higher than your likely achievement.

I hope you are still all bearing with me but I wanted to demonstrate exactly how big a can of worms such disclosures can be and what lack of earning potential there is. For every ‘winner’ there will be ‘losers’ and if I was a TMC I would simply devise a system to negate such nonsense that would ultimately offset any losses by gains.

So the questions are do you really want to dig and delve into other people’s business. Do you trust your business partners so little? Is it really worth the pain? Does anyone honestly think such activity ‘will create better business relationships’? Well certainly the chairman of ITM purports to think so. I can but disagree. What about you?

Data Provision - Sounds easy?

There was an interesting blog recently called "Stairsteps to Heaven" written by Scot Gillespie and I identified with it very closely. He eloquently expressed the frustration of us all as to why it seems so difficult to get even the most basic data in an accurate, efficient and user-friendly way.

I agree with Scot that surely the travel industry should be able to provide decent data and goodness knows there is a huge amount of the stuff floating about. In fact a day rarely passes when some new data mining tool or MI gizmo does not get an airing. The tools are not the problem and probably never were. The issue is the quality and clarity of the initial information that goes into them and the ability of those who manage what comes out of other end. Yes I agree that the travel industry is large but I am afraid it has not matured very well as it still uses out dated, diverse and badly coordinated systems at the supplier end

Take for example a company that sends it’s travellers across the length and breadth of their own country and all over the world. Their travellers sit on planes, travel by car and rail, stay in hotels and need to comply with a travel policy built around the optimum use of resources at the best prices. But what is the right policy for them? How can it be best optimised? How can you be truly sure it is being complied with? Obviously this company needs both the data to make informed decisions and someone to interpret the data in order to provide quality analysis and recommendations.

The first port of call has to be the origin of the data and how it can be placed in the right format into the right data warehouse. This is where the issues start. Why? Because each supplier uses systems different to each other that were created many years ago and not built for export into other systems. They also interpret their own data differently with respect to prorating sector costs of tickets that contain more than one airline, commission rates and, more latterly, ancillary charges. Many tickets do not have the true price (or in fact any price) on them due to corporate deals etc.

The hotel industry is far worse and they have to split out more cost to get down to basic bed price. There are literally millions of hotel and precious little fiscal commonality. Even the big chain hotels can be misleading as they are not all owned (and therefore consolidated) by that brand company. You will also rarely find them consolidated in any GDS as GDSs charge too much.

Rail too is a law unto itself with vast numbers of different train companies and tariffs for the same journey as well as more sectors and low prices than all the others put together. Car hire and ferries ditto.

OK, so you may have to accept that it is virtually impossible to have totally clean data in the same format from the same source but there should still be value in trying to get travel consolidated. For instance you have the GDS and all the other companies created for this purpose. Trouble is many global organisations use different GDS in different countries which still need to be brought together. Another key airline only source (and possible solution) is IATA and ARC who are the companies that do all the pulling together and reconciliation for the air suppliers across the globe. This possibly has the best data in the sense that it is standardised. The algorithms they use and the assumptions they make are quite scary but at least like for like.

I am really quite surprised that more effort has not been made to explore this source from a corporate perspective. Maybe it is because IATA was formed by the airlines for the airlines and I am not sure of their overall willingness to open up such transparency. You see this data is being sold and used within the airline community already A bit worrying really but airlines can buy from IATA enough to identify what deals a corporation has with a competitor right down to traveller numbers and price paid.

I think the solution such as it is lies with the TMC. They are the only intermediary within the chain that does enough to bring together all the elements. The big ones are already well advanced in devising systems and frameworks and have the capability of working with all players…at a price.

So, if the happy day comes where you have enough data to work with reasonably accurately. What next? Well I think even now corporations have spent far too much on getting the data and far too little on interpretation and use of it. In the modern day I think it far more important to get a TMC to provide a data consolidator/analyst/strategist than a standard Account Manager.

So my brief conclusion? You cannot get truly great data because, whilst the systems are there, the initial information is not available in a manageable format. You can however pick up the best bits (mainly air) and compare like with like. But before that make sure you have a professional who is fascinated by data and able to read it and make recommendations.

Finally I think organisations such as NBTA, ACTE, IATA and the like should spend less time on conferences, self justification and money making and more on working together to create a global multi-disciplined solution

Would you believe it? Ryanair accepts facts of life.

I promise I am not becoming obsessed with Ryanair or Michael O'Leary but I just had to share this with you if you missed it first time around. The article is a direct quote from TTG and was written by their excelent reporter called Rob Gill so the credit for it (as well as acuracy or otherwise) goes direct to him and his publication.
Who would have ever thought he would utter such words and how much humble pie will he need to eat? It is probably correct too and has wider implications for other similar low cost airlines. After all how else can he grow except by entering new market sectors like business travel. Despite all their noise Ryanair has only around 3% of business people on their routes.

O'Leary sees end to low fares

Monday, September 13, 2010

Rob Gill

The era of low airline fares could soon be coming to an end according to Ryanair boss Michael O’Leary.

The outspoken chief executive of the no-frills carrier said the company had to move away from its “pile it high and sell it cheap” strategy because current average fares of £33 were unsustainable as costs increased.

O’Leary, who last week suggested that aircraft should be allowed to fly with a single pilot instead of two, admitted that Ryanair would have to look at a more “sophisticated” business model in the coming years.

“We have to move away from being obsessed with having the lowest fares in the market,” he said.

O’Leary admitted the airline might need a less controversial chief executive as the business matures over the next few years. But he added that he was unlikely to leave until the carrier doubles in size to around 400 aircraft.

Brushes with the rich and famous – Frank Sinatra

Ok, so this one will be brief, but so was my brush with the great man. Well actually it was not so much a brush than an assault!

It was in Buenos Aires and just before the Falklands war. I had been sent over to meet our folk and say all the ‘right things’ one says just before war is declared between countries.

I sat in the taxi thinking of Churchillian like things to say before deciding that might not be a good idea as our local staff were all Argentinean except for the country manager who was Welsh (same thing really!). It was rather surreal as I was driven down the main streets of Buenos Aires which all seemed to be named after Irishmen including the Avenida O’Higgins. And even more surreal when I saw a cinema showing ‘Chariots of Fire' with subtitles which had queues of locals waiting to go in. Maybe they were looking for tips on how to defeat the imperialist oppressors?

On arriving at the Sheraton Buenos Aires I wondered what the hell was going on. The entire place was totally packed with over-excited, mainly female, Argentineans Who shrieked and whooped in a way I have not heard since. I elbowed my way through the swaying crowd and checked in. I asked the guy at the desk what was going on and he said “have a nice stay Mr Platt” He clearly did not understand so I asked again in the British way (loudly and slowly in English) and he smiled sweetly in feigned understanding and said “have a nice stay Mr Platt”.

It was all getting too much after such a long flight so I grabbed my key and fought my way to the lift. It fairly throbbed around that area so I lowered my shoulder and fought my way through. It was worse than playing hooker for East Grinstead third rugby team. Finally I saw a lift with the doors closing and I dived through the gap at the last minute.

The lift started almost simultaneously and I felt myself being grabbed. There were three others there. Two were enormous thug like creatures and the third was Frank Sinatra. The next movements happened in a seamless blur. First I was lifted off my feet by ‘thug one’, secondly ‘thug two’ frisked me and thirdly Frank (I like to think we were on first name terms by then) pressed the button of the next floor. Lift door opened, I was propelled out and against the hall wall with my feet still not touching ground and immediately the door shut. Welcome to Argentina I thought.

I got up without part of my shirt and a large chunk of dignity and got the next elevator too my room. To be 'frank' I was bloody annoyed so I rang and asked for the General Manager. “Have a nice stay” the operator started to say until I stopped him with certain words that need no introduction anywhere in the world. He said he would phone Frank Sinatra’s personal assistant and report back.

How did it end? Nothing until the next morning. I got up and saw that under the door had been posted two items. First was the local English written newspaper saying Sinatra was in town. The second was a clearly printed mass produced photograph of the great man with the word “sincerely Frank Sinatra”. Sincerely I thought? Was he sincerely sorry or was he sincere about chucking me out of his lift?
I guess I will never know now but I have my suspicions!

Brushes with the rich and famous – Michael O’Leary

What a man Michael O’Leary is. Mind you I cannot make up my mind whether he should have been more appropriately named Michael O’Loony or perhaps Michael O’Lucky. Then I decided the word luck does not really feature in either his profile or vocabulary so that one can be quickly discounted. This leaves us with the loony possibility and I think this option needs more careful thought.

When you see Michael you can almost be tempted to wonder what all the fuss is about. He does not particularly stand out in the crowd and is very often disarmingly charming in his soft Irish accented way. When I saw him I wondered if he was really the beast of Ryanair and the airline reincarnation of Rasputin the mad monk of Imperial Russian that I had heard about.

We were both invited to speak to a group of city analysts at a day conference sponsored by one of the large investment houses and it was his turn to go first. We had sat through some pretty dry stuff delivered by well meaning but character challenged airline CEOs which were received in a rather stony and impolite fashion by the audience. This audience was pretty typical of most city analyst groups i.e. average age 25, average experience 1 year, average IQ 150 and average manners 0.

When O’Leary stood up there was an expectant rumble of muted mutterings in the audience. Up to the podium he marched, looked at the audience and took a great swig of water direct from the neck of a large bottle whilst ignoring the glasses set alongside for his use. That really did silence the expectant audience and some even stopped tapping away on their blackberries.

He started talking gently and lucidly about Ryanair, their achievements and plans and it was really rather impressive. You could see the audience being wooed and I could not fail to notice the look of total relief on the faces of his advisers who had no doubt tried to school him about keeping to the script they had spent hours writing for him. Apart from the odd witty aside delivered in his soft Irish bur he looked word perfect.
And then something seemed to click in his brain.

He was talking about airport charges and suddenly he spoke the words ‘Stanstead Airport’ off his script and his eyes seemed to glaze and a red mist gathered in front of them. I heard a muttered “Oh shit” coming from the direction of his advisers and Michael was off into a wild tirade of abuse levelled at the leadership of that airport who happened to be in the audience. It was not pretty and it was not nice and it definitely was not in his script. It ended as abruptly as it started with O’Leary staring balefully and challenging at the Stanstead guys as he stalked off the stage. You could have heard a pin drop.

Follow that I thought. So up I got and took my place on the podium. I could see that the audience had not joined me. Most were on their blackberries having seen the ‘main event’ and those that weren’t were chatting, slipping out or leaning over to pat Michael on the back. So I decided to join them by subtly picking up where Michael had left off, after all I had little to lose by that stage. First thing was the bottle, or should I say bottles as I grabbed each one of the four on the table and took a deep drink out of all of them By this time I had some of their attention. This was followed by my delivering a much abridged version of what I was going to say and then I got on to Stanstead airport and Ryanair. I then gave what I thought was cunning but scathing comments that were a barely concealed attack on Ryanair and the way they work with/against the rest of the industry and finished to a reasonable spatter of applause.

Back to my seat in front of Michael I went and I could sense his eyes boring into the back of my head. At the end of the conference I decided to take the bull by the horns and introduce myself to the man and round I turned. He was very gracious and to my surprise thanked me quite profusely for the support I gave in my speech. Did he not realise I thought? Did he not see I was taking the Mickey I wondered? No I thought, this man is so vain he did not notice. Goodbye I said and walked away. I turned at the door and our eyes met across the room. His eyes looked glazed and I thought I detected a red mist in front of them.

So what do I think? Is he mad or very clever? Well there is little doubt he is very rich and very successful. He also has found a way to perpetuate this by being as unpleasant as possible to the industry and some would argue, his customers. In fact the worse he gets the better he does. Alongside this you have a man who is clearly a loose cannon. A man who says you should pay to go to the toilet on board and that air hostesses should learn to land planes in order to get rid of second pilots. I mean that is mad, or is it. Nobody, including him I suspect, believes either of these will happen but look at the press he has achieved for saying both. Remember, the worse he gets the better he does.

So my verdict is that he is a very clever man, a possibly dangerous man, but hopefully not one with a long memory as I would not like to see the outcome of that red mist!