Greetings, Cafe Patrons.
Believe it or not, I’ve just turned 8-months old as Barista of the Friday Morning Cafe. I’m not quite sure how blog years translate into people years, but I hope I’m about ready to start university perhaps?
In any case, I thought that given some increasing traffic (thanks everyone!) and a readiness to tackle some more weighty topics in the coming months, it was time to move the Cafe on from V1.0 and kick things up a bit. Next week I’ll debut a brand new look for the Cafe - an advance thanks to Mrs. Barista for most of the re-decorating – she’s a wizard!
To get things rolling for the new and improved Cafe, this week is part one of what I hope will be a provocative and interesting “blogalogue” (def. – a dialogue conducted within a blog) between the Cafe regulars and soon-to-be-regulars. Without giving too much away, I know that some of you visit the Cafe from travel management companies, some are from GDS or technology companies, some are corporate buyers, and many are corporate or leisure travellers in their own right. Given the one-to-many nature of blogs, it is often hard to get people actually “talking” about some of the topics in a structured way.
In the new Cafe, I propose to change this up a bit. Here’s how: over the coming weeks, I will be reaching out to a few of you who are regulars and some who may not yet be regulars, to see if we can’t get the comments section rolling (that’s the “blogalogue” part) around a particular topic. And if my own web surfing experience is any indication, it will have to be a pretty interesting topic to get people to join in the discussion on line.
So here goes.
As the world’s economy tries to put the recent GFC behind it, I believe that the differences at which recovery is progressing across various global markets is significant. On the one hand you have emerging and/or expanding markets like the BRIC and South East Asian countries that have basically already forgotten about GFC, while the US and European markets remain sluggish and uncertain.
From a corporate travel perspective, this patchy recovery could pose a very interesting dynamic in the coming years as many corporate travel program heavyweights traditionally are centred in the US/Western European markets. This centralised approach to travel management in those organisations have, over the past decade in conjunction with mega-TMC’s, often sought a “one global TMC, one global policy, one global program” approach to consolidation.
Given the last 2.5 years of GFC turmoil, one might then think that continued consolidation would be the norm given the relentless pursuit of cost-cutting many companies have embarked on.
However, given the aforementioned growth of certain “non-traditional” economies, there may be a counter-trend which could find more purchasing power emerging from Asia, South America or Eastern Europe than previously thought. As these markets are now powering much of the growth for many companies, these new “darling regions” could wield much more influence over how they operate. And given that many of the emerging global powerhouse companies are actually based in these rapidly growing markets, we could see an entirely new travel purchasing dynamic emerge.
So – the blogalogue question for Cafe goers is this: will consolidation of corporate travel programs continue apace, or will a new, fragmented yet regional-centric approach start to take shape?
I have a view on this, but in order to get the blogalogue going I’ll allow it to come out in response to the arguments posted by Cafe Patrons in the Comments section – see the link just below this posting. Again, I’ll be offering extra “shots” of advice to those of you I’ll be reaching out to over the coming week to galvanise the discussion – and by all means please feel free to bring newcomers to the Cafe, as again next week we will have a fresh new look ready to welcome them all!
Look forward to chatting with everyone.
Globalisation in travel terms has always been bit of a misnomer and is almost non existent even within the mega corporations that say they have it. Why? Because the world and all its countries are different component parts with different cultures, objectives, cost centres autonomy etc. It is more than just a buzz word but not valid in a real practical sense.
ReplyDeleteWhy? Well how long have you got? Here are just a few comments:
The only countries worth consolidating are those that have high volume and two way traffic between them. The rest are a time consuming waste for this purpose.
To get worthwhile benefits you need global air suppliers and there are no such things as they still operate on a country by country basis.
For a company to operate globally they need a seamless internal global mandate to make their offices comply. This is hugely rare.
For MI and true management/analysis you need a common global reservations, technology and measurement system that is effective in each region. There is not one.
In summation 'globalisation' is being used as an ideal and a methodology for building international control. In my significant global experience what is being attempted should not be done for financial reasons as it will only bring disappointment if you could measure the results anyway.
Hi Mike, thanks for your views. Your points are spot-on, which then begs the further question: if consolidation is indeed a time and money spinner, why are there so many in the industry focused on doing it? Is it because the industry IS so fragmented and inconsistent that without pursuing globalisation we may never actually realise a world where systems, suppliers, corporations and travellers all work seamlessly with one another?
ReplyDeleteI think it is all about travel evolution and we are barely past the pupa stage as far as globalisation is concerned. Market pressure and people trying to do it will eventually open the doors but not yet. A bit like corporate online 6/7 years ago and even that is not a 'butterfly' yet!
ReplyDeleteSounds like there's still lots of "growing up" to do then! Thanks again for your comments Mike. Anyone else have a view?
ReplyDeleteYou make a really good point and I'm inclined to agree with you for several reasons. The traditional thought processes within a multinational company is about standardization and control because that's where consistency and economy of scale can be leveraged. The entire philosophy behind the Western multinational (followed by Japan) is predicated on this assumption of systematization, replication, and scalability.
ReplyDeleteBut that assumes the market structure allows this to happen and maybe the travel industry is just too fragmented in terms of suppliers, distribution platforms and alternatives, and geographies. Perhaps technology is allowing this notion of global consistency to be replaced with a new concept of managed diversity within a policy framework, in the same way that mass customization and modern supply chain logistics allow a rethink of simple mass production?
If a company is able to use technology to consistently manage diversity (an apparent contradiction in terms but not in this case), aren't we at the possible start of a new paradigm in travel management, that is able to capture the best of both global/local worlds?
And of course with the balance of spending power moving into these new economies, as you point out, the same assumptions of global consistency don't necessarily apply.
Interesting topic - I wonder if there is anyone within global procurement or global travel management within a North American or European multinational reading this who might disagree with my comments?
Hi David, thanks for your comments. I like the idea of "technology consistenly managing diversity" as that is indeed the panacea that travel technologists pursue. So the question to our IT/GDS Cafe patrons out there, as well as those which need to procure these services on behalf of their organisations, what's your view?
ReplyDelete