30 Apr, 2013

PATA Seeks To Rebuild Value and Business, But Regaining Trust Will be Key

Imtiaz Muqbil

Graphs and charts indicating PATA’s Financial Status

BANGKOK — The PATA summit and its associated events, held in Bangkok between 25-28 April, closed on an optimistic note that the worst is over for the 62-year-old association and that best is yet to come. But the self-congratulatory back-thumping is tinged by a sense of caution that the optimism may be premature, the signs of recovery illusory and the global geopolitical/economic situation too fragile to give PATA’s revival plans a sense of permanence. Although Mr Martin Craigs, the Irish-born CEO, admits that it’s a long way to Tipperary, it will be a longer way still if PATA fails to learn from past mistakes, rebuild the trust of its members and align its agenda more clearly with the challenges and opportunities of the Asian Century.

On the surface, much is being done that looks good: the financial bleeding appears to have been stopped, new members are being signed up (such as Russia, a partner country), new chapters are opening up (Cambodia, Laos) and new partnerships are being forged (the UN World Tourism Organisation). The PATA Travel Mart 2014 has been confirmed for Siem Reap, Cambodia, the strategic forecasts will now be handled by the School of Hotel and Tourism Management, Hong Kong Polytechnic University. New slogans have been coined and the brand-image is being revived, thanks to Mr Craigs’ formidable PR skills and numerous photo-opps with ministers and CEOs worldwide. These efforts are being complemented by moves to reinvent PATA structures and processes to cope with the new realities.

On the flip side, the association is struggling to attract the emerging legions of young people. It appears to be still out of touch with the grassroots issues facing Asia. Its staff are over-worked and over-stretched. All three of its former revenue-generating USPs are under-performing. The annual conference, once the peak of Asia-Pacific travel events and now rebranded as a summit, has a long way to go to regain its former glory. The travel mart is generating much lower revenues, and the intelligence centre, which drained PATA coffers over the past three years, is hoping to start seeing some return on investment with the new statistical analysis tool, mPower.

Although designed to help PATA present a positive image and build consensus over the recovery path, the summit also clearly showed that the more things change, the more they remain the same. The biggest mistake remains PATA’s reluctance to clearly identify past mistakes and learn from them.

One of the greatest stories in the annals of global travel & tourism is why PATA, a once high-flying association that was the first to recognise the imminence of the Asian Century and pivot from the West to the East in 1998, went into such a perilous state of financial and membership decline even as the rest of Asia was rising, especially in the aftermath of the disastrous 1997 economic crisis. Asian governments which bore the brunt of that economic crisis have made “never again” a firm mantra. They know that the only way to avoid a déjà vu is to learn from the mistakes that led to it in the first place.

But PATA is showing no signs of following suit. Twice during the PATA summit, Mr. Craigs made it clear that he would focus only on the future and ignore the past. In his opening remarks at the summit, he said, “The ship is now seaworthy and repaired. We have taken a bit of a battering as we went through change. But let’s not think about that any more. Is it any surprise that a 62 year old organisation had go through change in an era of incredible change?” Later, he also told the AGM that he does “not want to look in the rear-view mirror.”

This blind spot means that PATA risks repeating past mistakes. Indeed, the summit offered proof that this is already happening.

One obvious mistake was the pricing of the summit. PATA claims that one of its primary value propositions is the opportunity to network. But by pricing the summit at an astronomical US$699 per person for PATA members, US$899 for Chapter members and US$1,299 for non-members, it stripped away all the low-income Asian companies and countries which need the most help in these difficult times. This mistake, the same as the one which led to the low turnout at the elitist CEO Challenge event in 2008, could have been averted by a closer look in the rear-view mirror. Participation from South Asia, for example, was negligible largely because the registration fees, plus hotel and air-fare worked out to phenomenal amounts in Indian, Pakistani, Nepalese or Bangladesh currencies. A stronger presence from these countries would have swelled the numbers, given the sponsors more bang for the buck and everyone a chance to network and hear PATA’s revival plans. The summit would have made a great comeback.

In addition to getting the price-product mix wrong, the summit suffered from a lack of interactivity. The panel sessions were dominated by CNN, a PATA premier partner, which rakes in huge advertising revenues from travel & tourism, especially Asia-Pacific NTOs and airlines. It gave the PATA summit free ad spots. In return, CNN anchorwoman Monita Rajpal got pride of place in moderating two panel sessions in the morning of the summit, and CNN Consultant Anita Mendiratta took centre stage at the afternoon panel.

However, after the formal presentations, both moderators hogged up nearly all the time available with their own questions. In fact, Ms Mendiratta did not take a single question from the floor, leaving the audience looking dull and bored. Several delegates complained. One Malaysian representative said people come to get new ideas, seek solutions for problems and hear alternative perspectives. She felt let-down.

Beyond the summit, the newly-coined phrase “complete visitor economy” is getting a mixed response. In concept, it resembles the “Total Tourism” slogan coined in 2004. Click here to see an entire paper on PATA’s “Total Tourism” in 2005. It also contradicts the requirements of the new era. The days of positioning tourism as a driver of economic growth are over. It is no longer about economy but ecology, especially if the five-times larger domestic-tourism numbers are included. If PATA shuts down today, it will have zero impact on global or Asia-Pacific visitor movements. It can, however, make a difference in ensuring that the region gains the support and resources to manage those numbers. That is not reflected in the “Complete Visitor Economy” slogan which, by dint of the word “economy” again suggests the usual – jobs, income and other economic drivers of tourism.

Another example of the mistaken agenda and inability to read Asia right is the advocacy platform, which has already suffered a setback. Almost from the day he took office, Mr. Craigs began railing against the UK Air Passenger Duty, accompanied by the World Travel & Tourism Council and the UNWTO. An expensive event was organised at the UK House of Commons alongside the November 2012 World Travel Market. Just recently, however, the UK government rebuffed all the harsh words and doubled the APD. Interestingly, Mr. Craigs did not mention the APD once during the entire summit.

Some steps to rectify past mistakes are being taken. One example is the revival of the chapter network. Dismantling the chapters in an attempt to make PATA an elitist organisation of/for CEOs was one of PATA’s most critical strategic mistakes and a major reason for its downfall. Rebuilding the chapters is a slow process, and will be directly related to PATA’s clear articulation of its own role in the future of a changing Asia.

More important than rebuilding chapters will be for PATA to rebuild the trust of its members. PATA’s marketing slogans and strategic objective say its main purpose as a membership organisation is to help build members’ business. Although building trust is a vital prerequisite for building a business, the word “trust” is rarely heard in PATA speeches and documents. PATA’s “Building the Business” future roadmap, published in 2010, does not mention the word “trust” once. The latest draft Business Plan mentions the word, but only once, within the context of a proposed “Values Statement” for PATA: “We act with courage, consistency and respect to do what is honest, fair and trustworthy.” Without analysing exactly why it lost members’ trust, it will be virtually impossible to regain it.

One example of this inter-relationship between trust, values and building the business came on April 28 during the Annual General Meeting, where board and executive board decisions are ratified. An issue arose over what appeared to be a minor procedural technicality involving the appointment of a vice-chairman to replace the outgoing Mr. Rick Antonson.

Making a comeback after a long illness, life member and long-time PATA stalwart Alwin Zecha showed he was as alert and vigilant as ever. He insisted that leaving the post vacant for several months until a replacement was appointed was a violation of PATA rules. In the subsequent exchange, he stood his ground, leading a visibly agitated Chairman João Manuel Costa Antunes to mistakenly say that a decision had already been reached by the executive board. That miffed Mr. Zecha even further because it conveyed the impression that the AGM was only a rubber-stamp body, beholden to do the executive board’s bidding. He reminded the meeting that it is the AGM, attended by dues-paying and voting members, which is PATA’s apex body. Mr Antunes then had to a backtrack, even while attempting to save face by citing his 40 years’ experience in chairing meetings. The issue was resolved, but it was a clear indicator that rules matter, and that democratic dissent and debate is good for PATA, as it once was.

Other mistakes await correction. Within PATA, the communications apparatus needs to be overhauled, which may now be possible with the imminent departure of Ken Scott, the communications consultant. The intelligence centre, once a useful and valuable service-provider, had virtually zero presence at the summit. Most of the really useful information was presented by external speakers in PATA’s committee and council meetings. Even the Youth Forum was more interesting and interactive, with some outstanding presentations, especially by the World Youth Student & Educational Travel Confederation.

A new era for PATA will require new people to bring in new ideas, new thinking and new policies. For Mr. Craigs, it will all boil down to identifying whom he can trust. A small group of committed members still value the benefits they gain, whether in terms of private profit or a higher profile, or both. At the other end, many of the same people who were responsible for sending PATA spiraling downhill still hold key positions in committees, boards and councils, continuing to do business as usual and ensuring they avoid all accountability. A study of PATA minutes and records will clearly show who they are.

Mr. Craigs who took office in October 2011, says the Asia-Pacific region is now “the sweet spot of global travel & tourism.” He describes PATA as a gymnasium where members can access the equipment as per their requirements. At the same time, he says, PATA has to make wise, long term decisions and deliver a balanced roadmap for the future. “PATA’s brightest days are ahead of us,” he declared.

Mr. Craigs deploys his communications skills well, especially in public forums requiring protocol and ego-massaging. This is an art. He has chosen to engage the media rather than ignore or confront it. He encourages transparency, and is the first to admit that he has little understanding about finance or procedural matters. However, he still has to establish a better sense of direction in the Asian Century and learn the lessons of past mistakes. Upon taking office, his start-off mantra was “No More Mr. Nice Guy”, a reference to the pugilistic attitude he planned to adopt against the UK’s APD. He lost that battle, but has no shortage of issues to tackle next.

Mr. Antunes pinpointed this in his opening remarks, “As PATA faces the challenges of ever changing times, and so does our planet, I cannot emphasise the role PATA plays in the regional and global arena for the past 60 years. PATA always strives to be the ideal platform to come together to discuss critical issues that impact our industry and examine ways to enhance cooperation. Only through the development of our synergy and spiritual consciousness will there be the way for true peace, harmony and unity in the world.”

10 FREE Ideas To Help Rehabilitate PATA and its events

Here are 10 out-of-the-box ideas that were gleaned from attending the numerous thought-provoking sessions during the PATA summit. All potential game-changers, the ideas can be easily implemented, be it by PATA or any other local, regional or global association.

• ONE-TOURIST, ONE-TREE: Mr. Thourn Sinan, Chairman of the Cambodian Chapter, said the chapter has launched a one-tourist one-tree programme under which it will plant one tree for every tourist who visits the country. This idea did not get more than three seconds of traction during the entire presentation, but it is has ripe potential to be expanded across the PATA region. Doing so will make a major contribution to the cause of environmental sustainability. Individual companies and club undertake similar exercises but to expand it across nations and regions would be a phenomenal undertaking.

• TEDx FORMAT: Change the format of the conference presentations to a TEDx format. Theme it as ideas worth spreading and give speakers 15 minutes maximum. This business is brimming with great ideas. Why not give them an outlet?

• FUND-RAISING: Why not hold a special auction of classic and unique travel and tourism products, such as luxury hotels, exotic tours and experiences. Target them at people both inside and outside the industry. If successful, such an auction could be made an annual or even biannual event. That would raise enough money both for the PATA Foundation as well as for regular PATA activities. If last week’s auction had been held in the foyer of the Centara shopping complex, it would have raised much more than the US$10,000 than it actually did.

• HUMAN RESOURCES: Much is being made of the International Labour Organisation’s new links with PATA. In reality, they are not new at all. In the 1970s, the ILO partnered with the UNDP and the TAT to set up the first Thai travel and tourism training institute in Chon Buri province. The ILO’s agenda today is to provide decent work for the global labour force. A study on labour conditions in travel & tourism is long overdue, to establish whether its economic impact is filtering down to the rank and file? That will help assess its contribution to poverty alleviation as well as address some of the underlying issues that hinder people from joining the industry, or from leaving prematurely to work in other industries.

• RESTRUCTURE THE COMMITTEES AND COUNCILS. These, too, have become forums for preaching to the converted. Some of the presentations I heard would be of greater use to a wider audience than just those in the room. It is exactly to get this kind of information that people come to these conferences. Why deny it to them?

• VOICE TO THE VOICELESS: When was the last time a taxi driver was invited to speak, or a tailor, or waitress? Or professional tour guide? Don’t they deserve a voice? What about NGOs and civil society members? In their own way, they all want to see travel & tourism flourish and improve. The industry ought to be mature and open-minded enough to give them a say.

• LOOKING BEYOND: Why not hear from those who do business with the travel and tourism industry? These could include everybody from artists and sculptors to musicians and spiritual leaders. This would be a great two-way communication platform and provide some food for thought on issues seldom raised in travel & tourism forums.

• EXPAND MEDIA COVERAGE: Give biannual briefings to the Foreign Correspondents Club of Thailand identifying key travel trends and key issues that are impacting the industry and use it as a forum to build relations with one the largest corps of journalists in Asia, as well as push industry agendas and policies. It will be the most cost-effective way to address a multiplicity of PATA agendas in one shot.

• NEXT-GENERATION CHALLENGES: Do a study of the Next Generation issues set to emerge in the Asian Century. These include social, cultural, environmental and geopolitical challenges, all of which will have an impact on travel and tourism well into the future.

• JOKES AND HUMOUR: This industry does not laugh at itself enough. It needs to lighten up. When was the last time you heard a good humourist regale us with travel and tourism jokes? Perhaps every once in awhile, but why not make it a regular feature? It will certainly create jobs for stand-up comedians, and God knows the world needs more of them these days.