A few years ago, Cornerstone Information Systems CEO Mat Orrego wrote the first installment of this editorial. From his perspective, recent events have illustrated some exceptional, successful cases of the kind of problem-solving in action that he had discussed. For some, according to Orrego, it’s now about pivoting or perishing.
This pandemic has forced us to face many new realities and the significant challenges we will face in the post-Covid travel industry. From airlines to hotels to cruise ships, travel is all about the economies of scale — uniting people to transport, house, feed and entertain them — to generate profits. These modalities of service delivery are engrained, but their deficiencies in human safety compared with emerging alternatives will impact when and how people choose to leave the comfort of their homes and communities.
History has taught us that “big” ideas emerge from crisis, and these ideas become accelerants to confront difficult choices that were easy to push off during better times. Travel and its ecosystems of interdependent businesses will need to pivot operations and business models to remain relevant and generate value in the future. Work effectiveness, and the use of existing human and capital resources, are early pivot examples.
We are working smarter because of the forced mass adoption of platforms such as Slack and Zoom. As a result, our interactions and meetings are more flexible and focused. We can qualify and work opportunities from the comfort of our homes without expensive flights, meeting venues and restaurants. This way of working is starting to feel like a more effective way to run a business.
The transition by airlines from transporting people to transporting goods during this crisis was born out of necessity. But it was enabled through connected enterprises of cloud-based logistics platforms than can pivot business models and deploy resources to serve other purposes.
Travel Leaders Corporate leveraged its at-home agents to help support Covid health care services during this pandemic. What’s the point of an omnichannel platform if all it can deliver is travel services? More pivoting is required to leverage the core of what drives and employs this services-based industry.
In each of these cases, the human and technology infrastructure was already in place. The pivot is a combination of creativity and the ability of the organization to execute. The travel industry has many potential pivots that can have significant impacts on traveler safety and wellness while delivering a kinder impact on the environment and local economies.
The choice to pivot a business model is often forged from economic necessity. Now is the best moment to do something different, so we can employ the many bright and talented people who are sidelined and those who want to be part of the new travel industry. Before the new normal becomes business as usual, we should all start thinking about our pivot to deliver on a broader value proposition than just booking and buying corporate travel.
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Matt – TLC appreciates the recognition of our Emergency Pivot. We are now working on additional non-travel related services. We have the supply and others have demand if the infrastructure and will is in place. We’re learning new tricks and staying fresh until we return to our true north. If we don’t take care of our people as a first priority, they can’t take care of our clients.
Thanks Mike, I have been speaking with some other customers who have taken TLC’s lead and done some short term pivots. I love your comment on “true north” and putting our people first.
Absolutely. I agree 100 percent, Mat. You are always thinking and leading. Pivoting must also be strategic. Does the pivot help fulfill your purpose as an organization, or is it just temporary or just for money? It can be for any of these reasons as long as you go into it with eyes wide open. Organizations must go into these pivot conversations (and I have never used this word more) with clarity. Those who know who they are, understand what passion fueled their desire to open a business and solve a problem have an infinite versus a finite game in play, can make the right pivot decisions for the short and long term. So pivot with purpose!
I agree with the strategic and purposeful focus of a pivot. I have spoken to a lot of customers and suppliers that are trying to figure out how to re-engage with a different business model. I don’t see the incentives returning and so the next business models for travel will have to rely on diminishing GDS and supplier payments for the TMC channel.
One thing that never changes is the travel industry is ever-changing. My bet is, when we are post-Covid, we can expect the pace of change to go even faster. This will include announcements from global TMCs and fast-moving new entrants on how they are pivoting with their current infrastructure and technology to create new value. It’s imperative for travel agencies and TMCs to identify the changes that will have the greatest impact on their business performance and to implement measures now that maximize the benefits to their operations. If they do not pivot, “with purpose,” they will risk losing competitiveness in what will be an even more rapidly evolving ecosystem.
Excellent point MEG!! It is a tough transition we face when we enable our consumers to do the work others use to perform while trying to hold on to existing business models. 25 years of teaching the public how to book travel without an agent. The reality is that today’s ecosystem is not a friendly place for a intermediaries. The biggest TMC’s have scale going for them and but they all have the ability to leverage technology and deliver innovative services. Purposeful innovation and solid business relationships are a must-have in any pivot.