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28 Aug, 2015

PATA Travel Mart Preview: As Confidence Returns, Bottom-line Improves

Bangkok – The Pacific Asia Travel Association is on track to convert a US$700,000 deficit in 2014 into a US$134,000 surplus this financial year, thanks to stronger membership growth, a surge in profitable events and sell-out PATA Travel Mart, PATA CEO Mario Hardy said last week.

In a PTM preview interview, Mr. Hardy said the membership will hear a much more positive outlook for the association during the Board and Annual General meetings to be held alongside the Mart in Bengaluru between Sept 4-8.

He said that 123 new members had joined the association so far this year, as against 56 who pulled out. The mart itself is on track for conservatively budgeted surplus of US$170,000 as against a loss of US$30,000 last year. As of last week, 91% of the floor space had been sold, with two additional Indian States requesting space. “Should they confirm we will hit 98% to 100% of the space sold. So far, we have 217 sellers confirmed and 250 buyers from 60 countries.”

Mr. Hardy admitted that the organisation of the PATA Travel Mart in Bengaluru has been a challenge, in contrast to the PATA Summit in Leshan, China, last April. Making clear that he intended no disrespect, he said the PATA staff were strained to the limit by decision-making delays that compressed what should have been done over the course of a year into a three-month period. “There’s a lot of bureaucracy, many different levels of management involved. It takes time to go through all those levels. The staff has had to work thrice as hard.”

 Mario Hardy

He indicated that one area has been logistics, especially for the air-tickets for the buyers. As of last week, some of the buyers still had not received their confirmed bookings. “It’s been hard work. The Indians have their own ways of doing things, which is quite different from the Chinese. I appreciate that this is the first time they are holding a travel event of this scale in Karnataka.”

Having said that, Mr. Hardy was confident that it will all work out in the end. He lauded the excellent line-up of tours and the opportunity to showcase the various hotels and products such as the Golden Chariot railway.

Mr. Hardy said the Mart and indeed the entire travel industry in the PATA region was now facing a rapidly-changing, highly competitive environment.

He said he was not particularly concerned by the additional cluttering up of Asia’s calendar of travel shows with the entrance of World Travel Market into Asia. “One thing that we’ve noticed is the big shows such as the WTM and ITB Asia are attracting the big brands while the PTM is becoming better for the small & medium sized enterprises. That’s our niche-market for the time being, which we expect to continue focussing on going forward.”

He said the biggest challenge facing the PATA mart is how to diversify its attendance and business-mix in an era when the entire buying-selling process is being overhauled. The PTM has its unique advantages. “We are historically the oldest travel trade show in the Asia-Pacific. We are the only one that navigates around and gives exposure to different Asia-Pacific destinations. The big capitals of Asia don’t need us any more. It’s the secondary and tertiary destinations, which in a way is in line with the original concept of putting new destinations on the map.”

Asked how he could the explain the decision to hold next year’s PTM in Jakarta, Mr. Hardy said, “For Indonesia, Jakarta is in fact a secondary destination. It gets less visitors than Bali. But there are many interesting things to see there like the Old Town which is being restored. I am told that will be completed by next year.”
He said bids are already coming to host the PTM for 2017 and 2018, “including from cities that we didn’t expect.” Pressed for details, he said, “Watch this space.”

The PTM is the primary fixture on PATA’s events calendar and getting it back up to speed is a critical component of the objective to better balance and diversify PATA’s income sources. PATA’s overall revenue split is now comprised of 58% Membership, 32% Events, 5% the PATAcademy, 3% Research and 2% others.

Mr. Hardy said there is good news on the membership front, too. New members include heavyweights such as Turkish Airlines, Yunnan province, Slovenia Tourist Board, Exo Travel, The Kempinski Bangkok, and more. He said he was especially pleased with the diversity, from airlines to hospitality to NTOs and lots of I.T. companies and consultancies joining.

He added, “Growing the membership is important but more important is engagement with the members. We are a not-for-profit organisation but we also need to be profitable. That’s why diversifying the membership line-up is more important.”

Asked what reasons are cited by those who leave, Mr. Hardy said it varied. Sometimes, the membership is based on a decision by one person in a company and when that person leaves, the replacement may not want to follow suit. Sometimes the business goes bankrupt. Others just don’t see the value.

“For those specifically who don’t see the value – and I get this question quite often, ‘What value am I getting from my membership?’ — I revert by asking them what are they doing to extract the value they seek? I tell them it’s like going to a gym. You may become a member, but if you don’t go to it and use the equipment, you don’t get any benefits. So I tell them to get involved, participate in the trade shows, activities and events. They don’t need to use all the services we develop but even if they enjoy one or two benefits, that’s usually worth it. I had one member from Macau who was so pleased with just one of our reports on technology that he said that alone was worth his membership.”

He said that by the end of 2015, PATA will have held 15 profitable events, twice as many as in 2014. Six events are confirmed already for 2016 and more are to be announced. Applications to host events for 2017/2018 are coming in.

All this has been achieved with the same amount of internal PATA resources. “We are probably doing twice as much in more regions and countries that we did before,” Mr. Hardy said.

Asked if PATA will soon need to add more staff, including possibly a Number Two, Mr. Hardy said he would look at it towards the end of the year, when the full financials are known. Right now, he said, he has no desire to add costs.

Mr. Hardy said one of the items to be reported to the board is a stepped up effort to better to better brand, position and market PATA. A deal has been worked out with a U.S.-based agency which will become a member of PATA but offer its services for free, including the development of a tactical and strategic marketing plan. In exchange, the company will be upgraded to PATA partner status. Details of the deal will be announced after the Board meeting in Bangalore.

“This will help the membership team get more than what they are doing. So far, most of the marketing has been focussed on events. But now we want to boost membership, research, training, and the PATA Gold awards. Most large corporations allocate about 3% of their budget for marketing but we are allocating only 1%.” He said the marketing effort could also be broadened to include merchandising, including corporate gifts and branded products.

Meanwhile, traffic is up significantly at the revamped PATA website, with more online activity and membership engagement.

On the advocacy agenda, Mr. Hardy said PATA will stick to the current five items (Dispersion of tourists, AEC 2105, Human Capital Development, Sustainability, Crisis Communications and Resilence). However, he has written to the chairpersons of the advisory committees to get feedback on how to advance the agenda. “They are the voice of the members. I have asked them for their ideas. Also, what other themes would they like to see addressed, including by the PATAcademy. We have done human capital, social media, technology. What else would they like to talk about?”

He has also asked the committees to address another major challenge: How to find good, interesting and legitimate buyers for the travel mart.

Asked if it was time for PATA and other international travel events to provide more space on their event programmes for civil society and non-governmental organisations with alternative perspectives on the future of tourism development, Mr. Hardy said, “I think in some of the events we can plan for that. But it would depend on the hosts who usually drive the agenda. We could also include it as an Academy topic. But the challenge is how to get people to pay for it and how to the members interested. For example, we had an Academy on Human Resources Development. Such an important topic. We thought it would do very well. But the numbers turned out to be much less.”

Asked if PATA now needs a new mission and vision statement to better reflect the changing realities, Mr. Hardy said perhaps not an entirely new mission statement. He felt, however, that revisiting the business plan is more important in order to make it less convoluted and more simplified, and make it almost part of the mission statements.

On the PATA research, a study on the Millennials market has been completed with Phase Two to be released this year. In future, Mr. Hardy said, PATA may have more research backed by sponsors. Asked if that may compromise the quality of the output by skewing the conclusions to suit the sponsor, Mr. Hardy said not necessarily. Not all sponsors approach it that way.”