Financial and regulatory expert Matt Purser – director of the Firebird Partnership – explains why he feels some travel businesses are being punished for the failures of others, and why seeking better data could be a game-changer for the industry.
Anyone on Instagram, Twitter, or any other social media platform, is probably well aware of how their devices are listening to them, and ultimately hitting them with targeted ads.
Many in travel have also started to learn more about their clients, and implement targeted advertising themselves. But should we now be gathering data to help understand travel businesses, as well as their customers?
“Various travel companies are marking their own homework”
In some ways, the travel sector is sophisticated and entrepreneurial. In other ways, it is very backwards; behind the times compared to other industries.
We still live in a world in which regulators are asking for information solely from the travel businesses they regulate, and relying on responses that are self-certified – allowing various companies to mark their own homework. That data includes, but is not limited to, details on:
- Bookings taken
- Passenger departures
- Average selling price
- Lead times
- Destinations
One question which is rarely asked – let alone really answered – is where the money is actually sitting in the chain? Is it with consumers, merchant acquirers, agents, organisers, or suppliers?
Off the back of recent failures like that of Dream World Travel, and this week’s announcement that this could cost the Air Travel Trust £6 million, why do we know so little about what is happening in the sector on a day-to-day basis?
We have regulators setting security levels based on an estimate of lead times, average prices and destinations. We also have merchant acquirers analysing how much is going through a travel business without knowing whether the money being taken is a deposit or final balance, how many customers it relates to, and where those customers are travelling.
“We need live, accurate data”
Meanwhile, one issue that came out of Thomas Cook’s failure, and which still hasn’t been addressed, is the lack of information around how much the agent was collecting, how much they held on to, and what paperwork/information the customer was given.
Pre-Covid-19, notable industry failures – such as the collapse of Monarch, as well as Thomas Cook – put pressure on the government, regulators, trade associations, insurers and merchant acquirers. We saw some businesses exit the market, and others remain under very different terms.
Today, if we want to make sure we understand the industry, and that everyone is suitably protected – or at least understands the risks they might encounter – we need live, accurate data.
There are businesses who already exist to do this, and others appearing who can help fill the gaps. By fully understanding the workings of individual travel companies, we can understand the risks to that company, and ensure they are assessed correctly.
“The more transparent we are with data, the more robust an industry we will become”
I can imagine some of you these words might feel nervous that this would result in higher levels of security and higher costs – but I don’t think that is necessarily true. Understanding a business fully also helps that business make better decisions; more informed decisions which will result in a fairer system for everyone.
By contrast, the current lack of data leaves room for knee-jerk reactions and panicked decisions which mean those left behind are left to pick up the pieces, and generally comply with tougher measures.
The more transparent we are with data, the more robust an industry we will become. Travel businesses will be treated on their own merits, and not tarnished by failures of businesses with very different models. We will also be far more unlikely to see suppliers arrive in the market, promise the world, and disappear as quickly as they arrived.
Surely a more informed industry can only be a good thing?