There was surprisingly little drama about economic gloom at this year's ITT conference. Instead, in measured and thoughtful debates, Kuoni's Peter Rothwell and other panellists predicted next year would be slightly better than this year. Tim Williamson of TUI thought trading conditions might be tougher next year but said there was a real sense of optimism in the business about how quickly Mexico is recovering in popularity after the swine flu issues of earlier this year. Mike Greenacre of the Co-Operative Travel Group said he expected further consolidation as small to medium sized businesses go out of business this autumn as they run out of cash. We heard Terry Fisher of Gold Medal encourage industry partners to "respect the supply chain" and work closely with agents and operators to drive volumes. Jumairah Beach supported Terry's comments saying in December they were looking at 50 per cent occupancy for the first quarter of 2009, but after working closely with trade partners to reach last minute decision-makers had finished Q1 with occupancy levels of 91, 93 and 96 per cent.
What the economic pundit said The inevitable economic forecaster kicked off the conference. John Walker from Oxford Economic Forecasting decided not to tease us with claims of V or U shaped recession. Instead he reported "significant recovery" in the past three months, said recession should end at the end of this year but warned unlike the big bounce back of 2002 the 2010 recovery from this recession will be "modest". Other top tips from John for the year ahead
- oil to stay under $100 a barrel
- governments with debt may prefer to encourage some inflation (which erodes debt)
- the big unknown is consumer confidence and consumer spending
Consumer uncertainty Tackling that lack of certainty about how to talk to and reach customers was the real theme of the conference. Consumers are booking later, shopping around more, and being more cautious, looking for good value. My personal concern is that unemployment is likely to continue to rise for at least six months after the technical end to a recession, so we may find consumer uncertainty lasting long after the economic forecasters say we're into recovery.
News International presented some new "Consumer Eye" research of 3,000 people, which reflected what many in the room were already experiencing.
- Seven out of ten people said they will take a holiday this year but 16% are yet to decide where and when they will go.
- A fifth of all people said they were booking later and closer to departure than ever before but interestingly 9% of families said they were booking further in advance.
- One in three people planning a holiday will go abroad, one in six will stay in the UK and a quarter will take both international and domestic holidays.
- Consumers are also changing holiday plans this year a third said they would still travel but they would spend less, a third said they would take more UK holidays, a third agreed they would take fewer holidays and a quarter said they were changing which destinations they would consider.
Taking the right tone Chris Pilling of HBOS direct banking and First Direct pointed out that the word credit comes from a Latin word meaning "belief". He quoted YouGov Superbrand advice: "move closer to consumers and support them in 2009 with simple clear benefits and a modest tone of voice." Chris also quoted retailing giant Stuart Rose; "the UK consumer is fed up with being fed up"
First Direct is responding to uncertainty by an obsessive focus on customer consistency - making sure everything is structured to suit customers so phones are answered swiftly and even offering a £100 payment if you become a First Direct customer and decide the service isn't good enough and you want to leave after six months. That's a confident business.
Chris also highlighted the fact that rather than waiting for customers to respond to products being launched increasing numbers of consumer goods businesses are using "crowd sourcing" to help them understand customer opinions and to shape how they develop products and services, using facebook or online research panels. This is definitely something more travel businesses could take up and pioneer.
Terry Hudghton the Co-Operative's head of brand gave a fascinating presentation about how the organisation had undergone a complete overhaul over several years to overcome consumer perceptions that it was a business about small corner shops selling limp lettuces. He highlighted Millward Brown's corporate reputation index that says 60% of what people think about your business depends on leadership and reliability. Are you innovating, offering leading thinking, being reliable and consistent in what you stand for? The Co-Operative has taken a clear stand across its many businesses saying "if the benefits are passed around its good for everyone" and ensuring its ethical campaigning philosophy stretches through a clearly branded business. He said "its best to be bold. To be clear, honest, consistent leaders."
Tim Williamson of TUI who said also echoed consistency in a recession, "the planet doesn't know its in recession," he said. "We haven't dropped the green ball with the pressure of trading conditions. It's up to us all in the industry to be part of keeping green issues on the agenda and it can't be greenwash". I came back to the UK with these words echoing in my mind and found several full page adverts from Marks & Spencers in the national newspapers saying they were continuing to invest in ethical products and services because it was the right thing to do.
Anger at government taxation There was a rumble of discontent throughout the conference about how the industry is being used as a "soft target" for taxation by government. The widely held view was that we're not creating a coherent voice. We must make sure we're not legislated out of business. A question to Cherie Blair about how the industry could be heard on the fearsome issue of APD was applauded by everyone in the room.
So ITT 2009 was a thoughtful, measured conference highlighting the need to act differently in changing economic times, to listen to customers in different ways, to be aware of their concerns and changing views, to keep good industry partners close to your heart, to be clear about what your business stands for, to keep innovating and be obsessive about customer service. A mantra for success in 2010.