Travel Leaders Group's CEO Barry Liben talks to Paul Revel about mergers, NDC and ‘game changers’ in travel
You’ve just completed the merger of your two largest UK businesses, Pro Travel International and Tzell UK. What difference will this make to your corporate clients?
At the beginning it won’t make much difference because Pro and Tzell both have a fantastic name in America and the UK. So we’re doing nothing to diminish the brand, just the opposite.
We want to increase both those brands, under the banner of Travel Leaders UK. So to the client who’s been working with a Pro agent, or to the client who’s been working with a Tzell agent, they’ll see very little. But now, behind the scenes is a merging of technology, a merging of accounting, a merging all those things that’ll make us a stronger company.
The TMC market is very competitive, why are you seeing such strong growth?
I’ve been in the business for 37 years and one thing I’ve never worried about is competition. What market is unlimited? Travel is. We’re an unlimited market. There’s no end to the number of people who travel. New trips happen every day. People make more money, people spend money, people that get older and retire want to travel anymore. So the market’s unlimited. In 37 years, lots of things have kept me up at night, competition is never one of them.
Also we’re a big company in America. Our sales in the US are over $20 billion. So we’re a pretty big company and not many firms can bring that to the table.
If I’m a corporate client, why would I go to a Travel Leaders' TMC as opposed to a more typical business travel agency?
The difference is gigantic. If you’re working for one of the major companies, you’re a paid employee. They make on average around £25,000. In America I think the average is around $40,000. I’m sure many of them do a good job from when they get there at 9am to when they go home at 5pm, but their paycheck is not dependent on what they do. Their whole life is not dependent on how good of a job they do, because most of the time as long as they don’t do something terrible, they’re not going to get fired.
Let’s look at the agent that handles Tzell and Pro. They are completely commissioned; they’re independent, we give them everything they need to work, but if they fail, they lose their client.
No one can match our service. It creates a devotion to the client that no one else can master.
Would it be fair to say if a client wanted a low-touch, low-cost automated system they would probably go somewhere else?
We have that too. If they’re a company that only wants something with no touch, never wants to speak to an agent, they’re purely doing very easy flights and don’t care about service or where they stay then we don’t want them.
We handle both types of customers. We handle the VIPs plus the more mass market. We do the New York Stock Exchange – we do big names. A lot of that is on an automated booking system. Also, we’ll never be in a position where we don’t have something that someone else does. The big corporates can put whatever name they want on it, but they all come down to basic tools and we have all of that.
There's been a big debate around airline distribution between airlines, GDSs and the agents and who’s paid. How do you think that’s going to affect the TMC market?
The airlines have been trying for years to get their cost of distribution better and get the travel agent profit set around the GDS. They’ve been trying for years. My opinion is that the likes of Sabre and Amadeus are going nowhere. Will there be modifications to it? Possibly. But I believe for the next 10 years you won’t see any substantial change.
As you described the triangle with the GDSs, airlines and TMCs, they’ve been trying to do it for a long time and have failed. They’re just too established and they’re too important to the travel flow. They’re also talking about the new NDC. No one even knows what that means. That’s not keeping me up at night either - as a matter of fact - two of my own people are even on the board. We’re going to have a hand in shaping that.
Does anybody know what NDC is yet?
No, we think it is a fancy way of selling ancillary services, which was already going on.
People in the travel world tend to be freaked out when anything new is introduced. I’m a veteran, I’ve been doing it 38 years. In 1995, Delta decided to take away agent commissions. You would have thought agents were going to jump out the windows. It was the best day of my life. Small agencies that couldn’t make a living had to find a big brother, had to find a safe harbour and we were there to take them all. People get freaked out about change and get all hysterical, but then it turns out to be nothing that will hurt the travel agent at the end of the day.
I sit in an office in New York and sometimes even I am astounded by what people are buying for travel. I’ve seen corporations which have changed their policy, taking away business class and first class and then two months later putting it back, because the people making those trips won’t go otherwise.
I won’t mention the name of the company but during the economic crisis their manager told them, “No more flying in business or first class”. You go to California, you fly coach, you go to London, you fly coach. But the sales people just stopped going - they said I’ll do it on the phone. Sales went down 45 per cent and the companies put back the policy.
What do you think will be the next game changer in managed travel?
There will be developments in the way people book their travel with mobile devices. In three years, we’ll probably be doing it from our Google Glasses or our watch or from the bottom of our shoe.
I don’t know what the next game changer is, but I’m sure you’ll see even a stronger return to people who want their travel managed by people who know what they’re doing. And we know better than everybody.