With over 34 years of a track record of achievement at C-suite and Board level at iconic sector-leading companies, Patrick Richards is a highly experienced Travel Sector Board Advisor and Industry executive with hands-on experience in growth strategies transformation. He successfully led operational teams of up to 300 people with passion and a sense of mission, often in troubleshooting roles in both mature and emerging markets.
The quarantine, lockdown, and social distancing have transformed many businesses from retail to education. What in your opinion, are the significant changes travel faces today?
Regrettably, the challenge for travel is more rudimentary i.e. it needs to get into first gear again. In April this year, Spain lost 100% of its inbound tourism! Such a figure is totally unimaginable, coming from the #2 destination in the world for tourism. 90 countries worldwide still have closed borders. Swathes of air capacity have been lost globally, as well as many talented people from our industry. The iconic Hilton Times Square in New York has shut its doors permanently. The picture is dire… Reversing this is going to be a slow process, and neither will it be linear. Governments urgently need to implement more consistent, practical policies with their neighbours for opening up to visitors. Structural measures are also required to stop the permanent loss of supply side inventory (air, hotels, etc.) from the system. Other vital pieces of the jigsaw-like insurance cover are gradually slotting into place, but its a slow process. I’m afraid we need to strap ourselves in for a bumpy ride, with tourism being affected much more adversely than other industries.
Experts say that to survive in post-Corona recovery, hotels and travel agencies must start acting more like tech companies. Is industry ready for this accelerated digital transformation with suitable talent?
Despite the picture above, long term, I’m an optimist that tourism will flourish again. What’s-more technology will be a highly positive driving force. The global head of tourism at IBM was on a panel I was moderating recently. He gave tourism a “generous 6 out of 10” for technology adoption; adding that travel folks far too often turned to manual processes when tech solutions are available. Regarding talent, there are some super talented people coming along, and it is our responsibility to nurture and help them develop a profound understanding of our industry. Having said all this, I don’t think that hotels or travel agencies should ever forget their primary driver in delighting customers. Technology must facilitate and accelerate this, not replace it!
How does a conventional offline Tour operator address this new challenge?
Patrick Richards says It’s a great question because the number of companies still utilizing little or no technology is staggering. Owners and managers need to address this as a top priority. If they don’t, I sense they’ll struggle to survive in the new world. For the traditional tour operator, I’d be addressing the “plumbing” of the business i.e., eradicating manual processes both within their business plus with the supply chain. Even when in-house systems are in place, more often than not, they’ll be siloed, so won’t talk to equivalent technology being used by their hotel and DMC partners. Hence records are duplicated, and orders are processed by e-mails. Such practices are killing the ability to operate at a cost base or deliver the speed of service that future consumers will tolerate. The other key challenge for them will be to capture customer data to deliver a smooth and personalized service front end.
Many people think that future travel roles might not require many traditional practices of travel, like paperless immigration, check-in forms, menus, or guidebooks. What are your comments on it?
Patrick Richards says I’d agree. The transition to many of these services online will accelerate massively. One of the positives arising out of covid has been the focus on education and the willingness of travel industry staff to up their skills levels. This is essential as consumers are becoming ever more sophisticated, and as professionals, it is essential that we add value by guiding, not following. There is a real need for more user-friendly online education orientated towards the travel professional.
How can technology help the hospitality and travel industry to successfully adopt new change?
Patrick Richards says Adoption is not a one-way street. As much as travel, people need to adapt, so do the software companies. There is going to be much less money about, and technology needs to become more affordable. Over 90% of travel enterprises are SMEs, and many owners/managers are terrified of getting locked into expensive, long term contracts that don’t serve their needs correctly and that they can’t get out of. The model needs to become much more flexible, removing barriers to entry and enabling suppliers to be changed. I’m a believer in open source technology and the interoperability it offers. Development in this direction will make technology more affordable and remove the fear factor. This has to be a good thing.
And, will it influence the price correction?
Yes. Lower technology costs will enable businesses to do more with less and price competitively. Consumer demand will be under severe pressure from unemployment, reduced salaries, and profits, so this will become an essential tool in the industry’s ability to respond.
With many businesses and searches going online, do you think Google will further dominate the game of online travel business through its control on paid marketing scenario?
Most probably, yes. The OTAs have no doubt learned some lessons, but when demand begins to recover, they’ll have little alternative than to reboot their Google spend in order to maintain market share. Having said this, the big question is whether regulators will enact some anti-trust legislation forcing Google to divest some of their operations. In my view, this is essential for the future competitive health of the industry. Google has become a modern-day equivalent of Standard Oil and other monopolies that dominated the USA 90 years ago. These were subsequently broken up by legislation. At some stage, I believe the same will happen to Google … just not yet.
