4 Mar, 2008

PATA “CEO Challenge” Itself Facing A Challenge

Imtiaz Muqbil

The PATA CEO Challenge to be held April 29-30 in Bangkok is being hyped as the Asia-Pacific travel industry’s response to climate change. Whether or not the conference makes any difference to alleviating climate change, it is set to have a more immediate and significant bearing on the future of PATA.

In this dispatch:

1. PATA “CEO CHALLENGE” ITSELF FACING A CHALLENGE

2. PATA NOW IN “DAMAGE CONTROL” MODE, SAYS MARKETING EXPERT BERT VAN WALBEEK

3. DO WE HAVE AN EVENT? – TTR EXECUTIVE EDITOR DON ROSS TALKS TO PATA CEO PETER DE JONG

4. “WE ARE DELIGHTED WITH THE RESPONSE” – PATA CHAIRMAN BRIAN DEESON’S RESPONSE TO QUESTIONS BY EMAIL

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1. PATA “CEO CHALLENGE” ITSELF FACING A CHALLENGE

By Imtiaz Muqbil, Executive Editor, Travel Impact Newswire, and Don Ross, Executive Editor, Travel Trade Report.

The PATA CEO Challenge conference due to be held in April 29-30 in Bangkok is being hyped as the Asia-Pacific travel and tourism industry’s response to climate change, which PATA imposingly refers to as “the greatest threat to our world”. Whether or not the conference makes any difference to alleviating climate change, it is set to have a more immediate and significant bearing on the future of PATA.

Even as PATA chairman Brian Deeson and CEO Peter de Jong both seek to paint a positive picture with upbeat talk of how “delighted” they are with the response and how well everything is going, many of the original marketing, pricing and attendance goalposts are being shifted en masse in the drive to meet attendance and financial targets. Says Mr. Bert van Walbeek, a well-known marketing guru and member of the PATA Human Resources Advisory Council, “It reminds me of the many new hotels that I have seen which, before opening, first seek to grandiosely claim to be targeted only at business travellers and then realise that that’s not going to work and they need to start bringing in the tour groups, too.”

In written replies that appear to have been penned on his behalf by a member of the management staff, Mr. Deeson claims the conference is attracting broad-based and multi-sectoral support (see full text of the interview below). He now claims that it is not a numbers game, and that although conference is clearly positioned as a CEO Challenge, “it was never intended to be only attended by CEO’s but the CEO will drive the agenda.” He declined to provide attendance specifics, saying that numbers will not be released until the day the conference starts.

In a separate interview with TTR executive editor Don Ross, Mr. de Jong admitted that a number of things did not go according to plan. He says, “Yes we lost sleep over the programme input. We needed to get the right people to do a board room challenge event. It is based on demonstrating new ideas, successful initiatives and programmes. But we have those people on board now.” He added, “In retrospect, we needed to be out with the programme eight weeks earlier. A new event stands on the ability of its programme to attract CEO delegates. They need to see it before they will commit.”

HANDSOME PROFIT EXPECTED

In his report to the PATA board of directors last year, Mr de Jong estimated the inaugural event could attract 400 paying delegates with 70% garnered from within the 1,000 PATA membership and 30% from non-member organisations and companies. Partners, Burba Hotel Network and the Centre for Asia Pacific Aviation, were also given targets designed to push attendance to 500 paid-up delegates, which would have landed PATA a handsome profit on the event. Today, those original financial and attendance aspirations are in flux. At the time of writing, the numbers are in the vicinity of 100, far short of target.

The annual PATA conference has historically been among the association’s top three sources of revenues, the others being membership fees and the annual travel mart. Two years ago, the signature annual event was scrapped after a dispute with China about holding it in Taiwan, and last year there was no conference. This year, it was decided to reincarnate it in a “new, improved” format. As environmental issues made headlines all through 2007, especially in the light of the Stern report and the UN Forum on Combating Climate Change conference in Bali last December, it was decided that climate change would be an appropriate topic, and that the revamped event should be positioned as a high-level conference along the lines of the World Economic Forum in Davos. The attitude, said one PATA source, was to “build it and they will come.”

But the building process was plagued by design flaws and construction delays. Clear signs are emerging that PATA sought to make too much change in too many areas in too little time, and then complicated the task by doing too little research and setting too high expectations. Misjudgments were made in several areas — the level of interest in the subject of climate change as against all the other issues on the average CEO’s desk today, the amount of time it would take to organise, the difficulty of sourcing high-quality speakers, the conversion from a multi-sectoral, multi-topic conference covering a diversity of industry issues into a mono-theme format, the organisational format, and most significantly, the amount that people would be willing to invest to attend, in both time and money.

Staff departures added to the pressure. Just weeks after the last board of directors meeting in Bali in September 2007, at which Mr de Jong reported on how proud he was of his “strong management team” PATA lost two key executives: Assistant Director of Communications Ms Min Ming Wong, who left after only 11 months on the job, and the director of membership, Louise Butler, who left at the end of Nov 2007. A third consultant, Blaise Hopkinson, who had been hired as a communications director for the CEO Challenge, also quit after barely a few months.

Faced with a slow pickup rate, rumblings of concern among the board members, and a bungled attempt to gag media reports, PATA is now scrambling to top up the numbers, prove its critics wrong and salvage the huge egos involved. An early bird rate of US$ 1,390 that offered discounted registrations at US$ 500 off the regular fee was quietly made permanent after the deadline expired. PATA Chapters were sent letters offering both full PATA members and chapter members the US$ 1,390 registration fee as a “special incentive”. Initially budgeted costs are being cut back, especially the previous plan to pay speakers.

HIGHER LEVEL OF MEDIA CONTROL

One significant change over the former annual conferences involves a higher level of media control. Whereas the media once was eagerly welcomed and given free, open and transparent access to all the annual conference sessions, this time it is being restricted to an invitation-only status. Even then, invited media will be allowed only into the opening session and the closing press conference. “These media representatives will formally agree that their participation is as industry members and is to contribute to the objectives of the Challenge,” Mr Deeson said.

For an organisation with the depth of experience in holding travel conferences and the resource base that was available to it, all these misjudgements are surprising. According to Mr van Walbeek, the high registration fee clearly “was designed to keep the little guys out.” Now, he says, it’s a question of whether they (the participants) will get value for money. “When I look at the programme and the list of the speakers, I can log on to each of their company websites and I am sure I will find most of what they will have to say. There is not one speaker who would motivate me to go listen.” He added, “I think PATA underestimated the difficulties of getting the right kind of people to speak. By that time they started realising that they have a problem, it was too late.”

There appears to be little scope within the thematic structure of the conference to challenge conventional wisdom by presenting alternative perspectives. “The CEO Challenge is not a debating society – there are other platforms better placed to do that,” said Mr. Deeson. PATA may have had a different view had it sent a representative to the UNFCCC conference in Bali. That conference was enriched by its democratic expression of global ideas and initiatives, views and counterviews by civil society, private and public sector groups, politicians, media, bankers and investors. Even the most cursory look at its programme would have shown extensive opportunities to generate input, identify issues and source speakers for the CEO Challenge. Yet, Mr. Deeson says PATA decided not to attend but rather coordinate its views with the UNWTO. That was another misjudgement, as the UNWTO focused more on its own initiatives during its presentations in Bali.

“NOT A NUMBERS GAME”

At the moment, PATA management is in “damage control” mode, according to Mr. van Walbeek. It is trying to re-assert control over the message, put out a positive spin and prepare to explain it all away as part of a learning curve for a new and untested conference. In the stock-taking to come, much will depend on whether the PATA members and Board members seek accountability at the upcoming Board meeting in Colombo in April. While the “outcomes” will allow plenty of scope to be spin-doctored into rah-rah language hailing it as a huge success and contribution to climate change, the hard-nosed businessmen members of PATA may, if they can pluck up the courage, take a more sceptical approach and assess the results in relation to the expectations and projections spelled out in the original hype and the financial benefit achieved.

Asked if he would guarantee a “transparent and honest” breakdown of the attendance figures after the event, Mr. Deeson reiterated: “I said before that this is not a numbers game. It is about getting the right people to the event – the people who are passionate about the climate change issue and who want to make a difference.”

At the same time, Mr. Deeson indicated that if the conference does not deliver, the responsibility should lie with the entire board and not with CEO Peter de Jong. Asked point blank, he again dodged the question: “The CEO Challenge is an initiative strongly endorsed and supported by the Board and has been a long time in the planning to allow for the input of all ideas and concepts from all members to make sure that the event is as well developed as possible.”

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2. PATA NOW IN “DAMAGE CONTROL” MODE, SAYS MARKETING EXPERT BERT VAN WALBEEK

One of the Asia-Pacific’s top tourism marketing professionals says PATA is now in damage control mode as it seeks to meet the targets originally set out for the CEO Challenge conference. Mr Bert van Walbeek, Executive Director, the Winning Edge, and member of the PATA Human Resources Advisory Council, said in an interview: “Their first step, the idea of doing something different, was good but then there is a second step – conducting proper marketing research to identify what the customer really wants and what kind of price they would be willing to pay. I don’t think they did this well enough, if at all, and that’s where they put the cart before the horse.”

Moreover, he said, the subject of climate change and global warming “is too narrow and the industry despite all the media writing about it is not seriously interested in it. I also think that interest in the subject fizzled out after the Bali climate change conference. It appeared that PATA consciously or subconsciously was trying to compete with the UNWTO on the subject.”

Mr van Walbeek said the high registration fee of US$1,390 “was designed to keep the little guys out as a selection criteria. But now it’s a question of whether they (the participants) will get value for money. When I look at the programme and the list of the speakers, I can log on to each of their company websites and I am sure I will find most of what they will have to say. There is not one speaker who would motivate me to go listen.”

He added, “I think PATA underestimated the difficulties of getting the right kind of people to speak. By that time they started realising that they have a problem, it was too late. Then with a little arm-twisting, they started getting a few people in.”

Mr van Walbeek, a veteran hotelier, said the situation reminded him of the many new hotels that he had seen which, before opening, first sought to grandiosely position themselves only for business travellers and then realising that that’s not going to work and they would need to start bringing in some tour groups, too.

Being a full PATA member, he expressed strong hope that all the present publicity, both constructive and destructive, may help create more awareness and not only save the environment but also the conceptual idea behind the CEO Challenge. In any case, he said, global warming has to be a grassroots effort, not an elitist issue. It should not start with CEO’s but with frontline staff.

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3. DO WE HAVE AN EVENT? – TTR EXECUTIVE EDITOR DON ROSS TALKS TO PATA CEO PETER DE JONG

In February, Travel Trade Report Executive Editor Don Ross interviewed PATA CEO Peter de Jong about the CEO Challenge. This story is an updated version of the original report which appeared on the TTR website.

Pata CEO Peter de Jong believes he can muster 400 delegates for the CEO Challenge, while making a profit is not his immediate goal. With just seven weeks to go to Pata’s inaugural CEO Challenge event, the jury is still out on whether the organisers will sign up 400 paid up delegates to reach the original breakeven target.

Hosted 29 to 30 April here in Bangkok, the Pata Ceo Challenge has been lambasted in a series of Bangkok Post columns by respected journalist, Imtiaz Muqbil, who has repeatedly called on Pacific Asia Travel Association president and CEO, Peter de Jong, to assume full responsibility if the event fails financially to reach its target.

But Mr de Jong says he is losing no sleep over the criticism, or the slower than expected pick-up on registrations.

In an interview with TTR Weekly, the Pata CEO admits it “took more time than expected” to assemble a complicated meeting format and attract top CEOs to lead breakout sessions — a key element in the event’s make up. “Yes we lost sleep over the programme input. We needed to get the right people to do a board room challenge event, said Mr de Jong. “It is based on demonstrating new ideas, successful initiatives and programmes. But we have those people on board now.”

The importance of having at least 400 delegates is highlighted in the programme format. It requires 10 leading corporate CEOs to lead their own breakout sessions, attended by 30 to 40 executives. The scene is set in the plenary session when the CEOs give five-minute preambles on specific projects that address climate change to stimulate discussion in the breakout sessions.

“In retrospect, we needed to be out with the programme eight week earlier,” he said. “A new event stands on the ability of its programme to attract CEO delegates. They need to see it before they will commit.”

PROFITS NOT OUR PRIMARY CONCERN

In his report to the Pata board of directors, in April 2007, Mr de Jong estimated the inaugural event could attract between 400 and 500 paying delegates with 70% garnered from within the 1,000-strong Pata membership and 30% from non-member organisations and companies.

Mr de Jong stands by his original estimate, less than two months out from the event. Based on the strength of the programme, he claims the event should attract 400 plus delegates with Pata supplying 300 and its partner associations generating approximately 100 registrations.

Partners, Burba Hotel Network and the Centre for Asia Pacific Aviation, however, were not given exact targets. If the event secures 400 paid registrations, Pata would garner US$500,000 in revenue, compared with slightly under US$700,000 based on most optimistic scenario of 500 delegates.

Despite the initial rosy forecasts, he claims a financial loss on the inaugural event would not erode confidence at board level. “Truly, profit isn’t our primary focus or concern. It is neither about the numbers nor profit. If we don’t (make a profit), but have a great event we will be happy,” he explained. “I wouldn’t lose sleep over it. I have board support and I am convinced the CEO Challenge, given a chance, will succeed.”

He hinted that with two years left on his contract he would like to leave the association on a high note having established the CEO Challenge as a flagship event that would ultimately generate new corporate membership for the association.

One of the issues that could impact on enrolment is the proximity of the board of directors meeting in Sri Lanka, just a couple of weeks before the CEO Challenge. The board is made up of 75 travel executives, joined by at least another 25 committee members.

There are concerns that even committed board members may find it difficult to juggle time to attend both events. “The issue was hotly debated,” said Mr de Jong, who added the vote fell in favour of separating the board meeting and CEO Challenge. “It is an entirely separate event that should not be confused with the former conference- cum- board meeting format and our objective is to gain a new audience.”

DISCOUNTS OFFERED

Pata has since offered a 50% discount to board and committee members to encourage them to attend both events. “We recognise the demands upon time and resources and clearly we want our core members, who dedicate voluntary support to Pata, to sample the event firsthand,” he noted.

Mr de Jong rolled out the CEO Challenge programme late January and gained a confidence boost from daily CNN advertising in the Asia Pacific. CNN is a premier partner of Pata and will also assign its Asia Today, news anchor, Kristie Lu Stout, to moderate at the CEO Challenge. CNN provides a quota of TV spots, annually, as part of its premier partnership fee package.

The Tourism Authority of Thailand also paid Bt5 million to support the event. Pata is cross marketing with several travel and tourism membership organisations to boost registration. They include the American Hotels and Lodging Association, International Convention and Congress Association, the European Tour Operators Association, DMAI, an association for North American convention and visitors bureaus, and WYSE, a global trade organisation for youth, student and educational travel companies.

However, at the core of the promotion is the CEO Challenge website that reflects some of behind-the-scenes revisions designed to fine tune the registration drive.

An early bird discount for Pata members has been extended. The same discount is also available for delegates who are members of other associations. It does not specify the eligible associations. Delegates’ spouses are welcome to register and Pata’s life members are recognised with their own discounted registration fee. Initial references that suggested the event was catering only to CEOs have been modified to include second tier management.

USUAL PATA PADDING

Critics claim this is an example of the “usual Pata padding that blighted attendance records at its conferences.” Short of providing a transparent and honest breakdown, attendance figures could ultimately include media, spouses, and non-paid invitees to push the “official” figure beyond the 400 mark.

Pata’s management team appears to be shifting the emphasis from a poor registration performance, insisting that the tally is not the real issue at stake. They are now claiming the event could prosper with much less than the goal stated by the Pata CEO during the TTR Weekly interview. This may hint that his team is not singing off the same hymn sheet.

Mr de Jong, in his most recent statement, argues that the real message of the CEO Challenge is being lost in a media “fascination with internal Pata stuff and that’s too bad.”

“It’s all about connecting with industry leaders in the Asia Pacific and beyond on a vexing, but fixable problem – our industry’s carbon footprint. We have assembled a terrific line up of industry leaders to address this issue. If I had a wish it would be that the importance of the issue and Pata’s initiative to organise an ambitious event would gain some air time.”

Sentiments aside, an event of this calibre will fly only if it attracts registrations, lots of them. Mr de Jong and team have still some distance to cover to the finish line. Unofficial, but reliable estimates, suggested they have gained around 100 registrations by the end of February. They have 200 to go. When they reach that goal the industry will agree: “You have critical mass, you have an event.”

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4. “WE ARE DELIGHTED WITH THE RESPONSE” – PATA CHAIRMAN BRIAN DEESON’S RESPONSE TO QUESTIONS BY EMAIL

Q. What are the latest attendance figures? How many are fully paid? And unpaid?

A. It has been our practice to share attendance figures with the media at the commencement of our events. This is scheduled for April 29th for the CEO Challenge.

Q. In the interview with Don Ross, the CEO was quoted as saying that the programme should have been out eight weeks ahead. Why wasn’t it?

A. It is true that the design and implementation of this entirely new and innovative programme took considerably longer than we had expected or imagined. However, we are delighted with the response – as are many industry leaders judging by their participation.

Q. Climate change has long been a serious issue, with aviation being clearly in the line of fire. Why is there not a single mention of it in the CEO’s various speeches about aviation liberalisation all through 2006?

A. PATA has made regular references to “climate change” as an industry challenge. References can also be found in the PATA Strategic Plan 2008/2009. PATA also has a Sustainable Tourism Advisory Committee which actively reviews and advises our Board of Directors on climate change issues.

Q. What is the point of fixing the registration fee so high that smaller members like Vietnam, Cambodia, Laos and others, who could do with good ideas and tips, can clearly not afford to attend?

A. It is not our experience that so-called smaller members are staying away. In fact, we are pleased to note from current registrations that participation is not only cross-sectoral but also comes from large and small destinations and companies throughout our region.

Q. Would it be fair to say that the programme gives plenty of exposure opportunities for PATA’s Premier Partners and that most of the speakers are PATA members, partners, sponsors and/or sponsors of the two consultancy companies?

A. In each major industry category we have sought, and succeeded in, attracting true industry leaders, both PATA and non-members alike. Of course, this includes some of our own Premier Partners and leaders which our partner organisations can bring to the event. We are delighted that such reputable organisations as AHLA, WYSE, ETOA, ICCA, DMAI, etc and others have seen fit to endorse the event to their members which serves to illustrate their recognition and support for PATA’s initiative.

Q. Why is there no platform for debate and expression of contrary opinions? Why are no NGOs or tourism watchdog groups invited, especially those who are known to be vocal critics of the travel & tourism industry’s environmental record?

A. This is not the event’s purpose. The CEO Challenge is not a debating society – there are other platforms better placed to do that. The purpose of the CEO Challenge is to focus on the sharing of best practices, new initiatives and technologies by and between industry leaders in order to see these adopted and adapted by a greater number of companies. This, in turn, will help in practical, hands-on ways to mitigate our industry’s carbon footprint.

Q. Why did no one from PATA attend the UNFCCC conference in Bali last year, the most important environmental conference of the year?

A. PATA chose to participate actively in the UNWTO’s climate change conferences in Davos and London. As was agreed between UNWTO and ourselves, we channelled our views and input to the Bali conference through their organisation.

Q. Why is the media being restricted to an “invitation-only” status. I believe this is clearly designed to keep me out. Is that correct? If not, can I expect an invitation?

A. In order to create a compatible working environment for CEOs and industry leaders, we chose to limit free of charge media access to the opening session on the first day and to the press briefing at the conclusion of the second day. Selected media will be invited to participate on a fee-paying basis. These media representatives will formally agree that their participation is as industry members and is to contribute to the objectives of the challenge as I have briefly described in my reply to a previous question. We will not encourage them to use it as an opportunity to interview delegates.

Q. In hindsight, did PATA try to overachieve? Was it unrealistically optimistic about what could be done in the short frame of time since the “Challenge” was first conceptualised?

A. It’s more than premature to talk about hindsight when the event is still two months away! All indications are most encouraging. There is real excitement and interest in the industry about this opportunity to share practical and relevant information on the vexing climate change issue. We have secured the active participation of numerous industry heavyweights who do not usually attend PATA events and from first indications, I can assure you that we will have plenty of senior level participants to ensure that this is a meaningful event.

Q. Don Ross also indicates that the CEO is seeking to use the CEO Challenge to finish on a “high note” as he prepares for life after PATA. As the CEO will clearly seek to take credit if it is a great success, shouldn’t he also take the blame if it fails?

A. PATA is an organisation where the Board of Directors is closely consulted and canvassed on all initiatives. The CEO Challenge is an initiative strongly endorsed and supported by the Board and has been a long time in the planning to allow for the input of all ideas and concepts from all members to make sure that the event is as well developed as possible. Its success will reflect positively, not only on PATA, but on our industry as a whole for having come together and agreeing to cooperate on achievable and affordable initiatives to mitigate our negative environmental impact.

Q. I notice that among the many changes being made to attract registration, the early-bird scheme has now become permanent. Is this fair to those who specifically responded to the early-bird offer and paid up well before they would otherwise have?

A. We’ve had no comments or complaints.

Q. Isn’t the claim of this event being the “first” such opportunity for the “entire Asia-Pacific industry” an over-statement? PATA’s own sustainable tourism conference was held way back in 1991 and the association has been advocating sustainability long before the present CEO joined.

A. The format of the PATA Annual conference was not 100% dedicated to any theme so it wasn’t as focussed as the CEO Summit will be. This is the first time that senior decision makers from all the main sectors of our industry come together to share best practices, new technologies and innovations on the carbon reduction initiatives with the intent to share them with their peers – that what makes this such a unique event.

Q. Although the original concept was clearly to create a summit of CEOs, it now appears to be more “high-level officials”. Would it be fair to say that the title “CEO Challenge” no longer applies in the real sense of the term?

A. It was never intended to be only attended by CEO’s but the CEO will drive the agenda by sharing their initiatives and experiences. The CEO’s or sectoral leaders are the “Challengers” if you will.

Q. What is the specific criteria for attendance by non-paying members? As there will be a mix of paying and non-paying delegates, is it fair that the paying members should be subsidising the participation of the non-paying members?

A. In every trade event that I have attended there are always a few personalities who, by virtue of their extraordinary support of the event or of the host committee are invited. Our event is no different although FOC participation has been kept to a minimum.

Q. Don Ross reports: “Short of providing a transparent and honest breakdown, attendance figures could ultimately include media, spouses, and non-paid invitees to push the “official” figure beyond the 400 mark.” Will you guarantee a “transparent and honest” breakdown of the attendance figures after the event?

A. I said before that this is not a numbers game. It is about getting the right people to the event – the people who are passionate about the climate change issue and who want to make a difference. The outcome of our deliberations will be the measure of success not the number of participants.

Q. Of the 25 speakers and presenters, I counted only six who could be considered Asians. Even four of the speakers representing “Asia-Pacific” companies are non-Asians. Aren’t there are more born-and-brought-up Asians like Dr Pachauri who can reflect a grassroots Asian perspective? How would you explain this imbalance?

A. A majority of our presenters represent Asia Pacific companies or organisations or companies with a considerable stake in our region. That’s what counts not ethnicity. The climate change conundrum is a global issue not an Asia Pacific one and we also sought global travel industry personalities.