5 May, 2008

PATA’S CEO Challenge: A Look Behind The Hype

Imtiaz Muqbil

Although the first PATA CEO Challenge organised in Bangkok between April 29-30 led to an outpouring of ideas and initiatives on the issue of climate change, it failed to deliver on many of its other promised goals.

In this dispatch:

1. PATA’S CEO CHALLENGE: A LOOK BEHIND THE HYPE

2. TWELVE REASONS WHY THE CEO CHALLENGE TRIPPED UP

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1. PATA’S CEO CHALLENGE: A LOOK BEHIND THE HYPE

By Imtiaz Muqbil, Executive Editor, Travel Impact Newswire, and Don Ross, Editor, TTR Weekly

[Imtiaz Muqbil and Don Ross were conferred the PATA journalism awards respectively in 2005 and 2003. Between them, they have covered PATA and the Asia-Pacific travel & tourism industry since the 1970s.]

Although the first PATA CEO Challenge organised in Bangkok between April 29-30 led to an outpouring of ideas and initiatives on the issue of climate change, it failed to deliver on many of its other promised goals. Behind the lofty words at the closing media conference — which ended with Thailand’s longest serving foreign correspondent point-blank telling PATA President and CEO Peter de Jong that he “was too much of a PR guy” — the CEO Challenge recorded the lowest turnout of paying delegates in the recent history of PATA annual conferences.

It emerged as a rich-man’s club that was shunned by most PATA members and board members, attracted virtually zero attendance from Asia’s smaller countries and companies and reflected few of the wider concerns facing Asia as it seeks to balance the concurrent demands of economic growth vs environmental protection, of which travel & tourism is only a part. Worse, while the management will seek to hype the upside, it knows it will not be held accountable for the downsides which would have cost PATA dearly had the Thai taxpayer not helped pick up a good chunk of the tab.

At the media briefing, the CEO Challenge predictably was hyped as a “landmark event” and “the beginning of something very significant.” The low turnout was classified as reflective of a “quality over quantity” approach. Over two days, a “peer group” of industry executives from heavyweight companies like Marriott, Cathay Pacific, Expedia, Banyan Tree, etc., shared “practical initiatives and ideas” to address this looming global problem.

For PATA, said Mr. de Jong, the real challenge has now begun as it will seek to synthesize the “information overload” and magnanimously pass it down through its various chapters to those members who could not spare the time or money to attend. Based on survey responses that are claimed to have given it a 97% “good to excellent” rating, the new-format concept has been declared a “success” and will be repeated, with further details to be discussed later about when, where, how and on what topic to organise future conferences.

A closer look indicates that the event fell far short of delivering on its marketing hype. According to the initial sales pitch, this was to be “first opportunity for the entire travel and tourism industry in Asia Pacific, across the private and public sectors, from NTOs to airlines, hotels to tour operators, to agree on practical solutions to confront climate change”. Internally, it also was intended to revive and reinvent the long-standing annual conference after a two-year hiatus, generate income for PATA and attract new members. But another critical purpose is not being publicly highlighted — to pave the way for Mr. de Jong to leave PATA on a “high note” at the end of 2009 when his contract ends.

PARTICIPATION

The conference was reportedly attended by 236 delegates, or 350 if padded out with the inclusion of media and accompanying persons. But of the 236 names on the delegate list, 62 are Thailand-based and include six PATA staff and one media consultant, 14 TAT and six Thai Airways staff. Hardly any airlines and no NTOs signed up from a number of countries, such as the Philippines, Indonesia, Vietnam, Laos, or Cambodia. The China National Tourism Administration sent three delegates. The Indian tourism ministry sent two. Not a single Asian travel industry association was present. After Thailand, Australia comprised the largest contingent with 26, Singapore 20, U.S. and Hong Kong 13 each, Malaysia 10 and UK and Canada, 9 each. South Pacific islands were well represented.

After excluding the speakers, moderators and sponsors, the actual list of paying participants was calculated at roughly 140, many of whom were roped in through some last minute arm-twisting and price-cutting. This was a pitiful result, given the huge marketing pitch through both trade and consumer channels, including TV air-time on CNN, seen by thousands of travel & tourism executives in the Asia-Pacific.

Although designed to attract CEOs, many of the CEOs listed are from the sponsoring companies. The keynote speaker, the 2007 Nobel Peace Prize co-winner Dr Rajendra Pachauri, who was making an unpaid appearance, cancelled at the last minute and sent a recorded video message. Others like Qantas CEO Geoff Dixon and Banyan Tree CEO Ho Kwon Ping also pulled out, sending subordinates instead. Joseph A. McInerney, President and CEO, American Hotel and Lodging Association, listed on the PATA website as praising the Challenge, did not show up. Thai Tourism Ministry Permanent Secretary Ms Sasithara Pichaichannarong was listed to speak on the original programme but did not make it on the final one.

PATA members themselves were in short supply. Only about 20 of the 80 PATA board members turned up, which was not surprising; they had been told right at the outset that the event primarily was designed for non-members in an effort to convert them into members.

The media was not allowed into the main workshops, except for the official media. Although only the opening ceremony and session were open, it was later discovered that TravelMole had a live weblink feed from the sessions which could be watched on the Internet.

CONTENT

Although many “practical solutions” emerged, the missing link was the question, “solutions to what?”

Dr Pachauri’s presentation, pre-recorded on a DVD, turned out to be an edited patchwork of the scientific conclusions of the UN Framework Convention on Climate Change, along with a number of implications for travel & tourism, such as the impact on coastlines, snow and ski resorts. His view was that it was important for the region to be now seen as part of the solution, rather than part of the problem.

Presentations by the two consultants, Anna Pollock and Rohit Talwar, contained a global perspective but offered no revolutionary revelations. The first session involved a line-up of six-minute presentations by 11 executive panellists all of whom presented their corporate solutions to climate change. But as noted earlier by marketing consultant Mr. Bert van Walbeek, much of the information can be downloaded from their respective corporate websites. Although Bangkok is home to some of the most respected foreign correspondents in Asia, the media personality chosen to moderate that panel was Kristie Lou Stout, a Hong Kong-based CNN anchor whose presence appeared to captivate delegates far more than the depth of her questions.

One delegate with links to the aviation industry who attended the workshops described the event as a boilerplate. He said most of the presentations were largely self-promotional PR, with many of the ideas being rather “simplistic and idealistic.” Attendance at the workshops and breakouts dwindled as the conference wore on. As he himself had not paid for it, he described it as a good networking opportunity. “If I was the CEO of my own company, I might have a different opinion,” he said.

Another delegate, Mr. John Felix, Senior VP of Emirates Holidays, called it a good event from which he came away “inspired and educated…..Inspired by the amount of initiatives being implemented by so many industry organisations (small & large) and individuals. Educated by increasing my own depth of knowledge on a subject that many of us know very little about. I can now bring this knowledge into my company.”

From a broader perspective, however, the event failed to place the “solutions” within the context of the environmental crisis facing the Asia-Pacific. Asia is today desperately in search of that balance between its economic growth/job-creation objectives and managing/preserving its finite natural resources. Rapid growth in recent decades, to which travel & tourism has contributed heavily, has aggravated deforestation, air and water pollution, urban sprawls, uncontrolled development of coastlines and encroachment in national parks.

At the same time, a number of home-grown, “alternative” solutions have emerged, only two of which were briefly mentioned in the opening sessions: the example of Bhutan and its former policy to limit tourist arrivals, and the “sufficiency economy” theory of Thailand’s King Bhumibhol. Other projects — such as the Heart of Borneo project launched jointly by Indonesia, Malaysia and Brunei, and China’s efforts to create a “Green” Olympics — were missing on the programme. Indeed, the only Asian face on the 11 member panel at the opening session was that of Mr. Renton de Alwis of the Sri Lankan tourism board.

At the media conference, Mr. de Jong was asked by TTR Editor Don Ross about the lack of an Asian presence. His reply: “The awareness of the importance of the climate change issue for industry, it’s fair to say, is perhaps a bit further advanced in the European and American markets and in the Australian and New Zealand markets. There is more pressure there from the consumer on this issue. There is more research and intelligence than currently exists in Asia. Which is one of the reasons why we wanted this to come to Asia to make sure that whatever best practises or learning curve that is there, are shared with or made available to Asia Pacific region as a whole.

“So you are right to suggest that in terms of member states, there were not perhaps as we might not have been as we liked. There will be more (in future) as the learning curve has been fast. But I remind all of us that the companies which were in the sessions all have Asia-Pacific responsibilities. So whether the nationality of the CEOs or their ethnicity may be wanting, it’s important that it should represent (like) Accor Asia-Pacific, that you are a regionally important player, and an operator in the Asia-Pacific. Or if you are Banyan Tree, no matter who represents you, you really are an Asian-based or Asian-centric company. So (there was) quite a bit of Asian participation regardless of who has put a face on that.”

In fact, Mr. Ross was not seeking an Asian face per se, but an Asian perspective. The only time this critical issue came up was when Michael Elliott, editor of TIME International, asked Anna Pollock what right the developed world had to tell the people of the developing world that they could not enjoy the same kind of economic growth and the same lifestyles as the developed countries, a lifestyle founded on environmental destruction and profligate use of cheap natural resources, mostly from the developing world.

Mr. Elliott’s question, by implication, went to the heart of the issues sweeping Asia today — why should Asia bear the cost, and pay the price, of global warming, a problem caused overwhelmingly by the GHG emissions of the developed countries. As the problems have emanated in the West, there is intense debate about whether the solutions should also come from the West, as Mr. de Jong seems to believe.

Had PATA sent a representative to the UNFCCC climate change conference in Bali last December and seen the intense stand-off on this central issue between the developed and developing countries, it would have known that. Had Dr Pachauri turned up, that question could have been posed to him. A debate may have allowed non-Asians to better understand the Asian perspective, and become part of the effort to lobby their own governments back home about the concerns of the developing countries.

To hold a conference in Asia, without involving more Asian personalities or highlighting strongly either the problems faced by Asia or the many home-grown Asian solutions, was one reason why many Asians shunned the CEO Challenge. Mr. de Jong’s comments make amply clear why the Challenge reflected a top-down, West-is-best attitude that many in Asia are finding increasingly patronising. For a 57-year-old organisation known as the Pacific Asia Travel Association not to have understood that is hugely puzzling.

RESULTS

The talk-fest ended without a single new initiative or innovative conclusion. Unlike the International Air Transport Association which just the previous week joined the industry’s other top leaders in signing a historic declaration at the 3rd Aviation and Environment Summit, the CEO Challenge offered nothing new or ground-breaking. Those who could afford to come certainly gained a networking opportunity and knowledge base. The small and medium sized enterprises which could not make it will be provided a repackaging of existing information, much of which anyway is widely available on the Internet.

[Editor’s Note: All the high-powered presentations from the IATA summit can be downloaded for free: http://www.enviro.aero/summitpresentations.aspx]

Mr. de Jong hailed the quality of information on best practices. But if that was the intended outcome, it may have been better to simply compile PATA’s own long list of Gold award winners for sustainable tourism, and add the many other past winners of prestigious awards such as the WTTC Tourism for Tomorrow Awards, the WTM Responsible Tourism awards and the many others worldwide, and burn it on to a CD for sale. All are prime examples of industry best practices. PATA probably would have generated largely the same result, used far less internal resources and made a handsome profit.

On May 1, the day after the Challenge closed, local news coverage of the event was minimal, mainly because there was nothing new to announce and the event was competing for space against a far more newsworthy environmental event: Indian superstar Amitabh Bachchan was in town for a Bollywood function and later proceeded to the UN regional commission HQ to plant a tree as part of the UN’s Billion Tree Campaign. No prizes for guessing which one got more coverage.

Mr. de Jong was later asked by Travel Impact Newswire Executive Editor Imtiaz Muqbil whether the turnout had reflected the “entire” industry, as claimed in the marketing pitch, and whether that word would continue to be used in the PATA communications going forward. His answer:

“We will continue to aspire to represent the entire industry and to make certain that the outcomes of this event are shared widely. This event was on the topic of climate change, not everyone is ready to commit their time to consider it perhaps the burning issue that we believe it is. So we have in PATA a very large mandate, responsibility and obligation of educating. And our largest single challenge will be to make sure that the results of this event are very carefully communicated to our chapters and members in those countries who are not here or could not be here.

“Perhaps if we choose a different topic next year, certain countries will have more interest in that particular issue. But the challenge can only be successful if it focuses on a single topic that the industry as a whole feels very strongly about as an opportunity or as a problem. It may change from year to year. It may focus more on the same things. Our delegates will tell us. This particular one was compelling or we would not have 250 some people in the event. Quite frankly, our target was higher than that but we are happy to have 250 as it was a very natural community for this type of event.

“So if the topic changes, perhaps we will have other representation around the room. Of if the topic is the same, more people from the industry who weren’t here will come back as they will know that this is also on their front burner and they need to be part of it. In fact, I suspect that as word of mouth, as they go home to their community, there will be a lot of interest to get access to what has been achieved in the past 48 hours. So the manner in which we communicate, and I also suspect that future CEO challenges will look to get a higher subscription. And we will have to deal with that, as we don’t really believe that we can grow this event much beyond its present numbers.”

Did that answer the question? You decide.

WHAT NEXT?

What this event will do for PATA is unclear, especially whether or not it attracts new members. Financially, according to one executive committee member, it is projected to make a loss of US$30-40,000, which would have been far worse had the Tourism Authority of Thailand and some Thai travel organisations not stepped in with funding support.

The key question is whether the PATA members and board members will seek proper accountability to probe the reason for the large gap between what was targeted and what was achieved, and whether the event was worth more than six months’ staff time of an already under-resourced and over-stretched organisation. In a report to the board at its last meeting in Colombo last April 7, Mr. de Jong had already signalled how the eventual outcome will be spun. He said, “The strategic benefit to PATA, quite apart from being seen as the creator and convenor of this high-level forum, will be to have connected and brought together several hundred industry leaders, among them many who had not previously or recently connected with PATA.”

Executive committee members, theoretically protectors of the association’s interests and custodians of members’ money, are rallying to shield themselves, and the management, from accountability. One member has indicated that they do not consider the projected loss to be worth making a fuss over. The board had already been told that as this was going to be a “first-time” event in a new format, there was a risk that it might not produce the desired results. The board was also presented with financial forecasts covering both best-case, worst-case scenarios. “In that sense, he (Mr. de Jong) covered himself well,” said one executive committee member.

The TAT, too, has indicated that it will not question the return on its investment, which was less than half that promised. TAT Advisor Mr. Udom Metatamrongsiri told the press conference that although the TAT had allocated 7 million baht, it had actually spent much less due to the lower than projected turnout. However, he said, overall the TAT considered it a good investment because it attracted many senior executives and media.

The best question and comment came from Denis Gray of the Associated Press, Thailand’s longest serving foreign correspondent, a veteran regional traveller and freelance writer for numerous travel and inflight magazines. Specifically directing his question at Ms Pollock, he asked: “How can an industry which is really hell-bent on growth, more hotels, more airlines, more of everything….how can it possibly help achieve anything more than a band-aid solution to climate change, especially when the industry is essentially unregulated?”

Before Ms Pollock could reply, Mr. de Jong interjected, “You certainly asked the right person to answer that.” Which prompted Mr. Gray to tell him why: “You are too much of a PR guy.” Laughter erupted all around.

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2. TWELVE REASONS WHY THE CHALLENGE TRIPPED UP

<> Failed To Give The Membership The Respect It Deserves: The former annual conference, which the CEO Challenge was designed to replace, was always a gathering of PATA member executives of all levels across all sectors with a diverse range of issues. Members could decide who should attend. The CEO Challenge went elitist, pursuing only CEOs. It also sought to raise PATA’s profile among non-members in an attempt to bring them in. As D-day neared and that policy began to backfire, Mr. de Jong was literally pleading with the board members to sign up.

<> Made It A Single Theme Issue: Another attempt to put all the eggs in one basket, this again narrowed the focus, and shrank the audience base. Climate change, while important, is not really a top-line, doing-business priority for any CEO these days.

<> Sought To Get Too High-Level Speakers: In order to attract CEO delegates, the event had to attract a level of speakers of CEO-level and higher. The original plan targeted Tony Blair, Mikhail Gorbachev and Rupert Murdoch. None worked out.

<> Charged Too Much And Then Started Cutting Prices. Convention organisers say that high registration fees usually guarantees there are no hangers-on, the delegates are serious and capable of providing input to the event. It usually ensures a high level of participation. To then start cutting the registration fee is fatal because it shows lack of commitment to the goal. It may add numbers but the event becomes unwieldy. That’s exactly what happened.

<> Split It With The Board Meeting: The PATA board meetings were always attached to the annual conference, allowing board members to cover both in one trip. This time, the board meeting was in Colombo on April 7-8 and the CEO Challenge in Bangkok, April 29-30. Not surprisingly, many board members couldn’t spare the time for both. Most opted for the board meeting.

<> Too Dominated By Sponsors And Premier Partners: As raising money for PATA was clearly a central aim of the conference, the sponsors and premier partners were prominently featured on the line-up of speakers.

<> Too Much Of A West-Is-Best Focus: The programme had almost insignificant Asian content and flavour. It’s almost as if Asia has little or nothing to offer by way of practical solutions to the climate change problem. They either did not look hard enough, or did not care.

<> Failed To Involve Debate: The discussions became a top-down mutual admiration club. Including other sectors like non-governmental organisations, of which there are plenty in Bangkok, would have provided an alternative viewpoint and encouraged debate, thus raising the intellectual value of the event.

<> Restricted The Media: Not only was the pre-event communications poor, the media was kept out of all the breakout sessions, which has never happened in the history of PATA conferences. As with Point 8, PATA clearly did not want the CEO Challengers to be challenged.

<> The Programme Was Finalised Way Too Late: The preliminary programme did not go up on the website until January, only four months before the event. By that time, conference organisers say, any event targeting this kind of an audience should be at least half subscribed.

<> Many Suggestions From Experienced Board Members Went Unheeded: Members were urging PATA management to be careful and do more homework about the entire product-pricing-positioning strategy before proceeding. Little was done. The event appeared to lack a credible and practical business plan.

<> Did Not Evaluate Carefully What Was The Real Agenda Behind It: The event had three objectives — to address a) the global challenge of climate change, b) the financial challenge of propping up PATA’s coffers and c) the personal challenge of paving the way for the end of Mr. Peter de Jong’s term on a “high note” at the end of 2009. PATA members will need to examine a little closely which “challenge” was being given most priority.