"Technology is here to stay. If before, the topic was “technology is coming”, now, people are entering in different travel agency, an online one, and booking themselves."
In this edition of Leadership Corner, we had the pleasure to sit down and discuss with Javier Garcia del Valle, Chairman and Group CEO for Happy Tour. With an extensive experience of more than 35 years in the tourism and hospitality industry, Javier Garcia del Valle is managing Happy Tour Group for Romania, Bulgaria and Turkey, the representative of FCM Travel for these markets.
We have a long partnership together, almost 14 years of partnership. But let's introduce Happy Tour to our readers!
First of all, Happy Tour, is what it is thanks to its people, so we have been very lucky in having a fantastic team throughout my years in this company, definitely some of them left, some new joined, but while they were in the company they always adapted very quick to our procedures, to our standards and they gave their best to make things happen. There is no doubt for me that they are the engine behind Happy Tour. At the same time, it is true that we have always tried to be a bit innovative in the Romanian market; when we talk about the Romanian market, we were actually one of the first ones who introduced the technology from dcs plus at that time, TINA. We have been pioneers with some other products also, such as IRIX, as it is called now, and the corporate self booking tool that you launched some couple of years ago.
We have always been a bit ahead in the sense that we always believed that it is room for improvement. We are not only innovative, but we also like to break the status quo. We believe that if you keep doing the same things, you will keep getting the same results, that’s clear. And for that reason we always wanted to do more, we wanted to do it differently, to bring new products, to create new structures, to change the way we operate, and during our years we have been doing things differently from the others, always keeping in mind that the client goes first, so all our innovations, all our new systems and changing procedures are always with the goal of the client in mind and this is coming from our international brand FCM travel. We want to be the alternative to the big TMCs, to the big monsters out there, we are flexible, so we believe that it is not the client who have to adapt to us, but it is us who must adapt to the everchanging needs of the client.
How do you think these needs have changed in the past 10 years, 5 years, 1 year? Do you think that the percentage of changes was quite different, more demanding? How does it feel?
The needs have definitely changed, and became more and more demanding, but not only that, they have become better prepared, in that way they are now demanding, just to give you an example on the CO2 request of each and every travel, you have to report on CO2. 10 years ago that was absolutely out of the discussion, nobody would care about it. Also, about the consolidation of the market, we are saying more and more companies, that were contracting locally, now they are consolidating their travel business so they get more benefits. Definitely today duty of care is a must have, it is not a nice to have as it used to be; for self-booking tool, receiving the answers is not any more good in 24 hours, no, we want it now and we want it correct, so again, because they have access to more information, they have access to more products, so they want to do it themselves, they know what they are doing and the online booking tools are coming into place.
What we see basically is that the big multinationals would like to have a big online adoption, they are really striving for that, so this is their goal, it is true that it is not always possible because, let’s put as an example Romania, maybe you don’t have all the products available online so you have to do it offline, but the online option is a big goal and in Romania it has been more recent, 4-5 years ago that was not in discussion, nowadays it is, many companies are already online but at the same time they want to know that if something doesn’t work, they have an agent to rely on, they have a telephone, or they have an email or they have a chatbot that they can use it for immediate contact. So, the human touch is always there. Technology is now with the AI, it is improving very much and the technology is learning our needs but at the same time until we are there, the human touch is really important, because travelers are human beings so, no one better is than human being to understand what you’d feel, how you’d feel, what you’d need when you miss a plane, when the system doesn't update your platform and you miss a flight, this kind of things, you want to have somebody there. So with the online adoption, technology will definitely come to our day to day activity more and more, but the human touch will always be there and that is actually the perfect mix. You need to adapt, you have to evolve, these days and especially after this pandemic, without technology you are out of the game, it was proven that those who were able to adapt quicker, survived. But at the same time, we cannot forget that companies are made of people. Company is a name, it’s a brand, but it’s also much more than that, it is a number of employees that you need to serve, to help, to make sure that they can do the job and for that reason we call ourselves the alternative, because it is not everything: we provide state of the art technology, latest updates, continuous improvement, but at the same time we are here as a human, as a person in case they need it.
How did you shift the action plan for last year? What were the main actions you have taken?
Like every business, the first thing that you wanted to do is to make sure that your employees were safe, as we did not know how this pandemic was evolving so, the first thing that we did was to send everybody home to work remotely and that was to make sure that the safety of our employees was guaranteed. At the same time, you need to make sure that you secure enough cashflow to maintain your operations because one of the main problems that travel agencies suffered from this pandemic, was the fact that not only we didn’t have any incomes, but we had to do refunds. So it’s not that you don’t have money coming in but you have money coming out so, that is the critical point and the big difference between HORECA or restaurants or many other industries compared to travel agencies or aviation which is in our case we didn’t have any sales, on the contrary, we had cancelations, so we had to give the money back, so to secure the necessary cashflow was key for us, and at the same time in our case, and I am modest enough to recognize this: we did a couple of mistakes that nowadays probably I would not repeat. So, we were very focused on when the pandemic would finish. At the beginning of March, we were focused, as everybody was saying that by June or so this will be over, having in mind what happened in China, 3-4 months and it will be over. So, we were very focused on that June July it will be all over. But then, it was not over, and it was a bit pushed down to the moral of the people. Then we said OK, for sure September – October – that’s it: travel will recover, so again we have pushed up our enthusiasm and September, October came and not only that the situation didn't improve, on the contrary, it was even worse, so again the moral of the people went very very low so at that moment we said: it is clear that we cannot control when this pandemic and how this pandemic will end, so let’s stop focusing on the pandemic itself and let’s focus on how we want our company to be when this pandemic is over. So why put so much expectation in something that we cannot control, instead of focusing on what we can actually control, which is the company. And from that moment on, the entire procedure, the entire philosophy, everything changed within the company and basically, we only focused on how we wanted our company to be when this pandemic was over. So, for instance we are almost paper free company, everything is in the cloud, we are technologically connected. So as in today, I don’t need people in the office, we have reduced our offices space, because we don’t need it anymore. So this is one of the mistakes that I have made which was to focus to much in giving hopes about the recovery, which was something that I cannot control. In that moment, we shifted the focus on what we can control, which is our company and since then we are fantastic and indeed, we have to take some tough decisions like many others. I think that we were like the last company in taking tough decisions because I believe, as I said in the beginning, companies are made of people, we are human beings and if this company has ever had any profit, it is thanks to those people. So, I didn’t consider correct in the first place to cancel or to fire employees, no, in our case was the very last thing that we did and we did it starting from September, we maintained all employees until September, hoping for a recovery. Unfortunately, it didn’t come, and at one point we had to do it, but we checked, and we reviewed that we get each and every possible cost that we could before touching the employees. And for that, honestly, we are very satisfied that if we look back, we say, yeah but if we would have done it before maybe you could have saved more money but what I think is that we have proven in the worst possible moment that our main focus is our people and that will build in the future. For that reason, we have people in this difficult situation who are still with us and still trusting on us and people who want to join us because they have seen how good we treat them in the worst possible moment.
In the midst of every crisis, lies great opportunity. What opportunities were out there for Happy Tour during the last year?
First of all, it is said: "don’t waste a good crisis" and we believe in that and again, for that reason, we have restructured our company and the different departments that we had, were reshaped, we have invested very much in technology, what we have done this year, in a normal circumstance it would have taken easily 3-4 years, so we have speed up all the transformation that the company needed, FCM has invested heavily in this pandemic, they have done acquisitions, they have invested more than 70 millions dollars in acquisitions, they have invested more than 30 million dollars in new technology, the new rebranding of FCM so basically, let’s say that we, as FCM, want to come out of this crisis as a new company, as a new brand, new philosophy, being the alternative, new technology, profitable technology, an absolutely state of the art with AI technology and more to come. And it is proven that we had some nice winnings during this pandemic, that will eventually start to produce, there are some nice clients that are joining FCM, that are seeing in FCM this flexibility, this mix of technology and human touch, international, global company same with local approach and indeed for us had been an opportunity, in the sense that when you are focusing on servicing your clients, sometimes it takes longer to define new projects, to really focus on them, in this case unfortunately we didn’t have to many clients to look after so, we focused very much on the projects and they are already paying out so this is good, we are very satisfied in the approach that we are taking, that FCM is taking globally and not only globally but also in Romania, Bulgaria and Turkey, that are the 3 countries that we control or that we manage and indeed we are seeing the benefits of what they have done and again that they continue to invest, they continue to acquire new businesses that will help the clients eventually. We have taken this unfortunate crisis, because when we see the crisis, we have to look not only on the loss of business, loss of jobs but it is very important the loss of lives that this pandemic has taken, which is priceless, that you cannot replace. It’s a tragic situation, indeed, as business people we are obliged to use our resources to make success from a failure, from a dramatic situation, to make the most out of it and this is what we have been trying to do and I think we did, and we have seen that, as of today, according to some reports, we are growing steadily , we are still far from 2019, there’s no doubt, we want to be in the range of 50 - 60% recovery until the end of this year and figures are showing that we might get there. Again, it’s something that unfortunately does not depend on us. In Europe, the lack of unification within the European countries is damaging us very, very much. It’s absolutely unbelievable that people that are vaccinated and have to go on a transit to an airport, they have to do a PCR and an antigen test. If I am in transit and I am vaccinated and my destination country does not ask for a PCR, but being in transit in an international area, behind your borders you are asking me for a PCR, what for?
According to IATA, before the pandemic, an average one-way ticket was in between 240 – 280 euro, so for a family of 4, an average flight would be in the range of 2000 – 2500 euro. Nowadays, because of the PCR that you have to take to go there and to come back, that price has increased in the range of 70%, which basically has taken a lot of people from traveling, because it has become very expensive for them and unaffordable, so basically, they just refuse to travel, for a time being, because, suddenly it's 70% more expansive, because, if here in Romania you might have a PCR test, in 60-70 euros, there are other countries in which it might cost up to 175 euro a PCR test. For a family of 4 we are talking of 700 euro. But I am positive and I believe that all of this will be solved, EU will realize that they need to solve ii, and little by little it will come back to normality.
Would you change something that you did one year ago?
The first one would be to not focus so much on the pandemic itself but in what we can do, again, sometimes, we try to cover too much, to put too much on our plate and at the end if you focus on too many things you end up doing nothing. We should focus on what we can control! And probably the other thing, despite that I considered that we put all the effort in looking after our team, our colleagues, I think that there is never enough, we always can do more, because imagine, in a company like ours, with almost 150 people in 3 different countries, the fact that Bulgaria and Turkey were, in a way, blocked from us, we couldn’t go there, we couldn’t make them feel part of the team, it was difficult, you probably have faced that too with all the offices dcs has in other countries. Again, we had and we still have on a monthly basis management meetings to answer all they questions they have, we have weekly meetings, team meetings, one on one meetings but we cannot, yet, realize the consequences of this pandemic on our colleagues. Some of them, husband and wife, working with the kids at home, it has been really tough for them, some of them lost their jobs, both of them, some of them had salary decreases, both of them, in different industries, we had colleagues working in the airlines and travel agency and both of them lost their jobs. There is a moment when there are so many things going on that maybe you don’t pay enough attention, I’m not saying that we didn’t pay attention, we did, we want to believe that we did, and again, we kept them as much as we could, but I believe that we can always do more. The team is our crucial part in this business, without them there is no business. So, we need, as management, to focus more on making sure that they have all the answers, that they understand what’s going on, that they know the company's plans, that they know the company situation.
It is normal that, when you are seeing colleagues of yours leaving the company, you might start asking: will I be the next? We have to improve in communication, and this is being out of critic. We want to believe that we have done it quite OK but I think that there is room for improvement in everything we do and I will never take it as is and this is the best we can do as an answer, no, there is always room for improvement and I will probably put a lot of focus that we have been 1, 5 years almost in this pandemic, and it’s a lot to take on everybody's shoulders so we need to be there, the companies need to be there, the managers have to be there, they have to understand what our plans are: are we safe, are we not safe, is this a company to stay in, can we afford the months of crisis, can we not afford it. Since September we have improved much more in this communication, we have done internal surveys to ask them. Especially at the beginning, with this uncertainty, not knowing what’s going on, probably to focus too much on the crisis itself, rather than the company and I will focus probably more on our colleagues. Online is not that easy, you cannot transmit, you don’t get to fill it. It’s difficult, and we need to put a lot of effort and make sure that they receive a lot of support from us, and make sure that they realize that we are safe, that nothing is going to happen, and that there is a future, a bright future in front of us.
What are the greatest challenges Happy Tour currently faces?
One of the greatest challenges is the growth that we are experiencing. I don’t know if you have heard that recently there have been some discussions about merging and acquisition of companies in the travel management companies space that AMEX has offered to buy Egencia, TripActions offered to buy Reed and Mackay, and so on. So basically the number of global TMCs is reducing, so more than challenges we see opportunities, but those opportunities, are coming with challenges, because you need to make sure that if you had the opportunity of wining a very important customer, you have to make sure that you provide them the right services. In many countries, including Romania, we have limited resources because of the pandemic, because we are in this moment, in which the business is coming back, but not enough to start recruiting again, but you need to serve those who are coming. The thing is that we have seen that there is a recovery and suddenly it goes on again, but then, because of the Romanian labor regulation, is very difficult if you hire. You don’t have enough business to take all your people, but you would love to have one or 2 key people in key departments, but you cannot take them. So it’s difficult, that is the challenge, again we are very lucky and very happy that FCM travel won big, very important key players in the industry and clients we are looking forward in servicing them in the best possible way, and in a way that might be a bit of a challenging for the next one, two months.
What role do you see technology playing in addressing travel recovery?
Technology is here to stay. If before, the topic was “technology is coming”, now, people are entering in different travel agency, an online one, and booking themselves. The step that technology has taken, in the last year, is, in size, as the previous ten years. Technology is here definitely to stay, I think more and more mobile is the king, not any more laptops, computers, desktops, it is: if you are not mobile, you don’t exist, and it will definitely help to the recovery, because you will have access to all the information immediately and you will be able to plan your travel and your trip, quicker. We are seeing that one of the things that this pandemic showed us, due to the restrictions, is that the booking days prior to departure, has reduced significantly, so nowadays, it’s an average of 3 - 5 working days, and while before was 13 - 15 working days, I’m talking about corporate segment. Why is that? Because until the very last moment you don’t know if you will be able to go, what restrictions will apply, this general list that the Government of Romania is issuing every week is changing so you need to wait for the new list to see if you can go, so to have that information in your hand, is crucial, is vital, you cannot do it without technology, if you are not adapted, if you are not changing, with the needs of the client, you are out, and the clients are demanding that. The clients want to know what and want to know it now.
I need that my suppliers and partners in technology are able to provide me with the information that I have to transmit to my customers. If it is through the OBT it has to be there and in FCM travel we have portal for our clients in which we are embedding information constantly, constantly is live because what is valid today might not be valid tomorrow and it has to be constantly updated, and that is technology. It’s also important technology, because you are becoming more and more demanding nowadays, not only because of the pandemic, but also so this AI, is helping systems to understand what your preferences are, with the pandemic, more and more people are looking for the aisle seat in the plane, because they don’t want to be stuck close to the window, surrender of too many people, they want to be able to step out quick so these things are changing and as a company you have to provide that technology, you have to make it available.
What advice do you have for any CEO from the travel industry?
I would say challenge everything, rethink, redo, reinvent. Nothing is definitive, you have to keep improving constantly, keep constant contact with your clients, to clearly understand your client's needs, because those needs are constantly changing. What was OK one month ago, might not be OK anymore today so you need to constantly rethink how to change procedures, how to improve yourself, technology, technology, technology without forgetting the human touch. So overall keep challenging each and every step of the procedure, of the travel journey.
It is important for you to know: What you do counts, what you do it’s important for many travel agencies, for many travelers around the world. Sometimes it might be tough, sometimes we can be tough with you, but overall what you do counts, we are very thankful for the support that we receive, and again, we have already 13-14 years together and many more to come.