Greetings, Cafe Patrons.
Over the past several weeks, I've been reading with interest the increasingly noisy debate going on primarily in the North American market pitting airlines vs. GDS's vs. corporate buyers vs. TMC's vs. travel technology companies vs....wait a second, I thought wars were usually between two sides??
Perhaps likening this debate to a war is a bit of a stretch, but certainly the passions that are being flamed over distribution of emerging airline and hotel pricing models are quite toasty, to say the least. At the core of these arguments lie the surging revenues airlines are generating through the unbundling of their airfares and charging as ancillary fees all things great and small during the flight. The corporate travel industry in particular is heavily affected by these types of charges as it's pretty well universally accepted that no one has quite figured out how to book, track, manage, report and account for that $9 ham-and-cheese sandwich on board or that $7.50 pillow purchase (and if the company reimburses for the pillow, does it become company property?)
Earlier this year, the debate was taken to a very public, and entirely new level, via a pair of blog postings from US industry veterans Jim Davidson of Farelogix, and Kevin Mitchell of the Business Travel Coalition. These online salvos were then followed up by what I hear was quite the entertaining session at last month's NBTA conference in Houston. If anyone in the Cafe happened to attend that session, the Barista would love to hear more about it! For the rest of our Cafe goers, if you're up for some fairly fiesty reading, follow these links in order:
Farelogix vs. BTC: http://www.tnooz.com/2010/04/08/news/fear-and-loathing-in-the-airline-industry-innovation-on-hold/
BTC retort: http://www.tnooz.com/2010/04/09/news/set-phasers-to-stun-davidson-accused-of-warped-logix-about-airline-industry/
And just this week, a group of fed up industry types (of which Kevin Mitchell's BTC is a backer) have launched what seems to be another attempt to sway public opinion on the subject, albeit with a fairly silly YouTube video of someone's grandmother reading a prepared statement off a cue card. Again, if you're up for an amusing look at this topic, check out www.madashellabouthiddenfees.com
Anyway, while all of this lively banter is going on in the North American market, it begs the question: when will it hit us here in Asia Pacific? If the level of intensity around the debate within our industry overseas is any indication, we'd better pay close attention to ensure "peace" rather than bringing out the lightsabers. That way, we hopefully can learn from this debate for our region and how we can implement steps to pro-actively manage the situation rather than let it digress into a war of words.
What particularly concerns me about this situation for the Asia Pacific region is that content fragmentation is such a way of life here that any attempts to normalise things in the past have, well, not become the norm. Depending on what you classify as a CRS/GDS, there are more than 10 distribution systems in Asia within the travel industry, and that doesn't even count the proliferation of websites and online travel agencies offering content to travellers.
Adding to the mix, and which is reminiscent of what's happened in the North American market, is the rapid entrenchment of low-cost carriers across Asia Pacific offering their own version of direct selling to both consumers and business travellers alike. Oh, and don't forget that those same LCC's are also offering unbundled, pay-for-what-you-use services for a separate fee. So the battle lines may still be fuzzy, but they are certainly being drawn.
Now I'm not going for a "Travel Distribution Nobel Peace Prize" but I do have some suggestions for us as a regional industry to consider to try and avoid a repeat of the vitriol in other markets:
1. "Legal Collusion:" there are laws and very good reasons why airlines, GDS's or TMC's can't sit at the same table to discuss these things, but there's nothing against an airline, a GDS, a TMC and their corporate customers ALL SITTING DOWN TOGETHER to discuss these issues. All the dialogue from the US laments the fact that of all the stakeholders in this business, no one has sat down together to try and work this out. The first step to getting to an agreement is agreeing that no one has agreed on anything. So let's agree to sit down and discuss our disagreements, then work to agree on how to avoid future disagreements. Agreed?
2. Corporate Buyers Define What They Really, Really Want: what are the truly big issues with respect to fees: booking? Reporting? Policy? All of the above? More than the above? If buyers aren't clear about what their challenges are, then it just seems as though they're mad because no one asked them whether they wanted these fees in the first place (see suggestion 1 above!) One group that's not precluded from getting together and collating their grievances about travel-related issues are corporate buyers, so it's time to rally those troops and put together a prioritised list of issues and proposed recommendations from the ones who really bear the brunt of these fees.
3. Remove the Protectionist Attitudes: let's face it, we operate in a fiercely competitive industry, so we certainly can't begrudge anyone trying to make money here, be it airlines, GDS's, technology companies, etc. However, we must come to an understanding that at the end of the day we all have similar interests around efficiency, cost savings, and ease of use for those who want to buy travel services so if it's possible to be altruistic in our industry, this would be a reason to do so.
On that last point, perhaps I'm being naive as the massive growth projected for the Asia Pacific region in the coming decade is certainly ripe for certain entities doing all they can to grab as much advantage as possible over their competitors. That being said, time and again in the travel industry I find that suppliers and technology companies end up going down a certain road for several years, only to hit a wall and have to re-think their strategy. How about we avoid the wall altogether?
In any case, it may just require the Death Star to be blown up by the Rebel Alliance before anyone pays attention to this looming issue out here in Asia Pacific (are we the far far away galaxy perhaps?) Just don't ask me to comment on who I think Darth Vader is in all this...
Image courtesy www.sodahead.com
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