PATA in good shape for now

BANGKOK, 9  September 2019: Calling the last four years a net positive performance, the Pacific Asia Travel Association now reports its fiscal year 2018 closed in good health.

Released 2 September, the 2018 annual report stresses membership increases, more events, new sources of revenue and lower management costs.

That was how the PATA  secretary/treasurer, Maria Helena de Senna Fernandes, described 2018 while the organisation affirmed a comprehensive restructuring to regain relevance in the face of disruptive technologies is underway.

However, a closer look at the latest balance sheet indicates challenges remain that could trouble PATA’s leaders in 2020.

In 2018, the association’s revenue declined by 6.6%, resulting in revenue of USD2.68 million against overall expenses of USD2.65 million, (USD2.76 million in 2017) leading to a net positive surplus of just USD26,556.

PATA is a registered non-profit organisation under US law and declares its annual returns in an Internal Revenue Service Form 990.

During 2018, membership revenue dipped slightly when compared with 2017. But membership retention increased from 81.9% in 2017 to 85.9% in 2018. That’s good news for an association that eight years ago found it difficult to reach a retention rate of 70%. However, having 800 membership tally is nothing to write home about for an association that a decade earlier claimed a following of 1,500 members. The retention percentage is based on enterprises renewing membership, rather than the financial value they bring to the table.

In recent years retention has remained static and indicates the association continues to steady the ship against severe economic headwinds. A tough business environment saw membership revenue actually slip from USD1.64 million in 2017 to USD1.60 million in 2018.

In the annual report summary, PATA states “the membership community remains strong at over 800, which includes partnerships and agreements with other industry associations,” a hint that not all members are linked to the traditional annual due system.

Of the 800 members, travel agents remain the largest segment. National tourists offices tally 90, and due to the much higher membership fees, they remain the most powerful category. In 2018 it recruited 117 new members. Kenya Tourism Board stands out for no other reason than it is a considerable stretch to describe the country as part of the Pacific or Asia regions. 

In 2018, PATA declared a cash position of USD1.4 million according to the report’s summary down slightly on 2017.

PATA’s net reserve position stood at USD1.1 million, a decrease of USD64,600 compared to last year, due mainly to pay out of employee benefits for retired staff.

The association has set a target of USD2.0 million in reserves by the end of the fiscal year 2023.

That the secretary and treasurer argued would “place PATA on more stable financial ground.”

There remain uncertainties as the association approaches 2020. It will start with the task of finding a new president and CEO Mario Hardy, who will step down at the end of his present contract. There are also hints that the PATA Foundation will come under further scrutiny after its chairman Peter Semone quit at the end of August.

The executive board extended Hardy’s contract for three years from 1 January 2018, to 31 December 2020. He joined PATA in 2012 as a chief operating officer and was appointed chief executive officer 1 November 2014. It is very unlikely he will seek a new term after the current contract expires in 2020.

This year he announced a comprehensive restructuring of the association starting with the launch of a revamped website and digital services.

PATA also completes a complete brand overhaul, with an “emphasis on modernising and professionalising its image so that it appeals to newer and younger audiences.”

It is also launching a redesigned website, making it easier for members and prospective members to engage with PATA.

PATA organised and managed events attracted over 4,000 delegates in 2018. Also, PATA executives participated in or spoke at over 50 global events throughout the year.

PATA closed the 2018 financial year with total assets of USD1,664,484 compared with USD 1,827,940 in 2017.

Under US law PATA and the PATA Foundation are obliged to submit a form 990 declaration annually. The tax filing must be available for public inspection on request.

However, the IRS recommends that non-profit organisations post US Tax filings on their websites to ensure they are available for immediate public inspection.

The PATA website does not post US tax forms in the non-member areas of the website. In the case of the PATA Foundation, it posted the tax filings for 2010, 2011 and 2012 and has since failed to add subsequent filings.

PATA first decided to post US tax filings on its website in 2006 after being alerted to “clerical errors” in some filings that were subsequently corrected. At the time,  the PATA CEO promised to ensure tax filings would be made available on the website. Has the promise been forgotten over time?