Clash of the titans

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From L-R: Gemma Greenwood, ITP; Sally Maltby, Centaur; Tom Clarke, Etihad; Iain Andrew, Dnata; Asim Arshad, Orient Travel; Vivid Riley, Fusion.

The Business Travel Show Dubai brought together a number of leading players from the corporate travel world and provided them with an opportunity to discuss issues affecting the rapidly expanding corporate travel industry.

Having established a reputation for sounding out hard-hitting issues impacting the Middle East's travel and tourism industry, ATN seized the opportunity to provide a forum for further constructive criticism and staged a roundtable involving decision-makers from the airline and corporate travel world on October 30.

Airline representation comprised Paul Starrs, regional manager Middle East, British Airways, Geert Boven, executive vice president sales & services, Etihad Airways and Andrew Cowen, CEO for Saudi Arabia-based low cost carrier (LCC) Sama.

They went head to head with five influential figureheads from local and regional Travel Management Companies (TMCs): Iain Andrew, divisional senior vice president, Dnata Travel Services, which partnered with Centaur Exhibitions to bring The Business Travel Show to Dubai; Ian Flint, head of global consulting, HRG; Derin Cameron, CEO, Alshamel Travel, Kuwait; Michel Oulevay, regional director of partners network MEA, Carlson Wagonlit Travel; and Asim Arshad, general manager, Orient Travel, Dubai.

What are some of the key challenges facing the corporate travel industry?

Andrew: The speed of the change we are seeing at the moment. If you look at how suddenly the European and US global decision makers who travel have woken up to the Middle East market, and are now coming here in their droves and expecting to see the same kind of service levels that they experience in other parts of the world.

For us, that is a challenge; to make sure we are keeping up with their expectations. If you look at the way Europe and the US has matured - gradually - they have picked up all of that and said ‘here you go Middle East, do it tomorrow'. We need to have that breadth of service in place.

Getting experienced travel counsellors will continue to be a challenge, particularly driven by the cost of accommodation - trying to find the right staff is hard. There are a number of corporates that have moved here and shifted their staff to Dubai.

They have been used to dealing with experienced travel counsellors in Europe. But often we employ staff from India, Sri Lanka or the Philippines who have flown to Dubai - perhaps for the first time ever -so that is the only experience of travel they have had, so you are teaching them from a very low base. We're all after very experienced travel counsellors but they are hard to come by and expensive to maintain.

Flint: It is a case of trying to adapt to the global viewpoint of these major organisations; they are very much looking at this region and they do have high expectations.

Cameron: The biggest challenge in our region is managing client expectations. Clients come here with the idea that they can do everything they do back home, but that is not the case. The client wants the best of both worlds - they are corporates, but they don't want to act like corporates - instead of using a corporate credit card for the their payment they end up running accounts receivables.

The service providers literally are transformed into banks in this part of the world, which is quite unique. In Europe and the US, your contract to sell the best available fare means exactly that, but here we contract to find the best available fare and confirm every seat that is not available. The counsellors end up spending half a day trying to call the airline managers and get the seats. The roles are not as clearly defined.

In the west there is a clear line between leisure travel and corporate travel that does not exist over here. Corporate rates for a carrier are higher because they come with a lot of benefits from an airline. In the Middle East corporates want the lowest fare plus everything else and that becomes a very interesting formula to manage.

Arshad: From a regional DMC perspective, the challenge for us is threefold. Firstly is the bottom line; HR costs have gone up tremendously, driven by real estate prices, but we have to improve the bottom line - that is the only way we can go forward.

The second challenge is that airlines have offered online discounting policies, encouraging customers to bypass DMCs and book direct. The third challenge is that clients are demanding quality service 24/7.

Are airlines bypassing TMCs and agents to lure more business direct?

Starrs: Our stance with the travel trade has always been trade neutral, so we don't want to preference corporate customers to come direct - in fact we are not set up to handle corporate business direct. Many agents in the Middle East have accused us of trying to get corporate business direct, but this is not what we want to do. Our preferred model is to deal through a number of preferred TMCs and give a professional service to corporates hand in hand with those TMCs. That is something we are in the process of doing now.

Boven: Etihad Airways has the same concept. We work closely with the TMCs and agencies - it is a matter of the type of service they are able to give. Within the GCC there are different requirements to Europe and the US, for example visa management. We are not always able to deliver those, so we work with the agents.

Arshad: The fact is that some airlines definitely encourage customers to go direct to them through various programmes and online discounting policies. I think we have a thin divide between the leisure business and corporate travel. We constantly have corporates coming to us saying ‘we can get a cheaper ticket from the airline directly than through you - why?' This is a challenge that we face.

Flint: If you take Europe or the US, you will always find the corporate client coming forward and saying ‘I can get a better fare on the web'. But actually, they can't. It looks that way because there is a teaser fare put on the web but when you go to book it, it is never there.

Andrew: You have to weigh up the number of benefits that we give as a professional TMC organisation, that the client can't get on the web. We have to make sure we are adding a full range of services, we charge a fee for those services, and we can justify that to our customers.

Oulevay: The good thing about these challenges is that we have to be very proactive and creative - we have to offer added value services like consulting services to our clients to benchmark their average ticket price on the route in order to try to negotiate better for next year, and to help them in negotiations with our suppliers; not only the airlines, but hotels too.

Cowen: We have the advantage of starting with a clean sheet of paper - our basic philosophy was that we were not going to tell passengers how they should book with us. We offer all the booking channels including agents. What we have done thereafter is the standard low cost approach of unbundling - which is really about them passing the cost of that channel onto the consumer. We recognise that some consumers are more comfortable booking through an agent or over the telephone, but of course there are differential costs in doing that - we simply pass that cost off as a service fee. That makes that channel revenue neutral. We offer agents the opportunity to book two ways; through an agent-dedicated internet portal or through Galileo.

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