deal architect

Analyst Cam: Amazing "Off the Beaten Path" Global Experiences

As we have moved to virtual briefings, I have increasingly been excerpting short video segments (with permission) as part of my Analyst Cam series.

One of our research focus areas is Re-globalization. As I wrote here “MNCs are rebalancing their country portfolios, there are new emerging Tiger countries growing at rapid pace, hyperscalers have made DevOps a global competency – and all this opens up new opportunities for software vendors and service providers, many of which have mostly focused on English speaking countries and back office functions.”

I have had a MNC career myself (and have a family full of global nomads) so it is exciting to see a very different world emerging. My wife and I are part of a social group called “Uncommon Travelers” who present once a month on their recent trips. We recently had a chance to listen to Ken and Shirley Gould who are embarking on a journey which will put them over the 150 country mark. They presented on 18 of their most exotic places and experiences across 5 decades of independent travel – they avoid packaged tours and endure, even enjoy, unusual cuisine, funky hotels and extreme weather.  

I invited Ken to present on 10 for this channel.

Put yourself in their shoes and mull on the sheer effort it takes to get there and experience each. Then listen in awe to his endless curiosity and positive feelings for every place they visit. These are true global ambassadors – modern day Marco Polos  exploring the brave new world we are seeing emerge.

He covers so much ground in half an hour. I have invited them to come back and present on a few more experiences. They could easily present on another hundred.  

Burning Platform: Enterprise Software in Emerging Markets

In the 71st episode of Burning Platform, we host Hyther Nizam, President, Middle East and Africa for Zoho.

Let me start off by saying I became a fan of Zoho way back in 2006 after this session with the CEO, Sridhar Vembu. Over the years I have written plenty about their business model,  his leadership style,  his humble philosophy about life and rural revival and what he calls “transnational localism” 

I had a chance to talk to Hyther about an exciting new product release (he also wears a product development hat) announcement planned for early March. I asked him if we could also talk about “transnational localism” as applied to his region which spans 10 countries across the Middle East and Africa. He does in the conversation below and you have to marvel at the product enhancements (like RTL – right to left UX needed for Arabic and other scripts), the sweat equity, the pricing subsidies and other investments Zoho makes in developing each market.

Contrast that to most other enterprise software vendors who try to replicate their expensive direct sales, partner heavy model when they look at global expansion. Additionally, most of them prioritize English speaking countries in their global plans. No wonder most SaaS applications, even after two decades, have very little customization for most of the world’s local languages, currencies and regs.

Zoho’s investments in MEA are clearly paying off as Hyther shares. His is one of the fastest growing regions at Zoho. Not sure other vendors can match their pricing model, but there are several philosophical and behavioral attributes they should consider emulating.

Personally, I am in awe of how Hyther managed to accomplish so much with global travel constrained in the pandemic affected last couple of years. And how he seems to fairly easily juggle his product responsibilities as well.

More on the product announcements next week.      

On the road again - Part 2 - the Wild West of business travel

In part 1 last week, I described our family's experiences on a trip to Mountain States - 3 airports, 5 flights, 9 hotels, 2 rental cars, plenty of restaurants. While I was balanced and  reported what worked well, we saw a bunch of what I call "COVID copout" excuses for poor, even scary, service and often predatory pricing. And they are doing so while expecting sympathy for a poor 2020, neglecting that many of them qualified for bailouts and PPP loans. 

To check if our experiences were outliers, I polled a few executives I know who have taken several (at least 3) business trips in the last few months and a few analysts who have ventured to vendor events. Here are some of their comments. Interestingly, many have adjusted their travel patterns to compensate for the poor service. We are also starting to see them evaluate new competitors emerging in different travel categories.

Many executives I talk to complain of the fatigue from all-day Teams and Zoom calls. They cannot wait to get on the road again. Hopefully the experiences in these two notes will help you prepare for your own trips after 18 months of "lack of practice"

Airports

• If you don’t have it already, get Global Entry, TSA Precheck or Clear. Much of airport traffic for now is tourists without any of those pre clearances and regular TSA lines are long and chaotic.
• Have your coffee and snack before you get to airport. Airport facilities are understaffed and have long lines.
• If you are checking bags, not every airport has reopened curb side check in.
• If you use an airport and airline regularly, pay for a one time visit to their lounge. If they are less crowded and less noisy, if they offer WiFi and food and drink that would definitely justify an annual membership. But many still are not at full service, so check before you sign up.
• With most traffic for now being tourists and families, at some airports, long term parking may be in short supply.
• Allow 30-60 minutes more than that you did before the pandemic.

Airlines

• Expect significantly shrunk choice in flights. Read those airline emails and text messages more carefully - schedule and gate changes are way more common these days. Don’t be surprised with nonstops revised to those that require plane changes, frequent delays and cancellations .
• My one stop, no plane change was changed to a 2 stop, 2 plane itinerary. One layover was 4 hours, the other so tight I may not have made it
• International flying is chaotic as hell. You get contrary advice on quarantine requirements, COVID tests and vaccine requirements. Flight cancellations are very common. Major hubs like London Heathrow have become especially unpredictable
• On the positive side, international business class fares are much more competitive but be prepared to wear a mask for that long flight.
• I used to see a lot more consultants on flights on Monday mornings and returning Thursday nights. I think clients are telling them it is fine to work virtually.
• There are many changes in the airline landscape.  The ex founder of JetBlue has started a new airline, Breeze servicing secondary cities. Southwest has opened service to several new secondary cities including Sarasota, FL and Bozeman, MT and to even major airports like Miami and Chicago O’Hare.
• Delta, United, American are flying their larger planes meant for international routes on US trunk routes.
• Ask for a full can of a beverage to last the flight - the choices in flavors are likely much smaller. Many airlines are not serving alcohol. Or serving food, even for sale.
• I brought a sandwich to eat on the plane but felt awkward eating it 6 inches from my neighbor so waited till we landed
• I ate a sandwich I had brought on the plane and got many looks - some jealous, some hostile because I had my mask off
• The airline hygiene has improved somewhat during the pandemic - most are deep cleaning planes overnight, have newer air filters. But still take your own wipes, sanitizer as back up.
• They have social distancing and mask warnings everywhere in the airports, then they pack the planes so full, you are just inches away from strangers?
• Honestly, I am not ready for business travel, or any air travel for that matter, at this point.

Hotels

• Hotels miss their business travelers. They are more polite, less crazy and more savvy than tourists, especially families
• Many have moved to no cleaning of rooms or clean towels or sheets between stays. I guess if you yelled enough they would comply.
• They used to offer you reward points or discounts if you did not ask for clean towels each day. Or position it as "green" - less wasteful for the environment. Now the standard excuse is "labor shortages"
• Most of the large hotel chains used to tier their brands into logical price groupings based on breadth of services. Now even their low-end brands are shockingly priced. They are just being opportunistic
• I think I am going to ask my travel group to renegotiate our hotel contracts. I will make sure rates guarantee hot breakfast and daily cleanings. I will also ask them to negotiate a boutique or independent hotel in the cities we frequent, so our employees have options beyond the big chains.
• They brag about improved COVID hygiene then don’t clean rooms for days? I shudder to think how unhygienic the exercise room and pool have become.
• Hot breakfast has taken a huge hit. You may get a brown bag with a muffin and a bottle of water.
• There appear to be very few staff - tough if you need help with luggage, arrive late, need cleaning etc.
• I tried to get room service. Called several times. Went into an IVR - never spoke to a human. Gave up and raided the minibar. Fortunately my room had one.
• Hotels are struggling to reopen their dining. Hot food of any kind is a luxury.
• I was in a suite hotel, and the kitchen cabinets were completely bare. No plates, cutlery or towels. Defeats the value proposition of a suite hotel if you cannot make your own meals.
• I avoid the giant hotel complexes these days. They don’t have decent amenities  and you add a dependency on Uber since nothing is within walking distance. I try to find a boutique or smaller chain hotel with restaurants within walking distance
• Use electronic checkin and checkout. Most lobbies are understaffed
• The hotel check in kiosks were shut down and it took me 30 minutes to check in with a human. Not a great experience at 1 am.

Rental Cars

• They significantly reduced their fleets in the last year and it is showing at most airports. If you don’t have negotiated corporate rates the cost can be crazy.
• If you don’t have status with a car company, they may take your reservation but you may still not get a car. You should consider pre paying.
• The car hygiene is often unacceptable. You may have to stop at a store and buy some wipes and air freshener
• I know people who take Uber to a neighborhood Enterprise Car location. Or try lesser known car companies like SIXT.  They may have newer cars and more reasonable rates
• We ended up having to rent a U Haul truck. Reminded me of rental car chaos after 9/11.
• Airport shuttle buses for rental cars are unhealthy, how crowded they are

Uber/Lyft

• My Uber driver stayed off the freeway and didn't talk to me, so I would rate him an A+
• Long waits are common, surge pricing is increasingly common.
• Lots of Uber drivers appear to have switched to food or grocery delivery
• Seems like more ex-taxi drivers have moved over and brought their bad habits - loud music, complaining how lousy things are
• In my town, I have noticed they congregate at a certain mall near the airport, and you can see on your app, they don't move for 10 minutes. I think they have learned to game the system - they are waiting for a better fare.

Taxis

• In Paris, a taxi service took advantage of the pandemic to launch a mobile app, cleaned up their cars, and their driver attitudes. They regained market share from Uber.
• In most other cities, taxis have become even less reliable.
• I think airport authorities and mayors of cities should start monitoring taxis and Uber/Lyft more closely. I am afraid we have many gypsy/unprofessional drivers and crime will start to increase.

Dining

• Book ahead. Many places have much fewer spaces due to distancing. Many also close couple of days a week due to staffing shortages
• You are competing for reservations against locals and those who are driving, not flying, in to town. We tried to book at a restaurant a month out and all they could offer was 10 pm slots for several days. They open their schedule 3 months out and local patrons tend to grab the best slots.
• It’s annoying how Starbucks happily takes your money but have not opened up their restrooms or sitting space with WiFi.
• Even takeout places expect tips these days .What’s that about?

Events

• We went to an event which need a positive COVID test even if you were vaccinated. They had so many show up without test results they had to get a clinic to set up a test facility at the hotel
• We went to an event in Vegas with NO vaccine or test requirements. Only about 15% of attendees were wearing masks.
• I see that a lot of conferences are starting to push in-person options ("don't you miss getting together?") but hopefully don't drop the online/hybrid things that they learned during the past year and a half.

Bottom Line

The travel and hospitality sector is seeing an uptick but a large portion of that is leisure travel especially summer family trips. For business travel to return, service will have to dramatically improve and pricing become far more predictable and reasonable. If not, most travelers will after a couple of trips come to the conclusion "this is not really a better alternative to the digital fatigue of the last 18 months".

On the road again: Pandemic travel experiences - Part 1

Many executives I talk to complain of the fatigue from all-day Teams and Zoom calls. They cannot wait to get on the road again. So, I thought I would share our family's recent experience - 3 airports, 5 flights, 9 hotels, 2 rental cars, plenty of restaurants. I had described our journey across the US states of Colorado, South Dakota and Wyoming in this note here. 

Accenture's design agency Fjord, coined a term "liquid expectations" — "when you experience a service in one industry, it raises the bar for what you expect from other industries." I like the term and additionally like to benchmark against my experiences from competitors within an industry. I also benchmark against past experiences with a company.

Marriott tells me I have slept over 4 years in their hotels. Avis told me a couple of years ago some similarly crazy number of times we have rented from them. I have qualified for Southwest's highest level - Companion Pass - for nearly a decade. I am a Delta 3 million miler. Been to 75 countries. I have plenty to benchmark against.

This time I broadened the benchmark even further. I ran a survey of fellow analysts and business execs who have done multiple trips in the last few months. I will share that in Part 2.

Long and short - there is a noticeable decline in service across all travel categories I list below. While some of that is explained by labor shortages/supply chain issues plaguing the economy, there is also what I call "COVID copouts" - using the pandemic as an excuse for lowered service

Airports

All 3 of us (my wife, Margaret daughter, Rita and I) flew on different Southwest flights from Tampa (TPA) to Denver (DEN) and back. In addition I had a weather diversion on the way back and we had to land in Orlando (MCO) for a couple of hours.

With TSA Precheck, both Margaret and I found TPA and DEN security lines actually friendlier and quicker than before the pandemic. My daughter does not have it, and found her lines chaotic.

All 3 airports required masks, but the Southwest terminals were overcrowded. I tried to listen to a vendor presentation at DEN airport and it was so noisy I gave up.  The food outlets at their terminals also had long lines.

Southwest at DEN took inordinate amount of time delivering bags - almost 45 minutes both for our flight and for Rita's

Southwest at TPA did not have curbside baggage check-in (when we asked they said "COVID"). DEN did. Southwest had kiosks in both airports which generate tags which speed up the luggage check in process somewhat - however, many first time users find the UX confusing.

TPA usually has a taxi dispatcher. I waited 20 minutes - his handheld radio was crackling at the booth but he was nowhere in sight. One taxi asked for my destination and said it was not on his way home and he drove off. The next one tried to force me to ride share. A taxi! I refused. Even though the car showed the official United Cab logo, he appeared to be a gypsy driver. There was no identification, no fare meter - he quoted me a "take it or leave it" fare. He would not take a credit card or provide a receipt. As we were exiting the airport he nearly had an accident. At that moment, I briefly panicked and was about to call 911 to have him arrested. I have heard that in some cities, taxicabs have used the pandemic to clean up their cars and their acts to regain market share from Uber and Lyft. Clearly, not my experience at TPA, which in other ways still is one of the best airports in the country.

Airlines

Southwest reservations (including a call to upgrade), check-in, wifi on board all worked smoothly. Other than my weather diversion, flights were on time.

The in-flight experience was disappointing. They have quit serving alcohol because of unruly behavior on flights. No problem, but their COVID copout has been to reduce the choice in drinks down to only Coke, Diet Coke, Sprite, Coffee or Water. I had told some kids while boarding they had could have a treat onboard - Hot Chocolate. Before the pandemic, I have ordered that on many Southwest flights. I had to walk back and apologize to them. No hot tea - if you had a tea bag, they could offer you hot water, With the extra time from simpler orders, the flight attendants appear to have more time for monitoring for mask compliance. If you had it off for more than a few seconds while you were eating or drinking you would feel a tap on your shoulder. In contrast, I was surprised that the announcements made no mention of the HEPA filters, the electrostatic disinfectant and daily deep cleaning the planes go through. To me, making passengers relax is far better than tapping them on their shoulders.

More positively, the upgrade to Business Select was much more affordable than it used to be before the pandemic.   

Hotels

We stayed at 4 different Marriott brands - Gaylord, Residence Inn, Springhill Suites, Fairfield Inn, a Xanterra property (Old Faithful Inn), a Best Western and independent properties in smaller towns. Each had their good and bad but using the liquid expectations thinking you wonder why the Gaylord and the Best Western had superb buffets, but the Residence Inn and Springhill Suites had excuses why they could not host breakfast buffets. Old Faithful Inn had NO hot food at all. Across all the hotels we saw insufficient staff - my wife has a bad back and we would have appreciated some help with the bags.  Our worst experience was at the Old Faithful Inn. Margaret was looking forward to the historic property and we were paying Four Seasons type prices. She is not one to complain but was so disappointed that she went with a long list of issues to the manager who, without hesitation, knocked 50% off our bill. 

Rental Cars

I rented a SUV from Avis at DEN at an average rate $75 a day (we got a break for a week long rental). Not bad considering someone told us when we were in Jackson, WY the rates there were $500 a day. But ours had 45,000 miles, was all scratched up, did not have a toll tag (so we will see what that means in tolls and Avis add-ons). The Avis bus drivers at DEN airport were like the Southwest flight attendants - more eager to bark about masks than help people with bags. So bags were rolling all over the buses. Unsafe experience. On the positive side, the reservation online, the Express checkin and checkout were pretty smooth.

Rita rented a car from Thrifty at DEN and the checkin line was an hour long. She paid $100 a day for a compact car.   

Uber/Taxis

My taxi experience described above was scary. Rita used Uber/Lyft and found them fine. I have heard from others of long waits and that surge pricing is increasingly the norm for both services.

Dining

The best advice we picked up - ask locals. Some of the best meals we had on the trip came courtesy of our son, Tommy who works in the Denver area, and knows what is open, how long a wait etc. Thanks to COVID copouts at Starbucks and McDonalds we discovered that in smaller towns some of the gas stations have decent comfort food. We asked each if we could use their restroom and they pointed us to the gas stations :)

Mobile service

T-Mobile claims to have largest, fastest, and most reliable 5G network in the country. I would say in 1,800 out of the 2,000 miles we drove across the 3 states there was no 5G coverage. In fact, in half the distance there was NO coverage at all. I am glad we had backup AAA paper maps. The most shocking was at the Old Faithful geyser that we stayed near. It is estimated to get 4 million visitors a year and the best we could do was text each other. 

Bottom Line

While GE has adopted a new tag line "Building a World that Works", I don't get the same sense from travel executives that there is a focus on the "world that works" part. They are looking for sympathy because they had a crappy 2020. They conveniently ignore all the bailouts and PPP loans they got.

As the new CEO of Marriott recently said "I’ve described this phenomenon as the friction that exists between the short memory of our guests and the long memory of our owners.” Translation - "we need to take care of our investors/franchisees, sure customers will put up with the lowered service"

I am afraid the travel industry is the one with the short memory. They appear to have forgotten they desperately need to bring business customers back in droves. These executives may initially be excited to hit the road but after a couple of trips come to the conclusion "this is not really a better alternative to the digital fatigue". I heard some really interesting adjustments executives are already making. Will discuss them in Part 2 next week.

Ironically, Whole Foods opened a 48,000 square foot store in my town last week. It has a salad bar with 15 soups and 50 salads (not just individual items, specialty salads). They have gloves, disposable plates and cutlery for patrons, so the hygiene concerns are lowered. They have a decent sized sitting area where you can reasonably distance. Think of the chain of liquid expectations that is setting in motion. If they can do it, why not you, Mr. Hotel or Restaurant operator?