BTN Europe presents an overview of business travel and MICE predictions for this year
29 October 2020, 1030 - 1630 CET
The 3rd annual Strategic Meetings Summit Europe is
ExCeL London - 22-23 June 2021
Former head of ITM and most recently senior VP of global development for GBTA, Paul Tilstone tells BBT why he decided to leave the organisation and set up his own consultancy, Festive Road.
He tells us why now is the right time, how a popular 1980s children's TV programme helped inspire the new venture, who it's aimed at and his thoughts on key issues in the industry including airline pricing, rising hotel rates and direct selling by suppliers.
Why have you decided to leave GBTA and start your own company?
The past 10 years I've led associations in our sector including chief executive of ITM, and also helped GBTA to launch in other parts of the world. It has been a fantastic time, but I’ve made so many contacts, and expanded my network and knowledge, I just felt that at 46 years old it was time I leveraged that and did something about it… so that’s one of the reasons I’m moving forward with it.
I previously established Festive Road in 2005 but it was to support my contacts with ITM and GBTA. I did mean to do more with it but the association work I was doing – which I loved – consumed so much of my time and I never got the chance to see it through. So I then incorporated Festive Road early 2014 with the plan to launch it on the unsuspecting industry sometime soon…2015 is the right time.
Who is the consultancy aimed at?
It’s actually aimed at the supplier community, it’s focused on supporting the supplier and intermediary community to take advantage of the changing supplier landscape.
I think there are so many potential opportunities but also pitfalls that are developing in front of our eyes, and I feel it’s the right time to launch something to help companies take advantage of those opportunities. And I don’t think there’s any other company operating in this sector for the supplier community that has the breadth of network, talented associates, subject matter expertise and diverse global community that I’ve built – I’ve got contacts from South Africa to Finland from Brazil to Moscow.
How does Festive Road differentiate from similar consultancies?
Most of the consultants tend to look at supporting the buyer community and many of the consultants that support the supplier community don’t have that specialist business travel knowledge I have.
Even though the world has globalised there still aren't many people who have the knowledge and contacts in all of the markets around the world. So once I started doing the global development job for GBTA I quickly realised that I had an opportunity here at some point and it was a question of when I took advantage of it.
What's the story behind the name Festive Road?
When I first looked at establishing my own company I called on the spirit of the iconic British feature animation series Mr Ben. In each episode he was projected into a world where he was required to solve a problem before he could return home. He did that by going into the fancy dress shop, and after each adventure he would discover in his pocket a souvenir of his adventures, and he lived at number 52 Festive Road.
So I feel my consultancy represents the same spirit. The project teams I put together are trusted experts from across the industry, and our objective is to become immersed in the clients' worlds and leave with lessons we can take on elsewhere.
One issue for buyers at the moment is around airline negotiations and the problems signing up to Prism (the data aggregator) as a pre-requisite – our Mystery Buyer recently flagged this up. What are the problems for buyers with Prism? Are there any advantages? And how can the buyer maintain the upper hand in airline negotiations at a time when many feel the airlines ‘call all the shots’?
The buyers I’ve spoken to have told me they don’t feel in control of their own data and they feel pressed into contracting with prism as part of the airline deal and in most cases they don't have any idea where their data ends up. I think it can be solved with more transparency and a clearer explanation of what is in it for the buyer.
What are the advantages of Prism for buyers?
The argument the airlines have is they will use data to tone up their offer – the more comparative route data they have, they know how much they need to sharpen their pencils. The challenge with that is it takes that whole procurement focus away from the buyer because the control of the data is not with the customer, so I don't think the buyer can maintain the upper hand.
However, I don’t think good negotiation is about getting the upper hand – I think it’s about recognising and imparting your realistic value to the supplier, and the supplier doing this vice versa.
I think the buyer that has the right information to go into a meeting with an airline is key. Whatever data the airline has got through prism it’s the other data that’s just as important such as: airline quality reports, feedback from travellers, future travel patterns, knowing your options of carrier, being realistic about your ability to drive traffic from one airline to another, data on price variances by channels. So for example if you're dealing with Emirates, do you know whether your travellers can get the same ticket cheaper through another channel that’s not through your managed channels? And if so talk to your airline and make them aware of that and say this is not right... it’s about going into the meeting equipped with the right data.
Too many buyers are relying on hard and fast price data, but actually if you want to get advantage in your negotiations it’s all that other stuff that plays into it.
Do buyers still need to be concerned with NDC and the problems it could pose in 2015?
I think NDC is a non-issue now, because it's a given. It's been approved by the department of transport it will be implemented by a number of carriers, we don't now how many, but the issue is what will NDC and other technology usage, including mobile, do to continually evolve the airline strategy.
It's this strategy that's really important for everybody to think about, and the debate should now switch to those airline business models and their distribution and pricing strategies. And every buyer should be having this discussion with their airlines.
There could be problems if airlines do not hear what the buyers need, and they'll end up developing strategies that think of the travellers needs and not the needs of the corporation. This could mean a less transparent world with missing data or poor ability to care for the travellers unless corporations take heed. So I think the buyers need to speak up either individually in their business operations or through their associations, because if greater airline fragmentation occurs then the deal as we know is dead.
Do you think there is an increase in suppliers targeting travellers directly and cutting out the buyer?
The move by a supplier to explore more direct channels with the traveller has been around since loyalty, which is one of the reasons loyalty schemes were first introduced, but I think the appetite for it and the number of incidents is increasing.
However, I would say all suppliers are looking hard at what channels offer the best route to market to gain the best price. Sometimes this may be through managed environments, but suppliers have so many more marketing channel choices these days. They don't owe TMCs and GDSs a living, and if buyers aren't delivering value to the suppliers and they think they can get better results going direct why wouldn't they try it?
I think this could be a purge and quite refreshing for the industry because for me anyone who is sitting between the end user and the supplier needs to demonstrate their value to both parties at each end and if they can't demonstrate value they've got no right to be charging a fee for the service provider and ultimately this will straighten and flush that out.
Is there not a danger of suppliers damaging key relationships by going direct?
That is the danger or exploiting a point of weakness or finding the situation changes and someone can exploit them. But then that is the natural order of business and markets. This industry typifies the important relationship between people, because if a buyer finds the hotel prices are too high, or there is over-supply in the market, or the economy hits the buffers and hotels are fighting for business and they want buyers to use them, that's when relationships become strained.
A hotel that exploits situations like we have at the moment [with increasing hotel rates] and decides the value of relationships is nothing to them, suddenly finds trouble two years later when the market tips the other way.
So I think technology and new business models are all fine, relationships are of paramount importance, but so is being honest. And I think there are too many people in this industry that harp back to the glory days or think they have a justified place in the supply chain without really thinking what's happening, the new order of things, and what they should be doing to add value to their client – and changing their business models accordingly.
How can buyers find value in hotel negotiations with prices set to keep rising this year?
I still think there's a distribution challenge in the hotel industry, it's gone from being a considerable amount of direct distribution to much more consolidated distribution.
You've got to understand as a buyer that those prices are going to go up. The question is, by how much, and what can you do as a buyer to leverage spend as much as possible. That goes back to the types of data – where are you spending it? Can you consolidate it? Can you bring in other spend like meetings or other ancillary spend? That's what good procurement people do really well. They don't just say we like the hotel, same prices as last year; they benchmark against the prices they can get against the expected industry increases.
Paul Tilstone is founder and CEO of consultancy firm Festive Road