"Keep an eye on technology. Keep an eye on changes. "
In this edition of #LeadershipCorner, we had the chance to invite Joaquin Navasal, CEO of Consolid Global Travel Solutions, one of the forward thinking and technology driven companies. We discussed about the evolution of travel industry, challenges they had been facing in the last two years and their strategy for future growth.
Consolid Global Travel Solutions is the largest travel agency alliance in Latin America, having more than 10 years experience in building a solid reputation with companies and associations. It is headquartered in Buenos Aires - Argentina, operates in 13 countries of Latin America and United States of America, and has made up 25 alliances.
Let's discuss about Consolid. If you would pitch Consolid, what would your pitch be? How are you different?
We should start with the beginning and how Consolid has evolved. Consolid was born as an alliance, as a network, 18-19 years ago, with the idea to concentrate one leader from each country in the region. We were interested in their BSP position in each country, because it was the most relevant statistic. To be a member of Consolid, you had to be number 1 to 3 in BSP in your country. And the idea was to create a group to share best practices, to start to negotiate directly with the suppliers and providers as a group, with huge volume and big negotiation power.
We have managed to deal with 25% of the BSP in Latin America. Back then, we started at the same time as One World or Star Alliance. If we are going to be big, but only in my country, at the end of the journey, we are going to be very small. We needed to be bigger, to put our capacity in front of a new scenario and for 9-10 years we operated in this way - we agreed with GDSs, airlines and were proactive with them, but after that, the market has changed dramatically. We were 13 travel agencies in old fashion way of the travel agencies, everything was done manually, our focus was on relationships with the airlines and chain hotels, and not focusing our flow, our process and our tools to manage everything in a competitive way. In 2003, we were number 1 in Argentina and then OTAs appeared in a quite powerful way. Then years later, we were number 6, and the number 1 was way ahead of us in number of daily transactions, in volume, in relations with the airlines. On the other hand, we needed to try to move to other stages of our business and we defined another platform to manage it, named Consolid Planet. It has created in 2013, Consolid Planet with the idea to continue with local operation and took the decision to create a new unit of business for all of us, like an umbrella, based on technology, based on process and based on thinking unitary what the market demands now.
In parallel with our local operation, we identified new fragmented content – it’s dramatic because now, in Latin America for example 45% of the entire airline offer it’s not in the GDS. It comes with a lot of challenges, first of all, integrate all their offers in one tool developed to the clients. This is on the sale part, but we have to administrate it, each transaction in our back office, low cost carriers, NDC carriers, direct connection don’t give us this information, and we have to develop our own solutions to receive it in our back office, to continue managing it, to offer a post-sales support for thousands of clients. We put our focus on this and have created this unit – we are using the entire content of the members of Consolid under this umbrella, and I am the responsible of Consolid Planet.
We are selling a relevant volume and add it to our partners, operating in an international, global way. We are suppliers for more than 18 OTAs, from China to Europe and US. We are fulfillers of more than 300 different TMCs worldwide who need Latin American content. The concept is that we have the know-how of the Latin America – it’s not only about getting the best content available, is to know exactly in which occasion we have to go to the airline or to the government. Latin America is not like Europe or US where things are simpler, and here everything is totally different – invoicing, like taxes which are different in every country, to move money cross borders is very difficult too. These are the areas where our expertise can make the difference. We have to think the idea to offer ‘’Latin America’’ for the guys outside of Latin America, to use the content of Latin America, to enjoy Latin America without the cost to know and to put your own operation in Latin America. I remember that 4-5 years ago, I had a meeting with a big OTA from Europe, saying that they are going to open an operation in Argentina, and I said that it has no sense, because he would not sell no more than 10,000 tickets per month, the competition is huge here, and he would not earn enough money. He should have put his focus in marketing, acquisition, to improve his tools and we had to be partners. In that way, we rise from a small number of transactions to more than 100,000 per month, operating in all of our countries and rising up.
In how many countries do you operate with Consolid brand?
13 in Latin America plus United States of America – we have opened one year ago an operation in US. There are opportunities and we have established the headquarter in Argentina. In Argentina, the salaries are smaller than in other countries in Latin America, in comparison with the value and the quality of the employees. There are really good employees with a lot of skills, but the cost with human resource is more competitive. We have created a mix between a good service, a good team with a fair cost in our daily operations. We have our own technology company – it’s a different company, it’s a 3rd party name company, but we are the owners of 50% of the company and they develop mostly for us. And the last challenge that we have faced in the last 6 months is that we need to integrate our administration, because each country comes with different demands, and we need to have a global view of our business. We use Tableau, we use data analysis, different tools and we are adding artificial intelligence in some cases. From these needs, we have started our project that is based on your ERP, TINA, we need to define a standardization process and work in the same way. We use a back office in each country, but the reports and the view are not the same. We need to integrate another platform, in order to unify all of them and look correctly to our business.
What would be the main take-aways from this period- what have you learned as managing Consolid during Covid-19? How did you react when everything started?
When the COVID appeared in Latin America, it was the end of March and during our first meeting we have discussed about closing the office. We have started to change to WFH as soon as possible, we were working in Amazon Cloud, so we didn’t have any problem to move to our home, but honestly, the first 60-70 days, our only concern was that our team needs money. As individuals, not as a company, we needed to survive. In our last face to face meeting, I said to all of my team that we have the resources to live a year. They didn’t have to worry about the company, but to worry about their families and health. I don’t know what the future will provide, but we are going to take our time to think and try to figure what is the new scenario.
In May 2020, we have started to work with guys from different countries in Latin America, to work with some airlines, and have tried to move with the Embassy of Peru to help moving people from Argentina to Peru or from Peru to Argentina. It was great, not only about the business, but about the feeling that we are doing something good for others. At the same time, we have started to think that there is an opportunity. We have two ways: we can sit and wait consuming money, or we can decide that this is a chance to put our resources to recreate and improve all our tools. When we have started, we had 18 direct connections, one year later, we reached 38, and at the same time, we had resources invested in: exchange, refunds - mostly manually, now it is automatically 100%.
We developed ATC shopper, we have developed the same exchanges and refund services from Sabre, we added Galileo in the same solution. We tried to move faster, to give the best offers in Latin America, and to recreate our idea from a travel agency as a technology company who delivers airline and travel content. That is totally different, now you are going to receive our content, but not as a consolidator, you are going to receive it from an API with all of our resources and our local conditions that are superior, it’s a mix. We have to be “Travelfusion” in Latin America, we have the same connection, but we are here, Others can create the credentials, but I have the best local conditions. This is not only about the connection, it’s about the connection and the best content available. And if you have post sales problems, we have the team, the local team to fix any problem with the airline and to facilitate the overall service. I think this is part of our success. First of all, we have decided to move and change the way we deliver our content and the way we offer our content, and add value to our proposals for our partners. The other thing is to move fast, in order to help online sales, because in our view, the digitalization is the first one that will recover. We have to put all of these, not in corporate because it demands more time, not in MICE, but in online. We are putting all the effort in online.
Looking forward, what are the top priorities for you in the next couple of months, one year from now on?
We had a meeting with our managers, thinking about what we are going to do next year, what is our target, what we are going to do and in which way. With exactly the same idea – to focus on tools and content, we want to move to the corporate business. Now we are signing the last 4-5 days agreements with 3 different global networks, in this way, we are able to be fulfillers and partners for Latin America. If you want to be present in Latin America, without risks, this is the first step, and then you can decide if you go as a player or use our services, and we are increasing our operation in that way. On the other hand, the most important thing which we need to improve dramatically is our administration. When you manage 13 countries, 40 different sources, payments from the entire world, VCCs, move invoices daily in different currencies, there are a lot of challenges to be tackled in order to be efficient. We need to have everything clear; we are putting personal and human effort because we still don’t have a good solution to reduce it. I think TINA, and your company, will be our solution for this year. Now, we are very strong in the content, offer, view, market, and are selling double and a half than before the pandemic, and we are still growing. We need to manage it well, because our possibilities now are great, in the next 3 months we are finalizing 3-4 big agreements and probably, we are going to double again. But this means double of: daily transactions, refunds, invoicing, payments, services and this is part of a new challenge. I think it’s the moment to consolidate and to give my team the right tools to manage it.
What do you think is the biggest challenge for Consolid?
We are so close to a next step! Consolid will continue entering new markets, adding new content, but sometimes, we have to face another player. I want to find a way to create history, to be leader in Latin America and we probably are getting close to it.
Do you think that the pandemic has exposed weaknesses from the travel vertical? And what is the top of these weaknesses?
A lot! I think that the pandemic reveals the size of the most businesses and the business models - airlines, travel agencies, chain hotels were sustainable and scalable. The thing is that we need to be efficient, we need to find out the faster way to deliver the content and to administrate it. Our industry only uses it in the sale position, but from the sale to the end of the process, all was manually, from the old century. I think that travel agencies need to have a strong relationship with technology companies, so they can adapt to new situations and earn market shares. It is a mix: the companies with money and with view, increase their volume and market share; the companies with huge structure cracks and in the middle, there are just small travel agencies that are trying to find a way to keep alive; the mid-size is going down because it is a hybrid. There arise opportunities. If one guy decides to give an umbrella over a small travel agency and give them opportunities, solutions and technology, probably they are new concentration like it happens in US… a new era of travel will be for the next 5 years. It depends... 5 years ago we earned money with the segments from the GDS, from the airlines, from the commissions, and now there are no commissions and the NDC affects directly our income. We need to reinvent where we are going to earn our money, and this is another story to tell.
You have mentioned something about those tech-savvy companies. How do you see the role of technology for your business?
For us, technology was the key of our view from 2013. We have started with some simple developments and then we decided to buy a part of a tech company and not to depend on other 3rd parties. The core of our business it’s about content and delivery of content. When we took the decision to work with your company, I said that we have our own API, we have more content - because this is the core of our business. dcs is a mix between a good offer and a great team. Because we were looking for a global standard solution. From the invoicing until the sales, we have a standard and we think that it offers us, the same view as we were searching for, in order to manage properly our operations.
What advice do you have for any CEO from the travel industry?
Keep an eye on technology. Keep an eye on changes. Test your ideas day by day and think that you have to be ready to move as soon as possible, from one position to another, because travel is continually changing. Our industry is trying to readapt and, in the next 2 years, will be big challenges. We have to be prepared and be alert to changes. Now more than ever, travel is changing and changing again.
Other editions of #LeadershipCorner can be read here:
- Pasi Latva |CEO of Elämys Group, Reed and Mackay, Finland
- Daniel Ponzo | Zahid Travel, Reed and Mackay, Kingdom of Saudi Arabia
- Tzafrir Ben-Avinoam | General Manager of Btravel Online, Israel
- Javier Garcia del Valle | Chairman and Group CEO of Happy Tour, Romania
- Lucian Boronea | CEO of Accent Travel and Events, Romania
- Daniel S. Oliveira | Partner Director of A1 Viagens, Brazil