12 Apr, 2011

An Era Ends as Curtain Falls on PATA 60th Anniversary Bash in Beijing

Imtiaz Muqbil

BEIJING: As the PATA 60^th anniversary conference ended on April 12, it could well mark the end of an era in the annals of travel & tourism. An agenda for change in PATA has been approved, and positive signs are emerging, but given cost and organisational pressures, the conference is unlikely to be held again in its present format.

================

BEIJING: Just hours after PATA’s Interim CEO Bill Calderwood presented his strategy for change to the PATA Board members at the 60th anniversary conference here, the association’s carrier (airlines) committee opted to become a part of the solution. In his report to the PATA board, committee chairman Peter Hoslin said its members had agreed that the committee “lacked an identity and defined purpose.” Instead of having another meaningless discussion about “how fantastic the committee is and what great value members are getting,” the committee decided to voluntarily undertake a “fundamental rethink of the way it is structured and what it does.”

In a refreshing display of honest introspection, Mr. Hoslin, head of Airline Marketing at Abu Dhabi Airports Company, said the committee has set itself two months to review its purpose and suggest a way forward that makes it “more effective and more relevant.” Said Mr. Hoslin, “The airlines pay a lot for their membership fees and are not getting value for money. We need to have a rethink of this.”

The carriers’ move was significant in two ways for PATA, an association that is widely agreed to be at a life-and-death juncture. It reflected amongst the airlines 1) a clear desire to stay with PATA rather than just quit; and 2) to try and seek to improve it from within, starting with themselves. For the airlines’ unprecedented report to be presented to the board just hours after Mr. Calderwood briefed it on PATA’s new change agenda sent yet an unmistakeable signal that the airlines were willing to become a part of it and give it a chance to bear fruit.

Indeed, Mr. Calderwood’s focus on converting PATA into an organisation that helps members Build the Business (BTB) has been broadly welcomed, with the exception of a few cynics who dismissed it as being “nothing new”. Within barely five weeks of taking office on March 1 for an interim six-month period, Mr. Calderwood has produced a roadmap that capitalises on the diversity and depth of PATA’s sectoral and geographical membership and pinpoints its unique common denominator.

Says the Strategic Focus report (soon to be made public on the PATA website): “For all members, regardless of their size or complexity, building the business is a common need. They will simply value different parts of our service.” It adds, “By constantly applying the rule of ‘Will this help build business opportunities for our members?’ the superfluous activities and programmes can be easily identified and made redundant, thereby releasing resources for use in areas where they can be better deployed to in fact build business opportunities.”

Key To Survival

This focus on BTB for members holds the key to PATA’s survival. In 2010, membership declined by 8.5% and revenues fell by even more, yielding a US$412,145 deficit. According to Mr. Calderwood, while some of that could be attributed to the global economic crisis and members’ cost-cutting exercises, much of it was simply because members no longer saw any value in being members of PATA. The national tourism organisations and airlines are the biggest dues-paying members. The carriers admitted they saw little value, but opted to try and change that. Had they opted out, the NTOs would have followed, which would have been the end of PATA.

The 60th anniversary conference at the China World Hotel was dominated by a palpable sense of apprehension about the future, albeit mixed with a sense of realism and guarded optimism. No-one could deny that a problem exists but everyone had a different opinion on how to fix it. After setting aside the parochial politics and the cynical blame-game, much of the discussion boiled down to four points: How to retain existing members, bring in new (and younger) members, what services they can be provided, and how much they should pay?

The Strategic Focus certainly provides food for thought. Attending his first PATA conference, Craig Smith, CEO of Marriott Asia-Pacific, sat on both the Industry Council and Hospitality Committee. He admitted that he was there to assess the value Marriott is getting from its membership. Voicing surprise at seeing no-one from other major hotel groups like Inter-Continental and Starwood, Mr. Smith said: “We need a concerted effort to get the big players in here. If we don’t bring the large players then what is really the benefit of attending besides everyone seeing their friends every few years?” He said members should identify five companies they would like to see in PATA and bring them in.

He said Marriott would like a better quality of information, especially on travel trends. He called for more lobbying efforts which he said could be a core PATA strength. He also sought more networking opportunities. He said if PATA wishes to attract new companies and young members, it will need to be seen as being the best in its class for doing something or delivering a service that others cannot. Moreover, he said the CEO would need some kind of a 20:20 balanced scored benchmarking system against which performance could be evaluated. In the same vein, he also asked for clearer Key Performance Indicators to be set for the committees.

Another newcomer was Mario Hardy, Vice President of UBM Aviation, who said very simply: “The older generation possesses a lot of knowledge. They need to find ways of passing it on to the younger generation.”

A third newcomer was Ed Kastli, Senior Director, Academic and International Sales of the American Hotel & Lodging Educational Institute who had been brought along by Joe McInerney, the AHLA president and former PATA president. Mr. Kastli, 34, said he was attending his first PATA event. Apart from being absolutely “bowled over” by China’s economic progress and the quality of Chinese hospitality, he said he had sat in on the education and training committee and saw considerable potential for strengthening relations between PATA and AHLA.

Long Overdue

The carriers committee’s decision to embrace change and evaluate itself may spread to other parts of the PATA structure, which would also be long overdue. The composition of the committees, councils and the board, as well as their discussion agendas all appear to be ripe for a revolution. As part of the new winds of transparency blowing through PATA, the media was given access to these meetings. The need for change therein was very obvious indeed.

The board is so large that it takes anything up to 10 minutes just to complete the customary opening introductions. Much time then gets taken up by self-congratulatory speeches, welcome to new members, etc. In the committees and councils, time is expended on this plus internal technicalities such as nomination processes, rotation systems and by-laws. By the time all this is over, not much time is left for the real issues. This was the case in the Industry Council meeting which spent so much time on structural issues that the critical “building the business” agenda items (a Nielsen report on the China outbound market and a crisis management report) had to be rushed through in less than half their allocated time.

At cursory glance, the average age-group on these august bodies seems to be 55-60. Many have sat on them for years and clearly have a “let’s see where this goes” attitude. Mr Calderwood’s passionate presentation of the Future Strategic Focus did not arouse a single question, either in the board meeting or the annual general meeting.

In the board meeting, Deputy MD and head of the Office of Strategy Management Mr. John Koldowski dwelt for about 30 minutes on the Japan nuclear crisis in Fukushima, providing detailed explanation of a Richter earthquake measurement scale, the spread of radiation, and its impact on the Japanese economy. However, the ongoing Middle Eastern revolutions, with the very real impact they are having on global geopolitics and the immediate impact on oil prices, did not rate a single mention.

“We Will All Disappear”

While the carriers committee opted to look inwards in pursuit of change, the industry council chose to keep the same old faces in place. Meeting jointly with the hospitality committee, the council debated how long members should be eligible to hold on to their seat, based on a proposal that members would step down for a year before becoming eligible to stand again for another two years.

Mr. Kevin Murphy of Asiawide Hospitality Solutions, the hospitality committee chairman, said he supported the break. He said the committee badly needs to bring in younger people if it is to be truly representative of what is now a far broader and larger industry than what it once was. “It has to be an integral part of our responsibility for us all to ensure that there is an increasing percentage of younger PATA members in our organisation, committees and decision making. Otherwise we are going to get drier and will all disappear in our own smoke at some point. There has to be a mechanism to improve our penetration amongst the younger members of this industry.”

This was backed by Mr. Wong Soon Hwa of Hertz Asia Pacific who suggested that council members should be eligible to serve two consecutive two-year terms to be followed by a one-year break. That will open up the opportunity for new faces “or we will become known as an old boys club.”

However, Mr. Scott Supernaw of Tauck World Discovery acknowledged all these points but nevertheless saw no necessity for a one-year break. He said the key was to get active participants and that those who were sitting on the committees had spent their own money to come to these meetings and were hence displaying a commitment which should be respected.

Mr. Peter Semone, 45, who served as PATA’s VP for development between 2002-06, said he felt they were still talking the same issues as 15 years ago. “How about giving the young people a seat on the industry council,” he asked. He said he had first become involved with PATA many years ago as a much younger man. Today, just looking around the table, it appeared that PATA was “an old boys and an old ladies club.” He said, “This is a pretty daunting group of people to deal with. We need to extend our hands a bit and become more approachable.” That prompted another committee member to respond that young people don’t come to such forums and meetings. “They all deal with each other through technology,” he said.

After some discussion, it was agreed that council members could serve for consecutive two-year terms with no break but must attend at least two meetings during each term, or be dropped. If they cannot come personally, they can send a proxy. Effectively, this guarantees the council members a virtually permanent seat for as long as they remain PATA members.

While some things may change in PATA, others will clearly remain the same.

End of An Era

As the PATA 60th anniversary conference ended on April 12, it could well mark the end of an era in the annals of travel & tourism. Given cost and organisational pressures, the conference is unlikely to be held again in its present format. The overall event was a success in terms of the endorsement of the change agenda but generated mixed results otherwise.

The conference content was topical and relevant, but clearly not unique. Projected attendance figures were clearly over-stated. Dozens of seats lay empty in all the sessions as well as the welcome banquet, the opening ceremony and the Gold Awards lunch. That is a far cry from the 1997 PATA annual conference in Beijing when attendance broke all records. In those days, China was an awakening giant and needed PATA more than vice versa. Today, the reverse is the case.

In what has now become a race against time, Mr. Calderwood has to further narrow the strategic focus into a business plan and an even more finely prioritised action plan. A permanent CEO is being head-hunted. New openings are available for a director of membership and a regional director for Asia. As new people come in, some staff are expected to exit. Keeping PATA alive, relevant and focussed on building the business in the face of continuing changes in the global world order and ceaseless crises is going to be a tall order indeed.