Business partnerships that are complex from the start stifle innovation, delegates at this week’s EyeforTravel Summit were told.
Dan Christian, chief digital officer at The Travel Corporation, which includes Red Carnation Hotels, Contiki and Insight Vacations among its brands, advised against bringing in lawyers early on.
He said brands should find a business problem they can work with a third party on to solve together and build trust. “Find something where there is mutual trust to get something to work,” he said.
Christian said business partnerships should not be like getting divorced before you get married, as some people believe. “Most people don’t want to go through that at the beginning.
“I can see it’s beneficial from a legal point of view but no one wants to go down that road. Establish a proof of concept together.
“Of course there has to be a core business problem and a solution. Both sides have to see real benefit, but ultimately there is also a relationship there. It’s a gradual process.
“Get something established rather than trying to bring in the lawyers and do something complex. There is no better way to stifle innovation than making is complex at the beginning.”
Christian said the Travel Corporation is privately owned so operates entrepreneurially and can “move quickly”.
He said the company works successfully with start-ups and has partnered with many from when they were “two or three people working round a table” to series B funding.
“They get great scale and we become experts in their platform,” said Christian. “What’s key for us is to find a way. Expediency is most important.”
Antony Price, BMI director of marketing and customer, said the partnerships it has are like marriages but with very short, concise pre-nup agreements in place.
“You go in with the best intentions. You hope there’s going to be this good long-term partnership with aligned goals.”
Price said that as a small boutique carrier it can often be frustrated by “legacy contracts” that are difficult for it to navigate and be restrictive.
He said some GDS partners have been quicker to change than others. “What was relevant five years ago is not relevant now and will be less relevant in five years’ time.
“We recognise we could do a much better job with more flexibility and control to manage our distribution.
“We are only 20% direct, partly because we are business travel focussed and we are dealing with a lot of TMCs but also part of that is we have these legacy agreements with distribution partners.
“We are still in the middle of some quite difficult negotiations at the moment about how we chart a path about how we distribute our own product.
“We offer a very much bundles product. We don’t need a platform than enables us to do ancillary sales. We just need flexibility to move forward.
“Working with small start-ups for us is perfect. We find them to be much more nimble and flexible.”
Christian agreed, saying: “The speed at which customers’ behaviour is changing is becoming more rapid. We have to be much more nimble than ever before.”
Examples of successful partnerships the Travel Corporation have forged are Stackla for aggregating social content and Feefo for reviews.
Christian said firms that consider successful partnerships as “their best-kept secret” benefit no one although he said this does require a change of corporate culture.
Price advised potential partners to do their groundwork before making an approach. “There are so many we don’t have time to sift through them all.
“It makes much more impact if the person has done some groundwork and worked out how they can add value and articulate that in a short summary that’s really punchy.”