Togetherness missing in travel industry
If there was ever a trio called Tom, Dick and Harry, you could bet confidently that they would each have a unique solution for every ill that humanity could encounter and that routinely the other two characters would reject any solution, but their own.
It’s happening right now as a throng of experts tell Thailand how to recovery from a political disaster.
Whenever the dust settles after each violent crisis, gurus come out of their sofas with responses that are predictable and in many cases self-serving.
Associations, believing it is their divine right to solve the country’s problems, all have their own individual take on special recovery strategies.
The fact they represent small slivers of the tourism industry fails to deter their enthusiasm. They grasp the task, they have a vision and hey presto they have a solution.
Trade associations have to justify their existence and the fees they charge to members, so they are usually fast off the mark to turn disaster into an opportunity to prove their worth to a largely cynical membership.
It explains why there are hundreds of trade associations in Thailand all peddling their versions of salvation. They are looking for an audience that listens. The thought that perhaps they should listen never enters the equation.
So Tom, Dick and Harry have never considered that in the wake of a crisis, the first step might be to listen to everyone else and sit down at a table determined to adopt the Bangkok Metropolitan Authority motto, “Together we Can”.
There is no real togetherness in tourism. One reason is that most of the players compete for business. Tour operators love to get the better of hoteliers, rate wise, and hotels dump tour operators at the first hint that they can sell direct to consumers.
Then there is the huge vanity factor that exists in association committees. They are all talkers and would-be leaders, who have very little time to listen to anyone who doesn’t belong to their inner circle.
The result is a predictable array of conflicting sentiments and angles on how the crisis could be resolved. They all have their own pet campaigns stored away for just these moments. They can quote past successes in 1987 and 1992 to back up their claims that they know what’s best for the rest of us.
But do they and are they representatives of the entire tourism industry; probably the second largest employer of Thai labour?
The responses so far, after the March to May red shirt protests that brought the Thai capital almost to a standstill, are based on hunches rather than data or research. Some of them are excellent, while others are fanciful.
A fanciful as they come is the notion that the industry can control prices after a crisis. Market forces decide price mechanisms and low-cost airlines know just how important they are to tweak demand by the day, or hour, and gain the right response.
Predictably, dividing lines were drawn within days of the troops returning to their barracks. Some gurus called for restraint on deals; hold the imaginary line on prices. Others probably under cash flow pressure called for immediate discounts to shore up bookings.
It’s a personal, commercial decision made by company and hotel owners, who frankly are not going to listen to associations or committees no matter how compelling the arguments.
Hotel owners look at their electricity bills, the payroll and call the shots in the sales department, demanding it delivers cash flow to keep basic operations afloat.
Thousands of enterprises are in that same cash flow predicament and short of a government rescue to the tune of Bt10 billion or more, the country’s airlines, hotels and tour operators are going to be living on the edge through the lean months of the 2010 low season.
Instead of pulling rabbits out of well worn marketing hats, associations should recognise certain facts.
There has never been a crisis in Thailand that united the tourism industry enough to set a practical benchmark for rate discounts. It just does not happen.
Publicly, everyone praises declarations that discounts and two-for-one deals are a curse for long-term yield management, but not a single hotel, or company, is going to risk losing business over a moral principle.
So while it was a good PR move on behalf of the Pacific Asia Travel Association and its Thailand chapter to take the national airline to task for asking its partners to offer even deeper discounts, those who were so vocal in criticism were also discounting like there was no tomorrow.
Most hotels are using the internet to post their lowest rates, often under cutting tour operator discounts, or at least matching them. It’s a survival tactic that keeps the front door open for business. It could shore up bookings over the next five month, until the peak season peeps over the horizon. That’s what hoteliers hope anyway.
But it still leaves us to debate the view that many in the hotel industry actually favour a cartel that fixes a base rate for five-star hotels. Actually, it is illegal for US hotel chains to participate in price fixing of any kind anywhere in the world, but that has not stopped cartels succeeding elsewhere in Asia.
General managers in Hong Kong and Singapore, working for American owned hotel chains, are happy to meet with their competitors over a beer to fix minimum pricing. Similar moves in Bangkok have always failed. However, it is more to do with the financial structure of hotels in Thailand, rather than US hoteliers believing there is merit in abiding by Uncle Sam’s statutes on trade.
It doesn’t work in Bangkok because GMs and even their directors of marketing are in most cases mere puppets. They are quite powerless to make a decision on a minimum selling price.
Such power lies with Bangkok’s hotel owners and unlike Singapore and Hong Kong, most hotels here are still owned by families rather than international hotel groups.
We can assume that if hotel owners bothered to meet then a price cartel might be possible. The truth is that most of them don’t even talk to each other let alone share sensitive data or negotiate a baseline for business. There is no such animal as a hotel owners’ network.
I assume, hotel owners recognise the dangers of a low-season that might deliver an average occupancy of 30 to 40% and they will probably fall back on a traditional response of firing up the sales department. The clarion call will always be “get me the business, get me cash flow, or find a new job.”
Certainly, the “Together We Can” campaign, should be adopted as a national effort that draws on the resources of all components of the industry. That would be much better than going it alone with a piece-meal discounts.
Rather than berating the national airline, we should be calling on it to assume leadership. THAI needs to talk to the Tourism Authority of Thailand’s governor to set the stage for a national level campaign where all partners contribute and work towards the same goals.
Instead, we engage in petty statements that miss the point. Thailand’s travel industry has far too many leaders who never take the lead. They sit back and criticise, while engaging in the very tactics they publicly discredit.
The immediate challenge is to get through the low-season and that might translate into huge discounts and incentives as even the most optimistic must concede the tourism product is flawed due to misgivings over security.
While Thailand’s residents know differently, travellers planning a vacation have an entirely different perception of Thailand’s security status. We will not be able to change that perception in a hurry.
There are some options.
Go all out to persuade repeat travellers to return to Thailand.
Organise our company travel up-country and support the provinces with seminars and staff team building outings.
Take a domestic holiday rather than a regional one. Domestic tourism is vital for recovery over the next five months.
Offer the kind of travel incentives that will be irresistible to those who know the country well and are ready to explore it.
But most of all the industry needs to gather for a national convention where all the players provide input to reform the basic travel experience, rebuild quality and seek a new direction to embrace sustainable tourism.
The travel industry has to take a stand on sustainability, education, environment, sex tourism, fraud in the market place and scams at our destinations.
In turn, private sector leaders must end the petty rift between the industry’s federation and tourism council. Only then can it hope to speak with a single voice to its government partners. If we can find a path that leads to togetherness in the industry we will have found a road to recovery.
