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1 Jun, 2009

PATA Financial Clean Up Continues

Facing another tough financial year in 2009, the Pacific Asia Travel Association is pushing ahead with internal financial clean-up and administrative overhaul in preparation for formal approval of the changes at the next board meeting in Hangzhou, China, this September.

Also under way is a re-writing of the by-laws that will change the structure, role and responsibilities of the board of directors and executive committee, and enhance the role of PATA’s worldwide chapters. Major changes are also under way in the staffing line-up.

Having reported a large deficit in 2008, PATA finances are looking difficult again this year, especially as the uptake for the PATA Travel mart in Hangzhou, one of the association’s main revenue-generating activities, is “still tough”, according to President & CEO Greg Duffell. He said the downturn was plaguing all industry trade shows and conferences, with many reporting anything up to 20% lower attendance.

At the moment, cleaning up the internal financial mess is a top priority. Strict curbs have been placed on entertainment expenses and business-class air-travel. All expenses of above US$50 have to be approved by him personally.

Although this is a temporary measure, he feels it is “absolutely necessary” in order to be sure that membership money is being well spent.

He said it has been discovered that in the past, entertainment expenses included large amounts for alcohol. Although some spending on alcohol may be necessary for specific high-level meetings, it now has to be approved by him in advance.

He said the move is in line with the corporate expenses policies instituted by multinational companies.

Much of the financial clean-up is now being handled by Ms Nora Khamsai, the new Chief Financial Officer, who previously worked with Mr. Duffell’s former employer, Indochina Services.

Having spent several years with a major Thailand-based publicly listed company, and six years in the United States, she “knows how to ask difficult questions without kow-towing to anyone,” Mr Duffell said.

He said PATA will also have to dismantle the maintenance of accounts in California, where PATA is registered as a non-profit-organisation, and have it run out of the operational HQ in Bangkok. As some kind of U.S. presence will be necessary to maintain the NPO status, Mr Duffell said he is pursuing the appointment of a single auditing company which can manage that as well as a unified system of accounts.

He said when he goes into the next board meeting he will be prepared to answer all the questions about the movements of money and how it is being spent – as should be expected in any membership-based organisation.

He said the process of financial cleaning up would continue, regardless of who was found to have been connected to it. He said he has felt no pressure to back off.

“On the contrary many board members are being very supportive. The former board was so far removed from the process that it often had no idea what was going on,” Mr Duffell said. “It was a rubber stamp.”

Today, he said, “PATA is being flipped upside down, so let us start work now in order to shape the operations to get the foundation right. Without that, any changes at the top would be only Band-Aid.

“A lot of unknowns are still popping up. Making changes is a long, frustrating process. It takes time to make changes in the systems as well as people.” However, he said he is now a lot more comfortable about the situation than when he joined.

For the first time in the history of the association, a report card on his first 100 days in office is to be issued to all members that will outline the work done so far on governance, financial issues and transparency.

Mr Duffell said that the upcoming changes in by-laws will see the present board of more than 70 members shrunk down to no more than 15 to replace the existing executive committee, which has so far been the real “power behind the throne.” Another larger debating and discussion body will be set up to act as an advisory council.

The process of appointing/electing who sits on these new bodies also has to be clarified. He noted that several members who pay more funds want more say, in line with what any shareholders would demand in a public organisation.

He said it was important to find a proper representation for the numerous PATA chapter members, as had been agreed at the last board meeting in Macau. This, too, entailed detailed discussion on how many representatives should they have, and how they should be elected.

Mr Duffell said PATA is not renewing the contract of its representative in the Gulf, and would find other ways of serving the roughly 30 members that it has in the region.

Changes will also be made in the U.S. where Mr Duffell will be spending most of June addressing the finance/accounting issues and talking to the chapters about future relations between them and head office.

No changes are expected to be made in the communications department, but there will be some in the information technology department. A new associate director has been hired in the Strategic Intelligence Centre to help beef up the SIC’s research, data gathering and consultancy services.

For the first time a database of members is also being prepared and the web portal for members is to be revamped.

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