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BBT July/August 2018
July/August 2018
For Business, Corporate Travel & Meeting Buyers & Arrangers

ITM Conference: Sharing knowledge

This year's ITM conference asked buyers and suppliers to work together, reports Bob Papworth

The Institute of Travel & MeetIngs (ITM) chairman Jamie Hindhaugh used his organisation's annual conference at Heythrop Park Resort, in Oxfordshire, this April to make yet another impassioned plea for cross-sector unity within the business travel industry.

In his closing address to delegates, he said: "I just wish we could drop the labels - buyer, supplier and intermediaries - because we are all colleagues working in the travel industry."

Hindhaugh, head of sourcing at the BBC, who is stepping down as ITM chairman at the end of this year, has had an uphill struggle in his efforts to bring the business travel community closer together.

Although travel agency consortium Advantage Business Travel has signed up to the ITM-led Phoenix Group disaster recovery body - set up in the wake of last year's volcanic ash debacle - other organisations have been less inclined to collaborate.

Reviewing the past year, he said: "I have one big disappointment - it's around parity, and it's around the Guild of Travel Management Companies [GTMC]. We have approached the GTMC on a number of occasions, and we have even offered them a place on our board.

The disappointment is that after six months of negotiations they decided that they didn't want to be part of us - they see us as competitors."

Hindhaugh isn't giving up, however. He used his conference platform to exhort members of both organisations to lobby for greater co-operation in confronting inevitable future challenges.

"Whatever happens, it's going to be 'business as unusual'," he said. "I don't think there is any such thing as 'business as usual' any more."

Buyers

One conference session focused on 'thinking outside the box' and trying to understand the industry from a buyer's perspective. The panel included Nicola Lomas, director of corporate travel services for media group Omnicom and ITM chair-elect. Another buyer on the panel was Ike Ihenacho, head of travel at Nokia and then, to throw a different point of view into the mix, a supplier - Raj Sachdave, head of sales at Capita Business Travel.

Lomas insisted that corporate travel buyers need to be more forthright in their dealings with travel management companies (TMCs) and other suppliers, and that buyers should take the lead in TMC negotiations. She said: "Corporates need to decide what they want and then find the suppliers who can provide that. It's not a question of the TMC saying: 'If you had a global programme we could save you money,' if you don't want a global programme."

Lomas found an unlikely ally in Capita's Sachdave, who said: "We are constantly asked what our road-map is for the next 12 to 24 months and we say: 'No - tell us what you want from the next 12 to 24 months, and then we will map that out for you.' Don't ever be afraid to ask."

Nokia's Ihenacho added: "We are always seeking information from our suppliers to show us how we can improve our service - we are not rigid, we are open to change. In our industry, if you snooze, you lose."

Lomas also urged buyers to forge closer relationships with their TMCs. "TMCs have a lot of knowledge about what other clients are doing, and they recognise what could fit for others - it's a real 'soft' benefit," she said.

However, Sachdave warned: "It's hard to differentiate between one supplier and another. It's the responsibility of the supplier to create enough difference to enable buyers to make that choice."

Suppliers

Another session focused on what suppliers think about the industry and their thoughts on how processes and negotiations could be made simpler.

According to Emma Harris, director of sales and marketing for Eurostar, corporate travel buyers need to be more aware of the internal pressures their suppliers face. "It's about understanding and believing there are pressures at our end," she said. "We have to deliver a profit."

Harris said the key to successful negotiations was relationships, adding that buyers could be more proactive, helping their suppliers to build a business case to support the pricing. "It's not just about commission - our clients should know we fight as hard as we can to get them the best deals," she said.

During the session there was some criticism of the high turnover in sales staff, in the hotel industry especially, which makes it difficult for corporate buyers to develop relationships.

Stephen Hanton, managing director at BridgeStreet Worldwide, commented it was also a problem when buyers changed their suppliers frequently.

"Like a frequent change in employees, a frequent change in suppliers doesn't help," he said.

Crisis support

In the aftermath of the volcanic ash crisis, to act as an operational support group during times of crisis in the travel and meetings industry, the ITM's Phoenix Group was set up. Advantage Business Travel Centres is the crisis support partner for Phoenix, which was created in May last year.

Speaking at the conference Norman Gage, director of business travel at Advantage, said: "Advantage has honed its crisis support approach over the last few years after a number of incidents which have affected the industry in general and our members in particular.

It makes sense that we put that skill to greater use behind a project designed for the benefit of our whole industry and are proud to be working with ITM on this," he added.

Advantage will provide early-warning guidance when a crisis occurs and ongoing information and expertise as a crisis develops, through a dedicated ITM microsite that will launch in September this year.

ITM chairman Hindhaugh warned delegates: "Since we announced the creation of the Phoenix Group at last year's conference, we have been fortunate that no major crisis has had the impact that the ash cloud did, but it is only a matter of time".

Easy talking

EasyJet's chief executive officer Carolyn McCall gave a speech at the conference saying that the [airline] industry needs to keep being open to discussions with business travel buyers and managers about fares and services. When asked about corporate deals with easyJet, McCall said easyJet's prices were its discount. However, she added that easyJet would be targeting improved relations with TMCs in the future. "It is the only way to lower net travel costs," she said.

EasyJet has been courting the business traveller in recent months, following the launch of its flexible fares. The lower prices offered by no-frills carriers such as easyJet gives businesses an opportunity to tighten their travel budgets, McCall told ITM delegates.

But she explained, in a bid to start closer relationships within the business travel sector, easyJet has created a new head of sales position in the UK. The sales team is set to expand to seven people in the UK, with more teams based elsewhere in Europe.

McCall also added the airline would be unlikely ever to consider flying out of London's Heathrow airport because of its quick turnaround, and that it would not look too much further afield than Europe's fringes.

"The economics low-cost carriers can provide diminish on long-haul routes," said McCall. "Egypt, Morocco and Jordan are at the edges of what we can do."

Keynote speaker

The world may be getting smaller, but the travel industry is only going to get bigger - and travel professionals will have to adapt if they are to keep pace with demand, Institute of Travel & Meetings conference-goers were told.

Keynote speaker and undoubted star of the two-day show, Dr Ian Goldin, director of the Oxford Martin School, told delegates: "The key driver of everything in the future is turbo driven globalisation.

"The things that we think are 'cool' today are going to be redundant in two years' time."

Goldin, an academic whose CV includes stints at the World Bank and the European Bank for Reconstruction and Development (EBRD), predicted a massive surge in travel demand - both for business and leisure - within the next 10 years.

"I am optimistic that we will continue to see explosive growth in both domestic and international travel," he said.

"Two-thirds of the world's people are already less than two hours from a major city. By coming together, and thinking in new ways, they continue to discover new opportunities.

"In the past 20 years, although the world population has risen by 1.5 billion, economic growth has been even faster so, on average, people are better off. Of course inequality remains a major issue, but this is a period of renaissance."

By 2020, Goldin said, the world would have one billion more middle-class consumers than today. China, India and Brazil are well known to be growth centres, but Indonesia, the Philippines, Mexico, and even Egypt and Vietnam will contribute to the growing demand for travel.

There is, inevitably, a drawback. "There is a systemic risk," Goldin conceded. "Because of globalisation, a downside - such as a pandemic - that happens in one place will quickly affect other places. There will be a need to build resilience."