Martin Ferguson asks Portman Travel boss Michael Hare about the air fare distribution spat, transparency in the supply chain and the evolution of his company
Q Following Portman's acquisition of Fleet Street Travel, the company seemed to consciously keep a low profile - why was that?
A: It wasn't a conscious decision on our part to keep a low profile. To be fair, Portman has always maintained a relatively low profile. The truth is we've been through an incredibly busy period following the integration with Fleet Street then Travelocity Business, followed by me taking up the post of CEO. It's been a period of positive change within the business, and an extremely successful one over the course of the last year, having signed more than £50 million in new business in 2010 alone. Those that know me will say that I'm a very 'hands-on' chief executive, because for me actions speak louder than words. I've spent the last year-to-18 months focusing on building an even stronger value proposition for Portman, and I've also been busy with my commitments as chair of the Guild of Travel Management Companies [GTMC]. In both instances, I'm happy to say the hard work is paying off.
Q You closed a number of offices around the country last year. Has the streamlining strategy benefited the business?
A: Portman Travel has been in business for 52 years, during which time it has made many acquisitions that resulted in branches in close proximity to each other. With significant developments in technology, including e-ticketing, particularly over the last decade, streamlining a branch network became a necessary result of these developments. In line with this, we've just completed our largest ever investment in technology, networks and telephony platforms, and there is now seamless integration between all Portman branches and departments within our 16 offices in the UK, Ireland and Holland. By keeping a presence in strategic key locations, we are now perfectly placed to offer value and consistency across all our clients' needs.
Q Are you looking to continue your acquisition strategy?
A: We will always be open to opportunities and explore them as and when they arise. Naturally, they need to add strategic value to our customers and our shareholders.
Q ITM is calling for more transparency from TMCs when it comes to commercial agreements with suppliers. Isn't there enough transparency in the supply chain already?
A: We think so. The relationship with our clients is based on transparency - it's what the client wants. There isn't a 'one size fits all' approach to this issue. Market forces will dictate what a TMC can and can't charge a client, and client needs will vary depending on the size and shape of their business. Buyers are knowledgeable regarding the supply chain - in our experience they want the TMC to remove complexity from the process of travel management and not add to it. Additional complexity adds to cost.
Q Where do you stand on the TMCs' right to mark up both published and net fares?
A: What is a net or a published fare these days? Net of what? Commission, I don't think so. Published, where? Some airlines publish their net fares on the web, plus a mark up. Is that not a published fare? Airlines manage their pricing and availability dynamically so prices are always changing as they respond to market conditions, competing in different ways according to their own policies and using different distribution methods to achieve their goals. We respond to what the client wants from us. Our fees and margins are agreed with a corporate at negotiation stage, and this is a transparent process, the purpose being to remove unnecessary complexity on behalf of the client. In our mind this is the value that a TMC brings to its customers.
Q American Airlines' recent spat with the GDSs and online travel agencies threatens to break up the air fare distribution model as we know it. What do you think the future of fare distribution holds?
A: We have faced many challenges as TMCs over the past decade with the airlines changing the distribution model and with the growth of online adoption and usage in the travel industry. This current situation is one that is again likely to add complexity to the industry, time in the booking process and ultimately cost that someone in the chain will have to pay for. However, we have proved our value through all the changes we have encountered and I am sure that whatever the final outcome is of this disagreement, we will find a working solution to ensure we respond to our customers' requirements.
Q You must have made a few quid when you sold Fleet Street, so what inspires you to keep working?
A: I started in this business when I was just 16. I have a passion for the travel industry and have done since I was a kid, I was into aviation from about the age of eight! I've given my life to the industry and I love my job. Right now I'm exactly where I want to be. I enjoy and am motivated by being the CEO of Portman and the challenges that it brings. Many of my peers have followed the same or similar paths, and I think we all consider ourselves lucky - lucky to still enjoy our work after all this time.
Q What is the single biggest challenge facing the TMC community?
A: There are so many challenges. One is the pace of change across the industry, and of course there is the rising cost of oil - $200 a barrel would be a challenge for us all. I also fear that the transport infrastructure we all rely on is close to capacity, as was bought home to so many of us following the snow crisis at so many international airports last December. It's embarrassing for the industry when things go so wrong on such a large scale. Any form of disaster puts an immense strain on resources and on relationships with our customers. But most worrying for me is the uncertainty and unpredictability of crises. At a time when the industry is approaching recovery from the downturn and the ash cloud crisis of last year, we should now be focusing on the long-term health of the industry as opposed to short term financial gain. It's time we pulled together as an industry to ensure preparedness for unpredictable events. It's when times get tough that we get to demonstrate our real value.
- Michael Hare, with more than 32 years of experience in corporate travel, is a highly knowledgeable and dedicated business travel professional. appointed as the chairman of the GTMC in January 2010, he is one of the industry's most respected authorities on corporate travel management. hare began his career at the age of 16 and by the age of 19 had started his own business travel company, giving him a unique insight into all functions and operational aspects of business travel management. his passion for corporate travel saw Fleet Street Travel win numerous awards and accolades before he sold to Portman Travel in 2008. he initially joined the Portman board as COO responsible for operations and technology in 2008, instigating many changes and improvements in the customer care experience. in October 2009, he was appointed CEO. The company employs over 500 people operating from 17 locations.