One-On-One: Striking Up The Bass Brands

By Cheryl Rosen / September 05, 1999

One-On-One: Striking Up The Bass Brands

Following Bass Hotels & Resorts' recent promotion of Michael Prager to senior vice president of sales and revenue planning, the former vice president of sales planning and development for Inter-Continental Hotels and Resorts spoke with BTN executive editor Cheryl Rosen about his plans for establishing a single sales organization that will ease client access to Bass brands.

BTN: What's new with Holiday Inn and Inter-Continental?

Michael Prager: Holiday Inn and Inter-Continental are being merged into a new entity, Bass Hotels & Resorts. There's a trend within the travel industry toward the emergence of mega-brands, and this is a new mega-brand in the hotel sector. It's a bit of an alloy--it's not just Holiday made bigger, but a different business. Now we're actually looking at setting up a structure that will allow the group to function better in the markets in which it competes. And the corporate sector is clearly one of the most important drivers of business and of future success for the organization.

BTN: How will this new organization be different for corporate customers?

Prager: Much of what we're doing won't be felt directly by our customers, because really what we want to do as far as it is reasonable, is make the customer interaction seamless for an organization that's got 2,700 businesses operating in every corner of the world in various forms of affiliation, from wholly owned to franchise. It should not be incumbent upon the travel planners of the world to have to navigate around the internal workings of Bass Hotels & Resorts.

BTN: Corporate buyers have long decried the difficulty in negotiating chainwide hotel deals. Can you succeed where other chains have failed?

Prager: We're going to give it an honest try. The way our sales and revenue planning function is being developed is really in three work streams. These include revenue planning, which is entirely devoted to getting hotels to articulate their business aims, needs and desires in a way we can consolidate throughout the company, so we can bring the businesses together and accommodate their differences. One of the first activities we're involved in is getting some common ground in our business planning so that we can avoid the pitfall of going out and trying to sell business and then having our hotels say, "We didn't want that."

The second work stream is programs. A lot of the frustration that corporates feel in dealing with the hotel business is that everything has to be customized. So we're going to try to find that common ground that hopefully will emerge from the revenue planning process and create added-value programs for the corporate market, create rate structures that reward loyalty. We're going to be rebuilding the two corporate rate products of Inter-Continental and Holiday into something that spans all of Bass Hotels and Resorts. That's got to be done with proper consultation with clients and with opinion makers internally. It'll take a few months to become real, but we're working on it now.

The third work stream is the sales group. We'll assign one lead person to every major client. Will that make the difficulties you experience when you try to cut a deal that includes a franchise hotel in the Czech Republic go away? Probably not, but it might make it the exception rather than the rule.

BTN: What's new with your pilot project with IBM that captures folio data from Crowne Plazas? Are you personally involved in that?

Prager: Yes, that's on my plate as well. We absolutely are looking for an information capture that will allow us to provide electronic expense reporting and to make that part of our product offering. Whether it will be the product IBM is using, I'm not sure. But we are looking at providing folio information at a level of accuracy that the IRS will accept for tax purposes.

BTN: What other technology projects are you working on?

Prager: There's a big initiative to redesign the central reservation platform for the organization--that's huge, because at the moment Inter-Continental sits on a different reservation platform than Holiday. There's another project in the works to automate all of our sales operations, and various other projects on enhancing property management systems and integrating revenue management into that. There's a lot going on. And there's little question that more and more of our transactions will be handled in an e-commerce environment as the world moves in that direction.

BTN: I've heard people saying that this will be an important year for global brands, as corporate programs get increasingly international. Is that true?

Prager: Increasingly, automation and branding are joined at the hip, as more and more people are taken out of the transaction process. When that happens, you need some kind of vehicle that intrinsically lets customers know the values of the company from which they're buying. An overarching Bass identity emerges with that, particularly in a tradition that wants to purchase things with as few transactions as possible.

Brands were invented as a way of defining the products of a mass market by similar sets of characteristics. In the same sense, the nature of global brands is made manifest by the rush to consolidate every sector of the travel industry. Those global brands will become very powerful, very dominant. And they will stand for something, or they will fail.

BTN: How is the Internet affecting your business? What percent of your bookings are coming in online?

Prager: The percent of online bookings is still well under 10 percent. But if you look at the year-over-year growth, it's enormous, though it is off a tiny base. Still, if you look at the introduction of GDSs, they were at a flat line for about five years and then they just suddenly went vertical. I think the same thing will happen with online booking. But it won't take five years; it will probably take two.

BTN: Are you thinking at all about direct connections to corporate customers, with no GDS intermediary?

Prager: The way the business travel agency world works is due for an overhaul. Now I'm not against the travel agent; I actually think in many instances, particularly when travel is frequent and complex, there is currently no alternative to a good travel agent. The intermediary needs to be paid, and whether they are paid by means of commissions or by means of fees is almost moot. We happen to think commissions is not necessarily the best way going forward, but it doesn't alter anything if I pay the hotel $100 and it gives $10 back to the agent or if I pay the hotel $90 and the agent $10. It makes absolutely no difference. The drive for change is not coming from hotels, it's coming from corporations. How the organization wants to make its reservations is their call. But I do think the whole issue of travel costs will become part of future negotiations. If you insist on making your bookings in a way that's expensive for us to handle, that's going to have implications. We are all going to be driven to the lowest-cost transaction process.

BTN: Will you cut commissions?

Prager: We're certainly not going to cut agency commissions. We're all working on the theory that the intermediary has to be paid, and commissions is just one method. There are other methods, and those are between agents and their clients. Then the agents aren't agents anymore, they're brokers.

BTN: We hear talk of a softening market in Q1 2000. How do you see it?

Prager: I've heard that around the industry, but I'm not in any way alarmed by it. The cycles are getting much shorter and underlying demand all over the world is looking quite good. I'm pretty confident that the next three or four years are going to be rather good.

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