The foundation of the travel industry used to be the strong
bonds nurtured between the providers and the buyers of travel products and
services: Partnerships. Partnerships were the building blocks for many things.
They often guided communications and were key factors in the development of new
ideas and solutions for the industry and the resolution of problems faced
by—and sometimes between—buyers and suppliers. The importance of strengthening
those critical relationships was the core message for "Travel 101."
Now it appears that partnerships in the travel industry may be going the way of
the dinosaur. Extinction is only a matter of time, unless prevented by a change
in philosophy and in practice.
Is there a root cause behind this increasingly prevalent
atmosphere in the travel industry? The unfortunate shift in the buyer/provider
relationship isn't entirely unexpected. In recent years, several factors have
contributed to the erosion of the partnership model. A rollercoaster global
economy has affected the travel industry more adversely than other sectors.
Consolidation has led to fewer suppliers, and those that remain often have
altered business models to be less client-friendly. Advancements in technology
have helped expedite and enhance travel-related processes and reduce many
operational and other costs, but also have further diminished the importance
for human interaction. The bottom line and the ROI now apparently dwarf
interest in cultivating long-term relationships with buyers.
Buyers' practices have changed too. Business travel in many
cases now is judged as simply another commodity, with price the key determining
factor on provider selection. Promise little; demand everything. That seems to
be the pervasive driver behind too many agreements these days. Corporate
commitments to "preferred suppliers" continue to weaken as
relationships are flip-flopped, mainly due to pricing. All parties seem to have
forgotten that they rely on each other in good and bad times—for help, for
venting, for resolving issues. The value of or need for partnerships rapidly is
being pushed aside in favor of the "profit factor."
To many, the importance of working together to address
issues and find solutions has become overshadowed by an almost adversarial
relationship. There is no positive or beneficial outcome from these scenarios.
Historically, the travel industry worked best when it worked together—not when
the components were disjointed or in disarray. Of course, any provider of
travel services is allowed to pursue a reasonable profit. It's the value of a
free-enterprise system. Travel buyers should expect fair pricing and solid
service levels. The main elements valued by both sides and necessary for
workable agreements haven't changed, but the way such issues are addressed has
taken a new focus.
Of course, profit levels and cost-savings ratios are
critical components in any travel services discussion. However, it can be
argued that building and maintaining strong professional partnerships is
equally or more important in preserving long-term business arrangements.
Dual accountability should remain a key factor in any
business relationship. There should be no question about the ability of a
service provider to maintain or exceed service-level expectations or of a buyer
to deliver anticipated market share. It is a matter of give and take. It is
communication. It is a partnership.
Can partnerships in the travel industry be saved from
extinction? Absolutely. It is the concept from which this industry grew strong
and developed into a crucial element in the world economy. And, while travel
trade associations have an obligation to protect the requirements of their
unique constituents, regardless of differences we are co-dependent upon one
another. We must collaborate and develop solutions to make business travel more
productive, more cost-effective for buyers and more profitable for suppliers.
Rededication and commitment are necessary, as is open and frank communication
between all parties.
The travel industry continues to evolve as business
practices change to meet new needs, new standards and new expectations. We must
continue to reinvent the wheel. As for partnerships, if all parties contribute,
the classic model can and should be redesigned into an even better, more
dynamic business standard.
The repairs are long overdue, but it is not too late to
prevent the demise of the valuable partnerships in our industry. Frankly, I don't
want to be a dinosaur.
Kevin Maguire is
director of travel for intercollegiate athletics at The University of Texas at
Austin and vice president of the Global Business Travel Association.
This report
originally appeared in the May 2012 issue of Travel Procurement.