2020 has put immense strain on business leaders around the world. Though nearly every industry suffered as a result of state and local lockdowns, some have had a worse time than others. Few have had a worse time than those in the travel and hospitality sector. Travel bans turned terminals—into ghost towns. Airlines have suffered. International travel likely won’t recover for a half decade. Business travel may never be the same.
As we discussed in our last blog, 2020 may result in the loss of 197 million jobs in the travel and tourism sector. Pair this with a shrinking opportunity for government aid to keep businesses afloat, and the ripple effect may be severe. But if there is one silver lining, it’s this: people will always need to get from point A to point B.
Even if air travel has never faced something quite like this—the last true pandemic was more likely to hit the dirigible balloon travel space than nascent players like KLM or Avianca (founded in 1919)—air travel has survived recessions, terrorism, fuel crises, and stagflation. Again, people need to get from point A to point B.
Terminals Might be the First to Rebound—But It Pays to Be Ready
For those in the terminal space, delivering support services, passenger processing, and facility management to both airlines and travelers, you’re likely going to be the first to recover.
Passengers still need to travel, and barring a return to dirigible balloons, they are going to have to head through your doors. Airlines will still need you to send passengers to the right gate, and will continue to need de-icing, air conditioning, cleaning, and support. You’ll still need to manage the businesses that operate in the terminal. That’s where terminal management shines.
But as you get back to some semblance of normalcy, you’ll also start seeing the challenges you faced before everything shut down. Billing will ramp up, airlines will need more services, and vendors will reopen. If your experience is anything like JFK Terminal One Group, trying to keep organized is near impossible when relying on manual processes.
Four Challenges for Terminal Management Companies
Prior to working with MIBAR, Terminal One was months behind on billing, and even when they caught up, inaccuracies rear their heads. Luckily, they found a solution that addressed their needs, and helped them to overcome the following challenges:
Too Much Paper, Too Little Connection
A critical aspect of airport operations, service requests (i.e. for ramp services like baggage services, cleaning services, towing and de-icing) often must be transcribed onto work order forms or other manual documents prepared by MODs (managers on duty).
When not enabled by technology, this process is both error prone and time consuming.
Disconnected, Disparate, and Offline
Without a unified technology system in place, airports often find themselves “flying blind” with their budgeting processes. When departmental-level budgeting is handled offline, for instance, gaining financial visibility across the organization (i.e. ground operations, security, tenants and so forth) is virtually impossible.
Overall, this labor-intensive process for offline budget analysis is a major pain point for airport managers.
“These customers often have elaborate budgeting processes, most of which take place offline and are manually inputted into an Excel-based system,” said Jory Weissman, Vice President of Sales at business software consulting firm MIBAR. “Then, they extract the financial reporting and performance data from their accounting software and do the budgets-to-actuals in Excel.
A measure of the average number of days that it takes an organization to collect payment after a sale has been made, days sales outstanding or “DSO” is often determined on a monthly, quarterly or annual basis.
This data point creates significant headaches for airport managers, who have to track everything right down to the amount of deicing fluid that’s sprayed onto an aircraft while it’s sitting on the runway (and that then gets charged to the airline).
Handled manually, the tracking process can be quickly derailed when, say, a piece of paper is dropped in a puddle and rendered unreadable. “These seemingly-minor issues can really decelerate an airport’s revenue,” said Weissman, “and prevent invoices from being sent or paid on time.”
Poorly Tracked Contracts
For most airport flight operations, ramp services and concessions, all billing and expensing are contract-based, with most of those contracts originating on paper and then recorded to static Excel spreadsheets that employees refer to when generating invoices.
While logical in theory, these siloed, paper-based processes can quickly turn nightmarish for the companies managing them.
“This is a major pain point for terminal managers, most of which are dealing with a high number of outside vendors,” said Weissman. Adding to the complexity are the myriad rules governing billing, with variables like aircraft type, emplaned passengers and turns, all of which are managed manually. There are also various escalation processes that can easily be overlooked, resulting in lost revenue.
How to Overcome Manual Process Drag and Achieve Terminal Velocity
If any of these sound familiar, you may believe that there isn’t a solution built to handle your needs. There is. MIBAR worked with Terminal One to help this management group unify their operations with NetSuite and PowerApps, and can do the exact same for any other terminal management entity as well.
Though everyone in the travel space had been affected, the lockdown was much less damaging to Terminal One Group than others. Thanks to the automation, visibility, and ease of use that came from the MIBAR Terminal Management Solution, the organization not only can call itself financially sound, it’s ready to takeoff when things return.
View the full case study here.
Learn more about their pre-COVID journey to better terminal management and contact us for a free consultation.
5/19 Webinar – Cleared for Takeoff: Challenges and Opportunities for Terminal Management in the New Normal
With travel ramping back up, airports are starting to see activity once again. If you’re looking to avoid the back-office pain points that come with a full flight board, you can’t miss our upcoming webinar on May 19, 2021 at 12:30 PM EST.
Click here to learn more or register.