Marketing is Where the War Will be Won and Lost.
By Yeoh Siew Hoon
Monday, 16th November 2009
And oh yes, don't dismiss social media too easily,These were some of the hometruths shared by Don Birch and Scott Blume in their panel at WIT with Yeoh Siew Hoon.

Don Birch, former CEO of Abacus International (right) and who spent most of his career with Cathay Pacific, is in a happy place. "I've done lots of things, been and lived in lots of places, made a bit of money and I am still happy," he said.

And an all-abiding truth in his life remains the motto for the British East Land Forces when they were in Singapore where he lived as a child: Manners maketh man. "I am an old fashioned kind of man."

One of Scott Blume's (left) favourite words meanwhile is "collegiate". "You need a team to get things done. We have to rely on people and earn their loyalty, people who take decisions and not get caught up in analysis paralysis."

Thart's something Blume is in no danger of doing however - since he left ZUJI/Travelocity which he headed as CEO, he says he has been working on his tan and golf."

Birch says the good thing about "retirement" is choice. "You don't have to go to the office, you don't have to take phone calls if you don't want to. If you have that choice, I say, take it."

They were then asked to pick a movie which would best describe their vision of the travel industry.

Blume picked "Amazing Grace", the movie about William Wilberforce and the abolition of slavery in the US. "It was three steps forward, two steps back. He was despairing and despondent but in the end, he won. Online travel is a bit like that - in the last seven years, there was a lot of despairing. Online travel today is almost at a victory point."

Asked what he saw being abolished by the online travel industry, Blume said that OTAs were stealing share from traditional agencies. "Offline agencies need to get online to maintain their share, otherwise they will be abolished."

Birch's pick was "River Wild", the movie with Meryl Streep in which she and her family go on a river rafting trip only to meet up with a creepy Kevin Bacon who holds her family hostage. "Travel's a journey, lots of bumps and rocks, a bit of love and a happy ending."

Online travel could end up on the rocks though if it dismissed social media too easily, said Blume. "There are some risks there," he said, if this isn't addressed.

He said that if he were still running an OTA, he would aso work on growing traffic to participate in the media game.

"There is today a war going on in terms of marketing and that war is to get traffic to your sites. The OTA model is about technology, content and marketing. Underpinning that is people. Technology and content gives you the ticket to play, marketing is where it's won and lost.

Costs are rising in digital marketing, he said, pointing to a war between OTA competitors, hotel sites, individual country sites etc. The key is to get good at cost-efficient marketing.

Birch said innovation and change continue to be the blind spot for the industry, particularly for the GDSs. "It's a real struggle to make things happen. There are the excuses, it's big, confused, fragmented therefore the model is going to be same."

But he believes there is a tipping point taking place. He agreed with Blume on his observation that social media had been dismissed too easily. "How can that not have an impact on business," he said as he cited the numbers associated with social sites like Facebook.

Birch believes in five years' time, GDSs will be completely different from what they are today while Blume says the number one OTA in the region by that time will not be a global OTA but a number of individual portals in different countries.

And he added that the number one OTA will be the one "that is the most customer centric and that wins the marketing war."

Birch said three things will drive change. One, the power of data - "managing that data is key, look at Twitter - what do you do with all that rubbish? Someone will figure it out and a marketing model will emerge", two, mobile which is already here and three, the way people transact will change.

With "a little money" in their pockets, both Birch and Blume are open to investing in the industry.

Birch said he wants to invest in people. "A good idea, bad people, doesn't work." He is keen on people who have insight in what they are doing and his idea is to "invest in specialists and bring in generalists to run."

He'd also look at growth opportunities. He cited the example of General Electric's MRI machines whose market had completely flattened out. "The number of hospitals is finite and so they now have portable machines and every village in China wants it."

Blume said he'd invest in markets where there is a large domestic market and opportunties for outbound such as Australia and India, and he was also interested in the hotel model.

As for what advice they'd give to students, Blume said, "I am a reformed accountant. I'd say do a double degree in business studies so you understand the money, and the digital marketing space. There are not enough digital marketers with experience in Asia - you can write your own number if you are good."

Birch said, "If you want to make money, banking. If you want fun, travel, and marketing."

Looking out into the audience at WIT, Birch observed that he was surprised that there weren't more Asian faces among the delegates. Blume said this was "probably because they (business owners) are not prepared to invest in them".

Blume said the online travel sector needed to do a better job of getting the general media to understand that the online business was growing and is here to stay.

"The general media still doesn't believe the story - we are still misunderstood in the media space."

Yeoh Siew Hoon, one of Asia's most respected travel editors and commentators, writes a regular column on news, trends and issues in the hospitality industry for 4Hoteliers.com.

Siew Hoon, who has covered the tourism industry in Asia/Pacific for the past 20 years, runs SHY Ventures Pte Ltd. Her other writings can be found at www.thetransitcafe.com

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