John Hubbs-Hurrell, Head of The Advantage Global Network joins us to talk about how accommodation supply is massively adapting to new demands with Travel Agents and TMCs at the front of this trend. Growth in demand for booking with travel agents is changing the dynamics of travel retail – what does this shift mean for the industry and packaging hotel products? In particular, we look at the wider consideration of accommodation from just hotels and why ROI is essential for corporate travel today. We also discuss the importance of protected travel bookings, the new packaging requirements and how this provides the opportunity for TMCs to truly rebrand.
The Advantage Global Network connects corporate clients to travel management experts around the world. Its network of TMCs employs over 30,000 people in over 80 countries.
We discuss:
1. The trends in demand and client sentiment
2. Customer value and total trip management, and the importance of hotel ancillaries
3. Giving the right traveller experience
4. Move from static rate codes to dynamic rates
Program Notes
Ryan Haynes:
Welcome to Travel Market Life. I'm your host, Ryan Haynes and today's episode. We are going to be looking at global accommodation programs and TMCs. We've John Hubbs-Hurrell the Head of The Advantage Global Network. The Advantage Global Network connects corporate clients to travel management experts around the world. Its network of TMCs employs over 30,000 people in over 80 countries. We're going to be looking at trends in demand and client sentiment the attention on customer value and the growing focus on hotel distilleries and dynamic hotel rates,
Ryan Haynes:
John, thanks ever so much for joining us today. I mean, it's been a very interesting year so far. We've had to react to many different things than we had to last year, particularly the current situation around cancellations. How are you and your team responding to this effectively and working with the industry?
John Hubbs-Hurrell:
Well, hi Ryan, thank you for having me today. It's an, it's an interesting question. You ask, obviously, a lot of, you know, media coverage in terms of cancellations and amendments. Obviously, a lot of people have been displaced because of it, but we all find the needs that our members have never been busier when it comes to obviously dealing with this sort of thing. But it also puts a, you know, the TMC or the travel management company and travel agent at the very heart of the solution and also, the sort of the whole environment, the travel environment and places of greater importance, obviously on their role. So, you know, we have seen that, you know, where the cancellation comes place, the travel agent steps in there are obviously it's been a lot of time to reprotect passengers making bookings in good faith because at the end of the day, you know, they will sell what is available in the system, but it has been a very, very busy period for them, which has been good when you consider, obviously the last two years have been in a very, very slow and very little travel going on.
John Hubbs-Hurrell:
Board has been closed. So it's, it's obviously a welcome return for travel, but it also comes with, you know, some frustrations around the fact that obviously, although that's been done is to reprotect passengers rather than getting them away at,
Ryan Haynes:
I mean, travel agents have, we've seen this growth in demand for travel agents, as you say, around that protection or the booking, having someone they can actually talk to and reach out to unlike some of the online portals, but travel agents have been getting a bit of a battering, unfortunately from the media for almost selling a product that isn't necessarily available. But, and as you say, you know, they're only selling what's there and what's on the system. And, as such, they're also able to support customers much more. Now, this a really reverse trend to what we saw 20 years ago with the emergence of the budget airlines and the OTAs where there's a lot of south booking.
Ryan Haynes:
Are we really seeing that shift back now more to people wanting to have that security with travel agents and packages that are protected?
John Hubbs-Hurrell:
Definitely. You know, one of the things that obviously come back is obviously travelling confidence. You know, if you've had a period of time where you may have booked something directly, because you felt confident to package your own arrangements, and then obviously you're having to deal with multiple moving parts within that transaction, by buying it, buying a package or, or booking through a travel agent. You know, you've got a lot more sort of coverage there in terms of comfort that, you know, someone is really going to step in and look after you. So I, I do think if anything has come out of the pandemic obviously is that, you know, that the need to reengage with, with a travel professional travel agent who can help you have all those moving parts of travel, because it's not just about, you know, the, the flight or the hotel, it's about all the other bits and pieces that go with it.
John Hubbs-Hurrell:
When you think obviously, you know, you're booking a car train or whatever to get to the airport, then your airport experience, then your hotel, the other end transfers are going car. There's a lot to think about. And therefore, you know, the whole sort of infrastructure sits very well within the travel agent. And I, you know, I do believe that you know, you know, this has been almost like a rebirth of the travel agent. Now, the industry has had a very sort of flat period, and we're now back in an area where the travel management company or the travel agent can rebrand themselves as that trusted advisor to the traveller and also the corporate customer as well.
Ryan Haynes:
I mean, the reason why we set up Travel Market Life was to be able to look at the fact that the travel is an ecosystem with so many different players and so many different segments, and we all really need to understand each of those and how they all work together and really support one another to bring in the industry back after such a restricted time of, of travel and movement. Now, you know, the big issue that we're experiencing as we've seen with the airports and the airlines, but also within the hospitality is this shortage of staff. How do you sort of see that we can sort of rebrand travel or, or really sort of ignite that interest amongst the, the new generation up and coming and attract new talent to the industry?
John Hubbs-Hurrell:
Well, I think it's a really good question. And it's a conundrum that has been discussed and trying to still be resolved now since the beginning of the year, you know, as soon as partial way through, obviously the last couple of years, you know, when we started to see that, that the components were being rebuilt, one thing to have, as you point out, you know, this, this obviously podcasts or propagate propagates a club is a global problem. Okay. It's not just obviously the UK, we sit in the UK today. We're talking about it from a UK perspective, lots of media coverage, obviously on, on queues cancellations, that sort of thing. But the industry as a whole has been suffering before that in terms of attracting talent.
John Hubbs-Hurrell:
So I think what we need to do is we need to certainly obviously offer a, make it attractive. We need to appeal to a younger audience. I think one of the things that we can do there is obviously, you know, install sort of more tech-related systems to, to become enablers. I know that obviously contradicts what we're saying earlier about, you know, putting the TMC at the heart of everything you do for your customer. We can still do that, but you need to make sure that you know, that there is a certain amount of, you know, comfort being in the industry. I think a lot of people stepped away because they felt it was quite volatile. That last two and a half years obviously have seen people move to sectors that are considered to be maybe a safe Haven.
John Hubbs-Hurrell:
Everyone's got commitments, obviously they're one's way, but we've got to make it attractive. We've got to ensure that people that have left the industry that they've left, but maybe they haven't left for forever. You know, maybe there is something that we can draw them back in. You know, people that are in the industry loved being in the string industry. They've got a passion for travel that passion has got to come through, but we have to start appealing to a, you know, a younger, a younger audience to try and bring them in a lot earlier, perhaps even, you know, from university and colleges, schools, that sort of thing to, to make the industry, you know, to that a little bit more attractive to them and say, that is a, it is a secure job that offers multiple areas.
John Hubbs-Hurrell:
You've touched on it earlier. You know, we've hospitality, you know, the hotel sector, airlines, airport infrastructure, I think, you know, need to make it attractive. We've need to make it a job that is seen as being interesting and very sort of customer-friendly, you know, that sort of role. And I think, you know, it, it has got a future providing us if we had the right conversations at lower level. And we knew through the sort of education services as well.
Ryan Haynes:
I mean, I'm glad that you touched on technology being such an important component because I think that does attract the new generation much more. So they're not going to work on pen and paper. They might much prefer working on, you know, smart applications and devices and, and being able to see a lot of the administrative stuff, just move a lot faster than the traditional repetitive manual process that we've had before and have been so stuck within the industry. One of the interesting points that you made was the fact that some of these TMCs and agents are really now able to sort of rebrand themselves. And I was only having a conversation with a journalist a couple of days ago around what can the industry do to get greater faith in what it's offering, what is delivering and, and, and I guess this is all part of it, isn't it, it's, it's about showing the promise and commitment and support that you provide to your customers.
Ryan Haynes:
And, and how are you seeing that most effective for really getting consumer buy-in or, or customer buy-in in, in, in, in that trust that you can provide?
John Hubbs-Hurrell:
Well, I think you said, you know, you, you become the trusted advisor, you know, it's no longer a transactional type arrangement. You have to be that trusted advisor or of the traveller, whether that be corporate or leisure, you've got to obviously have that, get the advocacy there that's they don't want to do that independently themselves anymore. So I think through good communication, good discussions, we've with we, the travellers understanding obviously what their needs are, making sure that you're looking after the members every step of the way. And you know, we talk about total trip management withinthe advantage, but it is fundamental to ensure in your getting your travel from a to B, there are no, you know, sort of breaks in, in the journey.
John Hubbs-Hurrell:
Now you're still gonna have people that are going to want to be independent and do some bits and pieces themselves or do the research through you. And then also, but it's the support. It's making sure you're available to them 24 7. And, you know, in the event that something goes wrong, a cancellation, you have the information at your fingertips ready to support them and, and provide them with an alternative or communicate with them. So I think it's key. It's key that obviously that the TMCs or travel management companies are available for their travellers and the travelling community, but obviously making sure they're in tune with what they need and looking after them every step of the way.
Ryan Haynes:
I mean, it's funny because the, one of the first questions I said, we're going to ask us about the trends that we're seeing and really, you know, we're not talking about trends around numeric trends around the, the necessarily the focus of demand, but really how as an organisation and as an industry, how we're behaving and how that is adapting. But the demand is certainly changing as well. You've had some recent data that certainly compares the last couple of years. You know, we, we, we, we were in a very restricted travel position in first quarter of last year. We've opened up significantly this year. What are some of the key behaviours you're seeing around travel buying?
John Hubbs-Hurrell:
Well, I think that if you've hit the nail on the head there, you know, going back to sort of the first quarter of last year versus this year, understandably, you will see that, you know, where there are some international markets that weren't open, you know, there's been an increase in bookings that have been stimulated, you know, average daily rates increasing in other markets though. You'll, you'll see that. There's probably been a little bit of a retraction and the reason has been a retraction sort of the sort of average daily rate is the fact that some properties or what we're focusing on are being open. So they were open to, you know, supporting key workers and, and key industries, or there were fewer hotels available in, in that particular city, in that particular market.
John Hubbs-Hurrell:
And therefore the rate was fairly high then, but now we've had a, a full opening where, you know, 99% of the hotels are now open and therefore there's competition in the market. So you will see some peaks and troughs. It's not an exact science in that, you know, everyone's suddenly rocketed up and paying more for their hotels because it, it will very be variable depending on the market that you're looking at, but what we have seen, and obviously it's clear, you know, where there's been opens the borders of the US, in particular, is as an example, you know, that's been, you know, stimulated at the growth there, New York, for example, very, very high sort of average daily rate increase.
John Hubbs-Hurrell:
And the reason for that is that obviously European travellers, UK travellers, and are able to access the U S and the pipe, their part, and obviously stimulating that, you know, and, you know, it's an opportunity for the hoteliers, you know, for, for two years. So, you know, some have been closed, some have been trading completely down we've, we've low occupancy. Why not the right rates there it's, it really is a supply and demand type arrangement at the moment. And you will find that w w will be variable as we go through sort of the month to month, the quarter by quarter, we'll start to see obviously differences in, in, in key markets. And I expect to see, you know, where the lights of Asia really only coming into in, in, in last couple of months and, and, you know, still some markets to open up that they will probably be towards the latter part that we start to see some, some of those cities appear in the data, but for the most part at the moment, obviously we're seeing a decent occupancy across the UK.
John Hubbs-Hurrell:
We understand that people are traveling, whether that be for leisure. We've also seen that, you know, there is a return to what they call more collaborative travel, you know, where people are traveling to, you know, internally to, to, to meet with colleagues and, and have team meetings or conferences, that sort of thing. And all of this is obviously fueling the demand and pushing up the average daily rates.
Ryan Haynes:
I mean, you mentioned as well that there's a greater attention on customer value and particularly total trip management, one of the aspects there being a hotel. Incendiaries how important is that to revenue generation and overall customer customer value that you're seeing?
John Hubbs-Hurrell:
Well, I think, I think it's massive and I, you know, I wouldn't like to just concentrate just on, on, on the hotel pastes, you know, let's talk about accommodation because I think one of the key things is, you know, w with a return in market and, you know, we are still in a returning market. You know, when we, when we talk about obviously where we are, you know, from a, from a travel management perspective, you know, the average that we see across the globe is, you know, most of the TMCs are sitting around about 50%, although in 2019. Okay. So it's about accommodation. Okay. And that includes apartments and also hotels. Now, th the sort of the retail inside of that, and, and the additional ancillaries on ons that are around the fact that, you know, people and staying in hotels in the past may have not wanted to use internal services because also they didn't want to go to the buffet.
John Hubbs-Hurrell:
Wouldn't do this. So obviously internally, you know, there is probably more, more requirement for that. But also, as I said, the, you know, the interesting thing is that the, the, the resurgence and an increasing demand on apartments service departments, where perhaps people feel more, you know, at home where they can, you know, cook for themselves, they haven't got to go down sort of a restaurant bar, that sort of thing, but also a lot of the space of increasing as well. So if people are now, you know, staying, you know, for four or five nights, you know, why not have the service department and, you know, be a little bit more self-sufficient then obviously staying in the hotel. But that said, as I said, that the spaces are getting longer.
John Hubbs-Hurrell:
And therefore what we've we've managed to do as part of our hotel program, talking to hoteliers is inject a lot more soft benefits into the actual program. So, you know, it makes it attractive for the corporate traveler. Our program mainly is directed toward the corporate travel, but there are some related users as well. So that might include some stuff, stuff kind of fits that, maybe enhanced wifi, a room, upgrade, you know, food, food, and beverage credits or something else as well, maybe a spar credit if they, if they, if they needed it. But there is a huge opportunity, you know, where, where people are returning to hotels, they are able to obviously, you know, entice the traveler into, you know, the bar and the, you know, the, the restaurants now, which previously wasn't there in the past.
Ryan Haynes:
I mean, I just read a report that they're expecting that the corporate travel won't necessarily return until about 20, 26 now, which is a lot later than what they indicated sometime last year. Obviously you've already noticed that there's been a change in accommodation requirements. Cause we are looking at a wider range of different types of accommodation. I, myself as well, certainly spending more time traveling rather than just a one overnight stay, because it's just all too much for me really to try and do a 24 hour return. I've also overheard people at different events, you know, talking about how travel policies are changed. Are you seeing that across corporations, that they are giving their, their staff or their employees or, or travelers themselves.
Ryan Haynes:
So sort of giving themselves a bit more breathing space than they had before.
John Hubbs-Hurrell:
Yeah, I think there's a lot more consideration, obviously when you ask someone to travel for the business that, you know, when you're putting the program together, the world has changed. Okay. So, you know, most people are accepting of the fact that they're going to start traveling again. And if they, if they were traveling before, you know, but corporates are, are wanting to ensure that obviously there is a certain amount of duty of care and wellbeing injected into a program and looking after their travelers, when, you know, when they're on the road that say, so, you know, we, you know, who've injected a lot of that into that program and made sure we work with suppliers that can accommodate, you know, the duty of care part, you know, the wellbeing part to, to look after travelers, but trips, trips are sort of are being put in place on a, on an ROI basis.
John Hubbs-Hurrell:
So, whereas before maybe there was a, you know, the neatest, oh, you can go here today and back the next day more considerations to, to, to sort of work through the fact that, you know, is the trip beneficial. Yes, it is. We're going to get an ROI on this, you know, you know, how, how has our traveling going to affair when, you know, when they're going over a be on the, on the road for us and a lot more consideration, I think to, you know, looking after looking after the traveler.
Ryan Haynes:
Oh, absolutely. I mean, one of the things that we always note, particularly for a marketing and sales budget perspective is how much has the traveling, traveling and accommodation budget and what is the return that you're getting from that, and that has not necessarily been so transparent before, but you are seeing much more focused on who you're sending, what you're looking at, getting from that travel and then monitoring that, that revenue that you're getting now, what are the other things that were shit we're seeing over the last couple of years that you've mentioned is the use is changing use of static rate codes. How are you seeing the role of dynamic rates today?
John Hubbs-Hurrell:
Well, I think that's, that's a real, it's a really interesting point because, you know, we, we talk about the corporate customer and new, we're talking about a static rates there that's, you know, in the past, you know, corporates or some corporates anyway, was negotiate their own programs based on volume that they had traditionally, you know, put into a particular hotel. And, you know, I, I do a hundred new room nights with you. You give me a deal, that sort of thing. It's a very flat rate. The fact is the, you know, we've discussed over the last sort of two years in west three now, you know, that, is there a price deal for a static rate code? There might be, you know, if there is a sizeable volume, but at the moment, the way that obviously occupancy is, and the way that, you know, availability is there, that, you know, it doesn't necessarily always make sense for a static, great code to be used.
John Hubbs-Hurrell:
And therefore talking with my, The Advantage global hotel program hat on that, you know, when you, when you are looking at a rate program, it's sometimes it's better to actually diversify obviously where you're, you're putting your travelers and look at programs where the, the, the, the, the negotiation has been done on a, a far greater volume, rather than the sort of static negotiations that you've done on a much smaller, but it also gives you a more choice as well. So yes, you can still see, maintain the loyalty with, you know, with certain brands, if that's what your travelers need, but it's all about the price at the end of the day. And what we will find is that obviously static rate codes do not offer a lot of flexibility or a lot of inclusions either.
John Hubbs-Hurrell:
Whereas, you know, a more dynamic sort of pricing model will not only save money, but obviously provide you with a choice and also can, you know, direct you in a way that might be best suited, obviously for the wellbeing and the D and I obviously have your, of your workforce. So yeah, I think, you know, dynamic rates are here. I think there'll, there'll be greater uptake. We've seen that already. And, you know, it was any beat will be on the sizeable programs that really we'll static coach from mine,
Ryan Haynes:
John. I mean, I, I, there's so much more, I could talk to you about, you're giving me so much food for thought, and there's so much juicy insight here that I could continue. I just want to get to one final question though, as we do, try to keep these podcasts quite short, how important is it for you to work closely with your accommodation partners and the type of initiatives that you actually have in place there to facilitate them, and, and that, that corporate engagement,
John Hubbs-Hurrell:
I think it's, I think it's massive. It's huge. Okay. You know, we, we've had a relationships with a lot of our suppliers for many, many years, and, you know, and, and that sees you through the good times, you know, and the bad times, and it's all about partnerships, but one thing that I am certain or with that is it's about obviously finding your place and what you can, how you can support your, your supplier partners. You know, obviously The Advantage Global Network, we've got representation in the UK, you know, we've got a bunch of tribal partnership in the UK, you know, we're, we're represented in 83 countries as well. But the key thing is it's about obviously getting the messaging out to, to the, to the end traveler, the end user of the program, and obviously the TMC.
John Hubbs-Hurrell:
So it's all about engagement. It's about obviously making sure you're providing the right communication tools and the platform to enable a supplier partner to have their program, their, their product, having the maximum amount of exposure, but also, you know, having that sort of, you know, partnership arrangement in terms of, you know, having the ability to be able to tweak rates, you know, answer specific questions about particular property, look at sustainability, you know, programs that the, that the suppliers are on modeling as well. So really be sort of the eyes and ears for the supplier of what's going and in the sort of travel management world or travel agent world as well.
John Hubbs-Hurrell:
So we, we post a lot of value on, on, on our supplier partnerships, you know, and, and, you know, we want to, you know, come out of this last two years in a stronger position. And I think by, you know, enabling the travel management comes the travel agents to have the right tools and the right products, they will be able to benefit everyone benefits in, in the whole travel ecosystem.
Ryan Haynes:
Absolutely. And, and, and obviously you've, you and your team are out and about engaging in the events in the associations. You know, you're, you're, you're, you're spreading the words and that's incredibly valuable and much needed to really understand how the industry is working today. John, thank you ever so much. I'm definitely going to have to invite you back for more discussion in the
John Hubbs-Hurrell:
It'll be my pleasure. Thanks for having me.
Ryan Haynes:
Thank you. That's John Hubbs-Horrell the Head of The Advantage Global Network. Find out more of our episodes on Travel Market Life, through any of the podcast channels or hatch by website Haynes Marcomms, Travel Market Life for all our episodes and series I'm Ryan Haynes, your host. Thanks, listening, ciao for now.