Crew Travel Round Table Debate

The annual SMI Crew Travel Round Table Debate saw seven crew travel representatives give their views on the latest developments and issues facing the Marine & Offshore travel market. Kindly hosted by V.Group and with questions from SMI Editor Samantha Giltrow, participants were: John Harding, Managing Director, V.Travel; Jochem Hemink, Head of Sales Shipping Europe & Asia, ATPI Group; Jason Barreto, Independent Consultant; Mark Taylor, Operational Director ISS GMT; Wayne Durkin, Head of Sales & Account Management, Good Travel Management; Murray Burnett, Managing Director, Munro’s Travel; Vangelis Tsironis,  Sales Manager, Aktina Travel Group.

Samantha Giltrow
With the New Distribution Capability, can and will the airlines charge more if there is less transparency with fares and will the ability to source comparable fees/airlines be limited compared to the traditional GDS distribution chain/method?

Murray Burnett
There’s no doubt that IATA works on behalf of the airlines and NDC is a standard, and I think that the model has been challenged, of course, historically around the airlines distributing their content through the GDS and the GDS then bringing the content to the agency. There have been certain constraints that the GDS has in accepting fare content and it’s very flat, so I think they saw in the industry that it was time to be reviewed and we kind of expected that to happen. It almost feels like Pandora’s Box has been opened and that as the airlines really enhance and invest in their technologies to their web applications, it is really up to the travel trade and GDS and everyone within it to catch up, and be able to offer the same sort of services and service provision in the way that the airlines can do it themselves. That said, the GDSs seem to be coming up with various ideas and solutions around how to cope with this and to deal with the ever-changing fast-paced change of NDC and what that brings. The airlines have tasked themselves with having 20% of transactions through the NDC by 2020. I think there is still a lot of uncertainty across the board but very much driven by the airlines’ desire to enhance their capabilities and to also reduce their distribution costs.

Jason Barreto
Lufthansa are the ones leading this development and pushing the NDC programme forward.

Samantha Giltrow
How long do you think it will take before everybody is onboard with it?

Murray Burnett
I think there are question marks over the 20% by 2020. There were some raised eyebrows and I don’t think anyone is putting their neck on the line and saying ‘this won’t work’ or ‘it will’. But I think, as Jason said, there are going to be some airlines that are more ahead than the others. It has absolutely challenged the model and I think that the technology that is now going to be brought in is really quite flat and restrictive through GDS. I also think it’s for generating more sales as well. Who can blame them? We do the same – as we don’t just offer the airline ticket, we offer all the ancillary services that go around that, which adds value and I don’t think the position of the TMC will change, I think we have just got to evolve and be ready for a change.

Mark Taylor
I think the NDC change on the ancillaries is also to assist us, to solve a problem because at the moment there is a lot of disconnection between the front end and back end. I think a lot of the airlines are approaching it from a blended version as well depending on which GDS they are on.

Vangelis Tsironis
At the moment, the agents have an issue with GDS and the NDC. They think it is taking too much time to check both platforms.

Mark Taylor
I think they are still getting their heads around it. It will change and morph over time, once they fully understand how they can connect the NDC content and it’s their decision whether or not agencies decide to go direct or continue through the blended approach. A lot of agencies don’t have the resource and funding to build the NDC.

Vangelis Tsironis
It is going to be a huge expense.

John Harding
It’s difficult not to get emotional about this subject because the TMC market is somewhat beholden to the airline industry through IATA, and its very restrictive payment terms. You can’t help but feel that this is a disruptive process brought in to break the commercial model and we’ve got to go with it. Because we are coming from that position, we are playing catch up as Murray alluded to, and it’s very challenging. Who is going to pay for all of this new technology? We are having to fund it ourselves because we can’t charge our customers for it but our customers will expect full content and at the moment, through that GDS model, full content is clearly becoming a challenge. For the future, I think it is going to become murkier before it becomes clear but with most technology the curve increases significantly at the last moment so maybe we can say 20% by 2020, but you might find it’s 100% by 2021. It depends on many factors. We are definitely in a period of disruption that could get worse.

Samantha Giltrow
What do you think the main limitations of the NDC are?

John Harding
From a TMC perspective, it’s simplification of the booking process which allows us to be efficient to the customer and do the job they need us to do at a very low cost. If that model is broken and we become more retail, then that is going to change the way the TMC market is perceived by the customer, and we don’t want that.

Samantha Giltrow
Will there ever be an online booking tool which truly works for the marine market? How can technology help in the development of this and how important is technology in the marine travel sector in general?

Wayne Durkin
I think it’s always been seen a bit like the Holy Grail. My opinion is it completely undermines what we do as a business. We work with companies to take away the stress of organising travel and if you essentially push that down to the crew planners and HR, they become the travel agents in essence, and the whole purpose of a marine travel company is the fact that we deal with complex journeys. So, whilst in the corporate travel sector it’s increasing all the time and adoption of online booking tools is going to be the future, the difference with the crew travel sector and handling journeys is, for me, more looking at automation where you are integrating with HR systems rather than actually providing a front end booking tool. There is still demand, when looking at crew changes, to have a specialist agency there to be able to take the hassle away. I think HR teams are busy doing retention and planning the manning of vessels. They haven’t got time to also be travel agents as well.

Jochem Hemink
I agree with Wayne. I doubt whether the business, the people that we service as crew travel management companies, are really helped by bringing the selection of travel options to their already busy day job of managing a crew rotation. I think the focus should be more on helping those people be successful and looking at their process rather than adding workloads to their already busy work day. We don’t have a crystal ball but over a longer period of time maybe technology will catch up and provide a solution that can simplify this.

Mark Taylor
I think they go hand in hand with each other. As technology in shipping moves forward, certain companies will embrace it. If it becomes a buzz word within a shipping company and you’ve got a very forward-thinking CTO, they might be looking at embracing this kind of technology. I agree 100% it’s the complexity of the routes, looking at transits, visas, visa regulations etc. Will there ever be one tool that does everything? I’ve been involved probably for about 20 years trying to build one and it still didn’t happen – there was always something else that came along, such as NDC. There is definitely still space in the market for specialists.

John Harding
The self-booking tool is something that we are talking about because we feel there is demand for such technology, but the key there is, who is doing the bookings? In the corporate world it’s the traveller, but you don’t have that same scenario in marine. A seafarer is not going to go online and book his own flights, so are we talking about transferring the work we do to the customer whether it be HR or crewing? There is an issue with the technology side – that will come if it hasn’t already. Despite the complexity of routes, there will always be a way to perfect that. The corporate online booking tool is still pretty clunky – they are not great – and there is a lot of criticism that corporate tools need to be improved to come up to the level that people are used to when they are shopping for travel. Customers are au fait with this activity. Indeed, it draws parallels with the NDC discussion, a more retail approach. This is not currently a model that is fit for the maritime industry. I think it is about getting the right tool and adapting it for the customer to support them in terms of what they need.

Jason Barreto
Having come from the shipmanagement side of the maritime business, the crew travel change process accounts for about 30% of the whole crew change rotation so it’s a really significant part of the whole process and so if that could be automated, that would be a great help. When I say crew travel, I mean not just the tickets, but the visas and all the other things that come with it. As for an online booking tool, it has to come. A lot of shipmanagement companies are moving through a digital transformation programme, so they are already finally moving ahead and for the travel industry to keep up to speed, which was always the reverse, they need to build an online booking tool. When it finally comes I hope it doesn’t happen when we finally have autonomous vessels and there will be no need for it!

Samantha Giltrow
What about Big Data? Everyone seems obsessed with getting data at the moment but they don’t necessarily know what to do with it. How useful is data within the travel sector?

Jason Barreto
Collecting data is the easy part, it’s figuring out what to do with it which is the difficult part and I think there is a definite shortage in the workforce of people who can manage data and make sense of it.

Mark Taylor
Using such data to look at optimising port call costs, because if they know averages in advance, they can potentially start planning better.

Samantha Giltrow
How can data be useful for travellers?

Murray Burnett
The importance of profiling and having data is the centre to the travel agency world, and others, so to have that trends and preferences is hugely important. I think there is a need for an online booking tool and I’m sure it will come. I think where we are at, at the moment, is trying to bring efficiencies and cost savings to the industry. Perhaps the combination of robotics and AI technologies can do some of that. Data is so, so important, and having data and using it in the right way and being able to provide that to a customer base, I’m sure is added value and will help them save and plan.

Jochem Hemink
Without data you have no chance of managing the budgets that you are responsible for. If you have to report back to your owners about the performance of their vessels then you need to have insight and data and with the data comes how do you manage it and then you are going to have to start asking the predictive questions such as what happens if I change something here or there and the way that I handle this and I think that’s where in the past as TMCs we have delivered a lot of data about what happened in the past. Now, with more data and more information we gather, we can be more predictive and advise the customer of what opportunities they have to make changes. You can also assess whether it’s worth making a change.

John Harding
Definitely, proactive reporting is very important. Pre-trip reporting/approval and understanding the airports that are more economical for port changes.

Samantha Giltrow
IATA proposes to increase frequency and reduce settlement periods. Will daily settlements be inevitable and will this affect TMCs’ ability to provide credit to clients?

Vangelis Tsironis
Greece suffered two major defaults in Europe, so I think IATA is doing its best to ensure that airlines will get their money. Although, I think that daily payments surely will affect the TMCs. Not the big players, as they have the ability to pay, but I think it will mostly affect smaller agencies who are struggling to get some money from the clients and inevitably it may lead to them joining bigger players. Consolidation will increase in the next few years.

Mark Taylor
Historically in marine travel we are the end of the payment cycle. Although the ship doesn’t go anywhere without crew, we are often the last ones to get paid. I think it’s more likely it will probably move to weekly before they head towards daily payments but it definitely affects you if you’re not getting the cash in. It’s a huge issue for the smaller agencies, and it also then affects new competition entering the market as well if there are start-ups or people trying to get into a specific area of travel.

Samantha Giltrow
Do you think some of the smaller companies will go out of business?

Wayne Durkin
We are an SME TMC and for us we’ve had to radically look at how we manage credit with clients. We now use predominantly third party providers to provide a line of credit to companies, so it takes the risk away from us as a business but also offers clients extended credit terms of up to 55 days if need be, so it’s a kind of win-win for everybody and it helps us then to be competitive.

Mark Taylor
There was always a lot of shipping companies wanting you to extend the credit even further. It’s reliant on the shipping company embracing it, like with technology.

John Harding
I think in the short-term there will be some opportunities because it won’t be a global change. You will have different markets providing different periods of credit, so the bigger travel companies will be able to strategize around that, but it’s true, the smaller ones will struggle. I don’t know whether it will eventually go to one period of payment ie daily. I suspect they will stick with weekly and potential for daily. Customers are getting more used to it than we think. They are going online and purchasing things with instant settlement. So, there is a sea-change.

Jason Barreto
You’ll always have the problem that, and from a shipmanagement point of view, it will have an effect on them because they are the same as TMCs – service providers. So they will have to wait for the ship owners and ultimately the client to pay and it puts a lot of pressure on ship managers. I agree with John, it will happen in pockets – there will be areas where it will be daily such as Northern Europe, but there will be some areas around the world like Middle East and Africa where I think they will continue to be monthly.

Murray Burnett
I understand why the airlines are doing it as well – again, they have lost with agencies folding and bankruptcies, so you understand the drive behind it. With IATA bringing in the new regulations as well, it just seems the industry has woken up to the possibilities and challenges that they face and are now starting to address.

Wayne Durkin
One thing about the travel industry is that we are adaptable. If you look back at the last 15 years there’s always been something that has caused us to evolve, and there’s not many industries that have that change put on them.

Samantha Giltrow
What precautions are being taken, if any, to offset a ‘no deal’ Brexit and if it does happen, what implications could this have for the marine travel market?

Murray Burnett
I think when they know, we will know what to do! There seems to be different types of Brexit – there’s the ‘no deal’ the ‘deal’, the ‘backstop’ and then there’s the ‘off the cliff’ and I think the ‘off the cliff’ one seems the most precarious for us all because ‘airlines won’t be able to fly’ – whether that happens, it’s probably unlikely but I don’t know. I think we have just got to wait and see.

Wayne Durkin
I think the biggest risk to us is making sure our client base is secure because I think for us it’s more looking at the impact it has on our clients, more so than us as a travel company at this point. It means we have to be much tighter on who we offer credit to and make sure we are protecting ourselves from anything that might happen.

Mark Taylor
I think you hit the nail on the head. It’s a case of we will know when they know.

John Harding
What is the view from Europe?

Jochem Hemink
It’s very much uncertain of course. If it comes to an ‘off the cliff’ scenario we will not know if the clients currently operating business in the UK will be able to continue with their projects. So there will be possibly lots of complications of even getting people to do their jobs in UK waters. As a company that is both operating in the UK and in Europe, I don’t think we will have a problem ourselves – the ability to book tickets and things like that – because if need be we can always let people in the UK use our European IATAs and PCCs, so there is a way round this, but yes it is very challenging.

Murray Burnett
There’s already an impact isn’t there, if you look at the currency fluctuations – the whole thing is affecting everything. Certainly UK-wide, and I imagine further afield as well, the impact of uncertainty unnerves markets doesn’t it, and I think we are seeing that already.

John Harding
It’s not all wait and see though. We were contacted by our bank back in November saying they had to move our Euro bank account to Ireland because when Brexit happens, there will be the need for that currency to be processed within the EU.

Jason Barretto
You see it in the car industry and the financial sector – they have moved operations. It is about mitigating risk.

Vangelis Tsironis
The impact will be huge in every aspect – service areas, finance, shipping, travel, but I don’t think it will happen as it will be a massive loss for the UK and the EU. I think they will find a good solution, and we will be happy.

John Harding
There is some advice on passports – you’ve got to have six months now – and they are saying there’s going to be a year’s grace on other aspects such as visa-free travel. As an ex-pat I am regularly reading the press and the French Government has agreed that you won’t need to get a Carte de Séjour for at least a year if you live in France, but change is clearly coming.

Samantha Giltrow
Is the marine fare in danger, particularly with the recent introduction of ‘unbundled’ tickets by airlines?

Mark Taylor
I think there’s a possibility some marine specialised contracts might disappear with certain airlines. If they change the way they distribute it means that they can make use of the peaks and troughs in the other parts of the travel industry. It does make the marine pricing a bit more dynamic and some have started shifting the way they release fares as well. So potentially, yes. I don’t think they will ever go away completely though because they are high yield for the airline.

Jason Barreto
It’s high yield but still represents a small part of their overall business. There’s always that danger that airlines will get rid of marine fares, but they are still here.

John Harding
Maybe by being a small part it could be irrelevant to them to make that change. I think the value to the customer is proving to be even greater. We now come to expect when you book an air ticket, that you have to pay for your baggage, your seat and your meal and this is on the increase. Yet marine is still very much focused on keeping that packaged together, the 40kg allowance and flexibility on the ticket put more value on what we do for our customers. We are saving them fees for ancillary related products.

Samantha Giltrow
We recently saw the introduction of a marine travel app in the market – is this cause for concern and do you see them as a potential game-changer?

Wayne Durkin
I think for certain sectors such as yachts, it might be something of interest, but I don’t think we will ever have seafarers booking their own travel which, I guess, is what it is trying to achieve.

John Harding
There might be a space for it, for certain segments of the maritime industry, but there’s a space for many different things so I don’t think we see it as a challenge. It is interesting. The technology is more important than perhaps the marketing. It is still about the content behind these tools and that is key.

Jochem Hemink
I think it’s a good thing that technology like this is brought into the market. I think it triggers all of us to think about what the technology does and what it means for us. I feel that we should welcome a start-up like this and try to learn from it and see where it is successful and then incorporate that into our own business.

Jason Barreto
I agree. We really need to embrace it because look at what Uber have done for the taxi industry and Airbnb for hotels and we have all been beneficiaries of that.

Mark Taylor
I think the introduction is a disruptor more than anything.

Samantha Giltrow
Gentlemen, thank you all very much for your time and comments