Thursday, July 7, 2011

At Least Two Sides to Every Story - what's the moral?

At Least Two Sides to Every Story – is there a moral?

Distribution in the travel and tourism industry involves a complex set of factors. At the highest level, there are suppliers, distributors, technology enablers, travelers and miscellaneous vendors and capabilities such as credit card companies, airline clearinghouse plans and interline relationships, etc. At the lowest level it is merely a combination of traditional and online businesses all jockeying for the paying traveler so as to garner a profit for its shareholders.

Over the years, there has often been a tense and strained relationship amongst all the above, whether credit card companies raising their ‘points’ fees or GDS increasing booking fees. From a supplier perspective, each business should be able to evaluate its customer needs and identify valid ways to make a buck by putting its product and/or services to market in whichever manner(s) they see fit. From a distributor’s standpoint, their products and services should add value relative to client needs and they should be appropriately paid for their services. From a traveler’s viewpoint, they need accurate and timely data so as to make good decision relative to their travel planning and purchasing and should have choices as to how and when to buy, as well as at what price.

So far, this is not too extraordinary a situation vs any other industry. However, it becomes challenging and gains negative momentum when the various parties involved either do not see value in the current mechanisms available to shop, purchase and document travel – or simply believe the cost is not commensurate with the benefit. These are critical points since the “benefit” is often not clearly articulated or understood by one or more of the parties:
In the case of the traveler, amenities that we were previously part of an airfare or hotel stay and are now charged separately might cause angst and dissatisfaction. Similarly, as suppliers modify their products and desire to put them to market differently, the tools they previously used to distribute may no longer be adequate. For retailers, they are often caught without adequate payments for their services and struggle to make a return. And for the technology distribution companies, they possibly have not totally realized their role in the changed environment nor modified their businesses – whether from a products and services perspective or their business model - to support the needs of their constituents.  
That basic business model issues cause companies to wind up in court is a travesty. It wastes everyones time and money, negatively affects reputation, and results in fractured relationships that take many years to repair.   

What’s the moral?
Proceed in your own best interest, but carefully and unemotionally weigh the effectiveness of your decisions vs current market conditions. If you don’t like the conditions, then spend your time identifying ways to change them vs having courts or regulators decide your fate.  Stubbornly clinging to the way you wish it to be will not result in forward progress nor good business.
KM