Bonotel CEO Talks of the Perils of Brexit, Dynamic Pricing and Commoditization: “The worst is yet to come,” Faisal Sublaban, president and CEO of Bonotel Exclusive Travel, half-jokingly told delegates to Connect Travel’s RTO Summit Florida last week in Orlando as he concluded his keynote remarks on the state of the travel and tourism industry. Chuckles of relief rippled across the room, as those in attendance had just heard Sublaban, in the style of a peripatetic tent preacher as he walked back and forth for 55 minutes, stopping to make points of emphasis and addressing key challenges—especially those of technology-driven commodification—while holding the attention of listeners for every moment of his presentation.
Sublaban said quite a bit—we estimated that, using the average radio announcer pace of 160 words a minute and taking into account his more rapid pace (about 180 words a minute)—just under 10,000 words. What INBOUND has done is to present the key points of his remarks epigrammatically, in his own words, occasionally edited for clarity. And mostly in the order in which he made them.
The Impact of Brexit and Other Events in Europe:
—”The state of the industry is … there are headwinds coming like never before. Some of them we can control. The largest headwind coming is Brexit. Whatever the outcome ends up being, there will be a significant impact on those of us expecting UK travelers.”
—Because of the tension over people wondering if Brexit will come soon or not, “the uncertainty is an indication of what’s going on in the market. Nobody knows the British market because (the British) don’t know if they should travel or not.”
—The UK market is going to be significantly impacted with Brexit or without it. You need to acknowledge that, lift your head out of the sand and understand that, regardless of ‘everything is going to happened as it always did,’ it’ not going to.”
—“There’s a lot of shock and awe that’s gone down with Thomas Cook (the 178-year-old UK tour operator that shut down on Sept. 23). There’s a lot of denial when it comes to the likes of AMOMA.” (AMOMA was a Geneva-based meta-search portal described by HospitalityNet as “infamously known for undercutting hotel rates and/or distributing net wholesale prices,” which went bankrupt in mid-September.)
—“AMOMA essentially took the money up front, from everybody, put it in their pocket and used it to fund their forward operations—Why is that a problem? Because, once the music stops, as it eventually did, the impact was significant.”
—After Sublaban asked for a show of hands of those in attendance who are following the Brexit issue, he noted that “80 percent have said that they haven’t followed it. Yet, it’s going to have a massive impact on global tourism. 80 percent in the room is essentially ignoring what’s happening with Brexit. You’d better be catching up on Brexit, At the end of the day, travelers either don’t have money to travel or, if they are traveling to the U.S. or North America, they are doing so in a different manner.”
—Instead of booking an 18-day vacation, they might shorten it to 13 days or 13 days or 9 days or seven.
—Among British travelers, “Nobody knows whether they should travel, whether they should be planning for their future vacation or not, whether (those in the industry) are going to have a job or not have a job, whether they’re going to be forced to leave, in a short period of time, the UK market or not—all these things are indicative of the market today.”
Technology s Commoditizing Distribution:
—“Now, we get dynamic rates. We used to have static rates, rates that were tied to certain periods—rates that were fixed. Now, the reality is that we’re dealing with revenue managers. The revenue manager probably has more power than the general manager.”
—“The reality is that technology is enabling distribution to happen in a faster and more efficient way than ever before; revenue managers are not focused on more than 90 days out.”
—“When you look at what is happening, technology is the leading indicator in our industry as to what’s to come and the path forward. You’re going to have a lot of headaches.”
—“Even if the way you receive rates is different, it doesn’t change because revenue managers are not focused outside of major events or conferences; they are not focused outside of 90 days.”
—“Commoditization is happening because technology is making it happen.”
—“We can ‘pretend’ that we’re going to have dynamic rates … but the reality is that technology will commoditize the way that you distribute rates and availability.”
—“The way that people research and book is going to change. Technology is going to commoditize the very picture of what we’re doing today. We can look at connectivity, technology and try to deny the fact that it’s very pervasive and taking over the world. “
—“It’s a scam to some, but I raise my hand and say ‘Hell yeah!’“
The Way It Used to be, and the Shift to Last-Minute, and Other New Verities:
—In Europe, Bonotel “has had a 147-day booking window. Now, the largest companies are actually booking within 10 days. People are making buying decisions based on the ability to move when the want to move.”
—Travel and destination information “is being served in your face using algorithms.” (He suggests that it has become a “hash-tag” world.) If you’re not-top-of-mind, you’re dead in the water.”
—(Holding up his cell phone) “The cell phone is the remote control of your life…”
—Today, “you may not buy 180 days out, but you’re thinking about it.”
—Does the traveler visit 30 sites on the way to making a booking decision? “No, but they talk with 30 friends who they follow (on a social media site).”
—We’re enabling the last-minute traveler. People are traveling last-minute because hotels and airlines are dropping their last-minute rates—rewarding the last-minute travelers.”
—“So, if you’re not top-of-mind when the consumer wants to make a buying decision, you’re dead in the water.”
But What do You do about Creeping Commoditization?
—“If you think for a second that an owner of a property or a tour operator or travel venue is not going to enable technology to provide efficiency or scalability, you’re probably going to be the person in the room who’s going to be let go—you avoid that by providing value.”
—But, “You cannot allow technology to commoditize your product … There’s always going to be the human touch. There’s always going to be a relationship. However, the form which that relationship is changing, and you have to change and adjust it.”
—“If you’re providing value, irrespective of whatever industry you’re in, you will never be commoditized, because you are relevant to a hotel owner, you are relevant to a hotel supplier, you are relevant to your distribution partners, you are relevant to the end consumer.”
As a significant part of the international travel and tourism industry population prepares to go to London next week for World Travel Market and the ritualistic sharing of information and intelligence that it always warrants, delegates will have much to talk about: Brexit, to be sure; trade war impacts; and now, a market that has gone flat for the United States—down a half-percent for the month of September and up just one percent for the year vs. 2018.
While leisure travel is the product that most international tour operators and U.S.-based receptive tour operators market and sell, the activity and unit costs of the key components of the travel experience are an integral part of the travel package—literally and figuratively. And there is also a small niche market involving leisure travel that is part of the business travel experience—the “Bleisure” traveler—that is affected by the travel market’s response to the pressures of supply and demand.
Most Expensive U.S. Cities for Business Travelers: Prices can vary widely between cities themselves and the areas that surround them. Add up the costs of lodging, ground transportation and meals for a three-day/two-night trip in a major city. It’s likely to cost up to 55 percent more than the average destination. Taking a city-by-city approach is the most accurate way to analyze business travel expenses,
The Sept. 23 shutdown of UK tour operator Thomas Cook has sent out ripples and waves worldwide, affecting millions who had scheduled travel packages using the failed operator. Its impact has been direct and measurable for some destinations, including the United States—it is the number one long-haul destination for British travelers—and, in particular, Orlando.
Latest NTTO Figures not Encouraging: The collapse of the UK-based tour operator Thomas Cook on September 23, 2019 generated scores of side stories about the legacy of the company, and it also helped to put the finishing touch on an already cloudy picture for the inbound tourism industry’s outlook for 2019. Here are some of the data-driven reasons why:
China outbound is a very fragmented market, a recent news report from China Travel News (CTN) tells us, but young Chinese travelers is always a very important segment for overseas tourism operators. “It is because in general, this is the segment that not only they travel, they travel free and independently,” the report emphasizes, “and we can reach them online.” Using fresh numbers from Trustdata, CTN notes that, during the first half of 2019, post-90s (those born from 1990 to 1999) young users who made hotel reservations have surpassed post-80s for the first time. And post-90s together with post-00s, they comprise 46 percent of the total online hotel bookers. Says CTN, “The potential for the post-00s is huge and will increase as well.”
From Jing Travel: “Against the backdrop of falling Chinese tourist numbers and increasingly hostile bilateral sentiment, Brand USA and San Diego Tourism Authority are taking matters into their own hands. 
Developing a Multi-Country Itinerary? Check here first. Just released by OAG, recognized as the authoritative source or airline and airport data, the OAG Megahubs Index 2019 reveals the 50 most internationally connected airports in the world and the 25 most domestically connected airports in the U.S. (Above: London Heathrow, the most connected airport in the world.) While the international list points to London Heathrow as the most connected and Frankfort, Germany as the top two, Chicago O’Hare comes in at No. 3, with other major U.S. airports coming in at Numbers 8, 13, 18, 19, 20, 21, 23, 31, 37 and 44.
It’s been about 10 years since the U.S. Travel Association wrapped up the most significant lobbying effort of the organization’s history and got the U.S. Congress to passed legislation that created the Corporation for Travel Promotion (DBA Brand USA). After it did so and the bill was signed into law by President Barack Obama, the association has had to stave off attempts to deauthorize the agency. A little more less five years ago, in December 2014, US Travel was able to persuade Congress to reauthorize the organization for six years.
—In a magnificent case of timing its lobbying, U.S. Travel is able to get the Senate to incorporate the language of a House bill (similar to a version it had approved) into a measure of its own. The Senate never acted on the bill per se, but the language doing so was deftly and quietly dropped into a measure that funded the U.S. Capitol police as part of the Omnibus Government Appropriations in a bill that was approved by the Senate late Saturday, December 13, 2014—the last day of the 113th Congress. It extended the life of through the end of Fiscal Year 2021 (Sept. 30, 2021). Which is what we are approaching now.
Kevin Gaddes
Stéphane Durand
he French tour operator Marietton Group has retained an executive—
Gloria Loree
Charity Stewart
Bruno Heleno
FCM Travel Solutions, a global business travel company, has appointed
Roberto Vertemati
Hotelbeds, the world’s largest bedbank, has announced the appointment of 
Justine Evans
Kristina Miranda 
Laura Di Nardo 
The Kansas City Kansas CVB has selected 
Alyssa Barrera-Mason
G Adventures has appointed 
Mark Telmany
Barb Newton
Hillary Bressler
Brian Said 
Joe Robinson
