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Your View |
29/08/2006 |
Your View
Your View is a new feature from our daily online newsletter Travel Today, giving you the chance to air your comments and opinions about industry matters: Email traveltoday@travelweekly.com.au
TOPIC: QANTAS EXECUTIVE GENERAL MANAGER JOHN BORGHETTI FIRES BACK AT CRITICS WHO CLAIM THE AIRLINE IS TRYING TO BYPASS THE TRADE AND COMPETE WITH DISTRIBUTORS (Travel Today, July 4)
Editor,
I find myself in something of an unusual position, in that I agree with John Borghetti in his spirited defense of Qantas (Travel Today, July 4)
Of course Qantas has to change, of course Qantas has to evolve and of course none of us want Qantas to become a dinosaur. Extinction is not a good option.
I also find myself in agreement (mostly) with Richard Froggatt when he says airlines do not really "care" about wholesalers or retailers and that those businesses really need to make their own way in the world.
We as retailers have the relationship with the client, we as retailers can build on that relationship, manage it properly and move it away from a transactional arrangement to one that is relationship based and driven.
Then we (as retailers) choose who/what we offer to our clients and our customers. Not driven by preferred relationships, or huge head office structures of major groups but by what really matters - what is best for the client.
To that end we will deal with suppliers and industry partners who provide us with service, support and the structure to provide our clients with the exceptional service that they require.
I also find myself in agreement with Skroo Turner in his comments about airlines, consumer protection and the TCF.
It is time that airlines were bought under control and into the fold of consumer protection. We as travel agents and our partner wholesalers and tour operators have carried the burden of consumer protection and the associated costs for 20+ years and in that time the biggest crashes, the most costly collapses have been airlines who have had no requirement to be members of the TCF and to protect their client's funds.
Peter Watson
director/general Manager
Travel Counsellors
Editor,
There is a very simple solution to the situation to the commission problem. Airlines claim it comes at a heavy cost to them. Airlines should price their seats at what they need to cover their costs and make a profit for their shareholders. Then mark it up nine per cent. That way Travel Agents get nine per cent commission and if a customer books direct the airlines makes an extra nine per cent.
I guess this solution is too simple for airlines.
Rodney Pattison
group managing director
Travel Central, Oatley, NSW
Editor,
Qantas forget that they treat agents badly - firstly, they release airfares on the website that we did not have access to, secondly, the cut our commissions and were one of the first internationally to cut us down, thirdly, we have to collect their taxes for no recompense - they actively compete against us.
Phil Hoffman's comments were long overdue as we have been beaten up for the last 5 years - yes the web is here but it doesn't mean we have to actively compete against each other for business - they should be taking steps to assist us and encourage the industry.
The major chains keep friendly with qantas so they get their overrides - everyone is friendly because currently qantas has a loyal following that mainly seems to come from their frequent flyer programme - once this goes, let's see how much support they have.
Susan Kerr
Director
The Travel Store, Collingwood, Vic.
Editor,
The comments by Qantas' John Borghetti (Travel Today, July 4) make me laugh. John, let's just get a few things straight.
You are the national carrier so the Australian trade has no option but to deal with you. But as you can see from your rapidly dropping international market share where we have a choice and we're exercising our rights not to deal with you.
We're very happy you've embraced the internet - it has allowed us to concentrate on higher yield bookings rather than domestic point to point
We have no problem with you selling direct, you'd be stupid if you didn't. The thing I, and the rest of the industry, object to, is that you decided to give every person walking down the street the same buying power as us. At that time our QF sales were $2 million per year. The wholesale/retail pricing principal works well in almost every industry. Can you imagine the uproar from bottle shops if wineries were to sell at wholesale prices at the cellar door? What would Harvey Norman and JB Hi-Fi say if Sony sold their TVs at wholesale prices to every punter on the web?
The incompetence of the world's airlines in going down this path is incredible. We understand the need to modernise and adapt to changing market conditions but you've done so by destroying your relationships with your biggest customers and industry partners. And yet you gloat at being the last national carrier to make this decision. It sounds to me that you're gloating at being the last lemming to jump off the cliff rather than the first!
Our own wholesale division, Bunnik Tours, sells direct and will always continue to do so. However we would never dream of trying to undercut one of our agency partners by selling cheaper to a client direct. Our relationships are built on respect. Needless to say we're not selling much Qantas these days…..and I assume I'm now permanently off your Christmas card list!
Dennis Bunnik
general manager
Bunnik Travel and Bunnik Tours, Adelaide
TOPIC: READERS REACT TO THE MOVE BY CHINA SPECIALIST TRAVMAN TOURS TO WRITE TO EVERY AGENT IN AUSTRALIA OFFERING PREFERRED DEALS AFTER BEING OVERLOOKED BY EVERY NETWORK HEAD OFFICE (Travel Today, July 1, 2008)
Editor,
I share in Travman Tours' brick wall and sore head story (Travel Today, July 1). We have offered better than 15% commission to agents, plus overrides to some chains for preferred supplier status, and still been knocked back. Our 2008/09 brochure went out to 800 agents in March (didn't bother with the big boys), and to follow up I personally called all 800 to introduce myself, check that the brochure had been received, and to reiterate the commission we were offering, in case they missed this point when they received the season launch flier. The response was not overwhelming. Perhaps the agents found the personalised approach a little too . . . personal?
We want partners in the industry who care about the service they provide and the experience their clients end up having - but rarely do I get the sense that this passion is a sentiment that is widely shared in the industry.
Lincoln Harris
India Unbound
TOPIC: READERS RESPOND TO FORMER LAUDA AIR AUSTRALIA BOSS RICHARD FROGGATT’S VIEW THAT AIRLINES DO NOT NEED WHOLESALERS (Travel Today, June 26, 2008)
Editor,
As much as it pains me to agree with Richard Froggatt, (Travel Today, June 26), he is absolutely right when he states that airlines do not need wholesalers. Discover Asia scrapped packaging up land and air many years ago and concentrated on what we do best – operate land tours. By including air we are limiting a package’s dates of operation and appeal to the consumer who may have alternative ‘loyalty scheme’ preferences. Most retail chains have as good a deal as the wholesalers nowadays and from a personal standpoint, for the $50 mark-up that I could put on an air fare - I would prefer that the retailer had the hassle of talking to the airlines.
If there is going to be a change to a tour, it is normally the air segment that causes the problem, with availability issues and change of class etc.If an airline wants to coordinate a promotional campaign with a wholesaler, that is great, but it will always be the airline’s initiative.
Putting extra steps (and profit margins) into the supply chain is senseless. Wholesalers cannot ‘add’ to the service side of air – we are just putting one more impediment between the consumer and the airline. As a wholesaler, I can create land arrangements that no-one else can offer or match… when I add an airline, I am selling exactly the same seat as everyone else – so where is the value-added?
On the other hand – if a client wants to book 2 nights in a Singapore hotel over the internet, why should the travel agent get uptight? It probably is cheaper for the client, the commission on such a deal would not even pay for the consultant’s time, there is very little ‘talent’ needed and once again – where is the ‘value-added’ from the agent?
Agents, airlines and wholesalers should stick to what they do best… and the only time they should meet – is in a bar!
Trevor Lake
managing director
Discover Asia
TOPIC: READERS RESPOND TO COMMENTS BY PHIL HOFFMAN THAT PRINCIPALS ARE INCREASINGLY TRYING TO BYPASS THE TRADE (Travel Today, June 26, 2008)
Editor,
Just a quick thought re the airlines trying to go direct and remove the current distribution system called the “Travel Agent”.
I will happily stand corrected regarding the figures but the general thought process is correct.
Say there are 4800 travel agents in Australia with say each agent employing an average of five consultants. That is a total of 24,000 hard working, very busy, person-to-person consulting staff.
Do the airlines honestly think they can replace all these people and the service they offer to the airlines at a lower cost base than the meagre commission levels they pay their current distribution system?
I would truly like to know if the airlines have done the cost analysis comparison between having to employ more help desk staff, consultants and IT personnel versus current commission payments.
Are you aware of any other industry where the principle is in direct competition to its distribution system? As my background is the building industry I just can’t imagine Boral trying to sell cement or timber directly to the public and not through some form of building supplier/ hardware store
Edwin Spencer
Director
Spencer Travel, Surry Hills NSW
Editor,
If an airline is happy to fill a plane from the "front to the back" then they certainly don't need us wholesalers to fill the plane from the "back to the front" - there are many more seats at the pointy end...aren't there?
Kind regards,
insignificant and unnecessary (Nick Deacock, Garuda Orient Holidays)
Editor,
A big thank you to ANZCRO, who printed the AFTA slogan “without a travel agent you’re on your own” on the back of their brochure, plus the referral to the local agent.
It is heartwarming to see a bit of the old culture still around in an environment where wholesalers are only too happy to approach customers directly after having the got the details from an agent in the first place.
I could not agree more with Phil Hoffmann. Customers, particularly the higher end of the market, do enjoy the personal, face to face service a good agent provides and I doubt that will change too quickly.
Barbara O'Rourke
Manager/owner
Gippsland Global Travel Company, Korumburra, Vic
Editor,
Honeymoon Worldwide Holidays commenced trading nine years ago this September as there was a need for a honeymoon specialist in the market. We are seeing a major trend for agents to go directly to hotels and airlines selling their airfares directly to the retail travel market rather using the wholesale airfares. We have resisted for many years to go direct to the public and we will continue to do so. But as Phil Hoffmann said in yesterday’s Travel Today, this will have to be a partnership between retail and wholesale otherwise more and more wholesalers will have no alternative but to go direct to the public.
Jean Kouriel
managing director
The World Travel Group (Honeymoon Worldwide Holidays), Petersham, NSW
TOPIC: READERS RESPOND TO CARNIVAL AUSTRALIA CHIEF EXECUTIVE ANN SHERRY’S CLAIM THAT THE INDUSTRY IS NOT DOING ENOUGH TO ATTRACT A YOUNGER CLIENTELE (Travel Today, June 24, 2008)
Editor,
If Ann Sherry wants to know about attracting the younger age group to cruising she should look "Back to the Future". In the 1970s and 1980s Sitmar's Fairstar out of Sydney had mainly younger people cruising. That ship had six berth and four berth cabins which made it a cost effective holiday for young people. Security and drugs were not the issue they seem to pose these days.Today's gen X and gen Y might be different but at that age "money" is usually an issue. Like the airlines have cut out food maybe they should look excluding "eternal gorging" as part of the food system on ships - cheap fare, pay for the food as you need it.
Wendy McCafferty,
Tourism Department
Gold Coast Institute of TAFE
Editor,
I'm a domestic consultant with Harvey World Travel in Cairns. I am 18 and have an idea to attract more young people to cruising.
I think the most important thing is price. Young people don't get paid much and when they want to go on a holiday, they try and do it cheap.
The next thing is getting more for your money. If I was looking to do a cruise I would consider one that visited capital or large cities. Cities are where young people want to go and where the action is! It would be great for a cruise to visit Brisbane, Sydney, Melbourne, Perth, and instead of a day stop, have two days, to give people the chance to go clubbing and shopping. It will also benefit older passengers by giving them a chance to see the cities in depth.
Maybe even think about having a short cruise targeting only a specific age range. There is nothing better than knowing you are going on a cruise with only your age range.
Melissa Scrivener
travel consultant,
Harvey World Travel Edgehill, Queensland
Editor,
The cruise industry can hardly attract young people because today's youth get easily bored. Short destination cruises are more likely to attract young people because they are cheaper and not so time consuming. Cruise advertisements are not enticing enough as they show more seniors than young people. Stop being coy about it. Whether you like it or not young people are attracted to cruises that show fun and adventure - show more young skin in advertisements.
Cruise companies are not imaginative and inventive when it comes to promoting to young people. Young people spend so much time browsing on line. They enjoy youtube as it presents short videos, a shining testament to their short attention span. Cruise companies should do their own youtube like creating their own 'you cruise' and ask young people to post their cruise videos.
Sting Pilapil
DeVere Hotel, Sydney
TOPIC: SHOULD AGENTS BE CHARGED NO-SHOW FEES FOR NON-ATTENDANCE AT ROADSHOWS AND EXPOS (Travel Today, February 20, 2008)
Editor,
I certainly agree with the charging of "no show" fees. When a travel agent rings up and books x number of places at one of these events, they are in effect making a contract with the event organiser, who then proceeds in good faith to make arrangements and outlay expenses based on the commitment made by the travel agent. For the event organiser to then charge for a "no show" is an entirely reasonable action to recoup expenses.
We normally travel a 270km round trip to attend these events in Melbourne, and at last night's Bali Roadshow, there were two young travel agents who had driven all the way down from Shepparton for it, and were driving back again afterwards. So, city-based travel agents who "no show' don't have much excuse.
Shayne Doyle
Travelscene Castlemaine
Editor,
It is always the same. For years and years travel agents were good enough to book the product for Wholesalers.
Now we are kicked in the groin, after many years of loyalty, to save a few dollars.
The advertising campaign from the wholesalers must cost almost as much as paying commission. So why bite the hand that was feeding them?
Holger Homann
Senior Cruise Consultant
Travelscene American Express
Editor,
Yes most definitely. Especially after the expense the organisers have gone to. There should be exemptions ‘though.
Eg Stuck at work dealing with a client emergency, PA doing last minute bookings etc.
Jill Wilkinson
The Travel Authority
Editor,
What an ungrateful lot of people. I am a Travel Agent in the country – 4 hours from Melbourne and would love to have the opportunity to attend these evenings given the opportunity. Our agency staff travel to Echuca or Bendigo (2 hours one way/ 4 hours return) whenever there is an information evening which I know is appreciated by the organizers as much as we appreciate the knowledge gained from these events. May be they wont know what they’ve got until it’s gone!
Kaye Mitchell
Sun Centre Travel and Holidays
Editor,
I think fining could be problematic and is sure to generate ill--will against the exhibitors.
But, if the organisers (not the exhibitors) were to publish a list of offenders, that would have more effect.
Rod Eime
traveloscopy.com
Editor,
Bentours have 200 RSVPs for our first ever Cruise Expo on Tuesday! Our last event in Sydney, the ABBA Launch in November attracted 150 agents and we received 29 no-shows or regrets. But you would be amazed how many made the effort to come back to us on the day letting us know that they wouldn’t be able to make it!
Teresia Fors
Bentours International / MyPlanet Australia
Editor,
Agents should never be charged no-show fees. In the past we use to enjoy going to road shows but the few that I have attended recently do not interest me anymore. Road show organizers have put so much emphasis on websites and machines and now lack people skills.
Mereani Niuqila
Fiji & Pacific Holidays
Editor,
Working with the travel industry -- but being neither an agent or a wholesaler -- I have a different perspective.
Instead of penalising agents for not turning up, why not charge the agents $50 in advance to attend -- and give them twice that value in terms of marketing tools or resources for turning up.
Or, perhaps, extra commission on their next booking that returns them more than the cost of the event. How about an agent "certification" they can use publicly to demonstrate their expertise to clients, part of which involves attendance at the roadshow/briefing?.
I've seen that "reward" approach work outside the industry. Paying up front helps cement the commitment to attend. The reward means the agent can easily justify the cost because they're getting more back from the wholesaler than they paid. The wholesaler gets serious agents who are prepared then to go back to the agency and actively seek extra sales of the product because they have a financial incentive to do so. The agents and wholesalers build their relationship and both win.
A no-show fee to me doesn't build the relationship with the agents -- and doesn't appear to offer any reward for the agents who attend.
Dean Kennedy
DMK Business Systems Pty Ltd
Editor,
I agree, something needs to be done, so many agents just don’t turn up and it’s rude, especially if some people miss out on going as the function is full, then people no-show.
On the other hand, maybe a suggestion could be made that there is a mobile or some other contact in the last two days, so that if you really can’t make it for a reasonable reason, then you could contact the wholesaler or show and let them know. I know they may still be charged, but they may also be able to pull someone off the waiting list.
It’s happened to me, a migraine at the end of the day, unsafe to drive and no other way to get there, and I can’t tell anyone as there’s no emergency contact number on the invite, and ringing sales or res doesn’t help…
Diana Leavis
Travel Escapes
Editor,
As a Travel and Tourism Teacher of Retail Travel students I often try to include my students in Industry functions and events. Do to our large class sizes (25-35) I have difficulty gaining entry – even when I suggest just to take a small group. If accepted we would attend – it would not be an option! Maybe organisers could work on a certain % of ‘no=shows’ and top attendee numbers up with students..??
Maybe if I could respond direct to the organiser, rather than via an electronic response that does not allow any discussion, I would be able to gain entry for keen young students to attend and possibly even assist in the set up etc of the event.
How can I involve my Retail Travel students in more of these events as they are currently not practising ‘real life’ Travel Agents?
Sue Andrikidis
Teacher - Travel and Tourism
TAFE NSW, Ultimo College
TOPIC: AUSTRALIA SIGNS OPEN SKIES DEAL WITH THE US (Travel Today, February 18, 2008)
Editor,
The signing of open skies agreement between the Australian Govt and US is
Definitely a very positive step. In order to protect the Australian interests the Govt. should allow fully owned and operated Australian companies to operate on this route. V-Australia has certainly given a wake-up call to other carriers operating on this route.
A very vast percentage of travelers are waiting for the opportunity to fly to US using very economical fares.
It is heartening to see it become a reality.
Pradeep ( Bobby) Bhatnagar
TravelManagers
Editor,
Hopefully, V Australia, will not make the same mistakes as Qantas when comes to servicing Brisbane. Qantas is still trying to use Sydney as a hub for its international flights and for most Brisbane people, adding another 5 hours, going in the wrong direction (via Sydney ) to a 10, 14 or 24 flight is an absolute no-no. This is why the newcomers are killing Qantas, out of Brisbane.
Also, it is worth keeping in mind that a recent survey found that 57% of Australians getting off planes in LA, do not have LA as their prime destination. If your prime destination is Canada or Mexico, the last thing you want to do is have the horrible experience of going through US customs in LA.
Thus, I believe, it would be well worthwhile for V Australia to consider other ports in North America, such as Vancouver, Mexico City and Cancun as well as the US ports they have in mind.
Derry Weis
Pulse Energy
Editor,
It’s good news in principle that there will be more competition between Australia and the USA, let’s just hope that V Australia will see beyond Sydney and look to fly from Melbourne as well.
Surely there’s enough demand? We field many queries from our clients regarding the lack of choice on the direct services.
Peter Scott
Director
Jetset Belgrave
TOPIC: CATO – WHOLESALERS SUPPORT SHOULD BE RECOGNISED (Travel Today, November 29)
Editor,
I agree that many wholesalers are providing much support to the retail industry. However, as has been said many times before by many people, wholesalers can't demand agent's support and then actively (sometimes aggressively) promote themselves on a direct basis to the consumer.
Many wholesaler’s brochures contain the website address on every page which deters many agents (me included) from giving out their brochure direct to the client. Many clients think they may “get a better deal direct” and even if they discover they can’t; well, they are already in the wholesaler's website so it’s easier to just follow the booking prompts ... another booking lost by the retailer who has, in all good faith, given out the wholesaler’s brochure.
Other wholesalers may take a more subtle approach.
Simon Hills' own brochure contains words such as: “Icon Holidays plans individual itineraries with our clients (whose clients????” …….and……..“when you book with Icon Holidays, we will plan your holiday experience with you”.
These comments, coupled with the spreading of the wholesaler’s contact details on the back pages, require multiple stickers to cover up the direct contact details.
I'm afraid, Mr Hills, that you are optimistic in believing that any ‘thinking’ travel agents will give out your brochure to clients when you are obviously trying (in an ever so subtle way) to grab the business direct.
I suspect that the first quality wholesaler that works WITH the retail agency network ... or even provides a white label or affiliate website, will enjoy solid support from the retailers. Get off the fence Mr Hills (and others) and demonstrate firmly whether you want a retail or direct sales channel for your business.
Mel Haycock, managing director, Travel Concepts, Milton, Queensland
TOPIC: TOURISM PORTFOLIO ELEVATED TO CABINET (Travel Today, November 30, 2007)
Editor,
Tourism professionals should treat as a welcome development the fact that tourism is being taken seriously enough by the Rudd government to be an inner cabinet role. This is long overdue recognition of the importance of tourism in the national economy.
The time is now right for the tourism part of the Department of Industry, Resources and Tourism to be treated seriously enough to become a ministry on its own right as is the case in most countries in the world. Its time, that tourism at government level ceases being the last letter in DIRT.
The Minister’s suggestion that he does not want to interfere with the day to day workings of Tourism Australia is welcome. We can certainly do without ministers who flog tourism marketing slogans (Where the Bloody Hell Are You) which do not translate into most of the world’s languages, whatever their limited merits may be in English..
Hopefully, Martin Ferguson will consult more widely within the Australian tourism industry that his predecessor Fran Bailey and will encourage his Ministry officials to do likewise. Many governments (including the Australian government) make the perpetual error of assuming that the outbound segment of the industry is irrelevant to them.
Tourism, in common with trade is a two way street.
Let’s hope Mr Ferguson corrects this error.
One thing that I sincerely hope the incoming government will maintain from the previous government is the Smartraveller Advisory Group which has been a good example of co-operation between DFAT (Department of Foreign Affairs and Trade) and relevant travel industry associations on the issue of government travel advisories.
Tourism is a strategically significant industry for Australia and as such it needs to involve a whole of government approach A change of government presents an opportunity to look at tourism policy making with a fresh approach.
David Beirman, director Struan & Associates
TOPIC: DEBATE OVER WHETHER WHOLESALERS SHOULD DROP THEIR PRICES (Travel Today, October 31)
Editor,
The actual reason the wholesalers are not dropping rates is demand is out stripping supply and in general the travelling public has an insatiable demand to spend their cash like never before. Lets even be more honest, agents are not complaining about the situation loudly enough, if at all, as yet?
This is a g-d send for wholesalers as Gerry Harvey said in today's SMH, he is not passing on currency gains either, so the wholesalers do not see a need to stimulate demand in a hot market.
I say good on you guys, let the agents explain why clients can go straight to Hotels and tour companies and enjoy the currency gains directly. Who cares about the agents and their credibility with their clients. Let a Current affair do an expose and let’s see how long this situation lasts?
Ben Caplan
Editor,
Wholesalers are quick to add currency surcharges when our dollar depreciates. Now that they have a windfall they spew a bunch of jargon about currency hedging or whatever which supposedly justifies their need not to decrease brochure prices.
Something doesn't add up here????? If their currency hedging doesn't allow for a decrease (presumably because they got their sums right), then logically, if they got it right there would be no need for a surcharge.
It must be a luxury to add currency surcharges at will and not reciprocate when you have an exchange rate windfall
Frank Perry, Axis Travel
Each wholesaler, depending on the destinations and the currency involved has varying exchange rates to factor in pricing agreements with overseas land operators. In the case of Greece and Mediterranean Travel Centre some of our destinations price their product in US dollars and some in Euros. As The US dollar falls it is increasingly likely that the Euro will become the base currency of choice, especially in the Mediterranean and as most people in business know the exchange rate between the Australian dollar and the Euro has been less volatile than with the US dollar. There is no question that the current AUD-USD exchange is unusually favourable for outbound travellers right now but it would be a brave person who would predict that this will be an unending trend.
In common with many of our competitors, Greece and Mediterranean Travel Centre has released a wide of Early Bird product which represent significant savings on the brochure price of 2008 product. If retail travel agents want to ensure that they and their clients can take advantage of favourable exchange rates then they need to learn how to sell these deals to their clients while they are available.
David Beirman, Marketing Manager, Greece and Mediterranean Travel Centre
One has to wonder how wholesale companies can justify themselves. If the Aussie dollar drops in value within a short time prices are increased so they can recoup the loss. Funny how it doesn’t work the same way in reverse.
Ruth Birtwistle, Travel To Go
In response to Mr Caruso's statement to Travel Daily, I would like to comment that, had research on this matter been more thorough, Mr Caruso would have determined that most wholesalers have progressively been adjusting their exchange rates & pricing throughout the year, as the AUD increased against the USD. This would have happened several times since the beginning of the year, with exchange rates being assessed & tweaked by wholesalers regularly, in an effort to pass savings & exchange rate gains back to the consumer & maintain a competitive market position. These regular forex & pricing adjustments usually happen as a normal course of business & unlike on this occasion, without announcements & fanfare!
It is therefore completely wrong to assume that wholesalers are in a position to make such massive reductions as quoted in the article, simply due to the fact that reductions have already been made progressively throughout the year and what we are seeing here, is simply the latest in a long and continual line of adjustments.
Mr Caruso also ignores the fact that wholesalers must forward contract foreign currency, usually many months in advance, to protect their forward booking position (and thus their clients), in the event the AUD reduces in value. Therefore wholesalers generally may have significant amounts of forward contracted currency, which in the case of a climbing forex market, may well be held at rates substantially lower than current exchange rate levels.
Foreign exchange is of course a very inexact science & sadly, the crystal ball is usually cloudy. With 'experts' at major banking institutions usually unable to accurately predict exchange rate trends & often disagreeing on forward forex trends, tour wholesalers must protect their clients and act prudently, not speculatively on forex, which I believe in most instances happens.
In my dreams I fantasise of Mr Caruso's foreign exchange rate gains of 22%, but unfortunately & like most dreams, this does not eventuate into reality.
Ian Garritt, managing director, Venture Holidays SA/NT & Holiday Connect
I doubt that the AUD could ever inflate at the same rate as Mr Caruso’s ability to generate self publicity.
His assertion that wholesalers purchasing in USD should slash prices by 22 per cent demonstrates his lack of understanding of the travel distribution system.
While wholesalers may have negotiated ground arrangements in USD, airlines in the Australian marketplace require payment in AUD.
Typically air accounts for around 50 per cent of packages (it obviously varies by destination, fare type, accommodation standard etc..)
Mr Caruso also ignores the reality that margin pressure on wholesalers has been building for many years.
The current strength of the AUD will assist them to regain some of the ground they have lost.
But competitive forces are certain to ensure that any windfall gains are in the very short-term with the travel industry’s enthusiasm to see who can sell for less likely to prevail.
Perhaps Mr Caruso, who claims to be a guru of marketing in the travel sector, should have more faith in the marketplace.
Ian Marshman, Tourism Strategies
TA Fastrack chief executive Adrian Caruso (Wholesalers urged to slash prices - Travel Today 31/10/2007) clearly does not understand the complexities involved in managing currency exchange risks. It is not a matter of whether Qantas, Explore or any other wholesaler "negotiated their prices 12 months ago", but when they actually costed their brochures and their corporate policies associated with hedging of exchange risk.
In fact Mr Caruso has totally got the wrong end of the stick. Firstly, since Qantas, Explore etc are now selling the 2008 season, their USD rates would only have been negotiated within the past couple of months or so. Secondly it is a matter of when these wholesalers produced their brochures and struck an exchange rate for the conversion. Thirdly, an important factor will be what hedging policies each company has in place.
Mr Caruso has quoted the National Australia bank that the "Australian dollar is likely to hit US96c by the middle of next year". I receive daily commentaries from the NAB and other financial institutions, and my experience is that whilst each institution makes currency predictions, they invariably have to reassess those predictions when the currency exceeds either their lower or upper limit months in advance of their prediction. In other words they are reacting to the way the market has already moved. The incredibly wide range of currency forecasts from financial institutions actually reveals that none of them have any real idea of where the dollar is headed!
Wholesalers like to keep stable pricing as much as possible, as this is actually beneficial for market stability. It was only 2 months ago, when the panic of the Subprime market scare hit, the AUD lost approximately 13% in 3 weeks and approximately 9.5% in just 1 week, although it has since recovered. Wholesalers do not react to small market fluctuations, because even the smallest wholesalers almost certainly employ some hedging strategy. Presumably Mr Caruso thinks that wholesalers should not hedge at all, in which case the industry would be in a continual state of surcharge and price reduction and the additional work involved for agents would be unbearable.
Hedging itself is not an exact science, and involves cost, but it does bring stability to the market, which I am sure that the general public and most travel agents appreciate. Most clients would prefer to have stable pricing than to have to watch the markets every day to see if their tour cost has increased or decreased. Because wholesalers will be continually taking out hedging contracts at all sorts of different rates, they will also look at their actual currency exposure on a weighted average basis or something similar. In otherwords wholesalers may make a currency profit on some bookings, but this may be offset by a loss on another booking. But it is impossible or at least impractical to hedge 100% of bookings so there will always be some degree of risk when working with foreign currencies.
Hedging incidently involves a premium (reduction in exchange rate) the longer the hedging contract is valid for. Then of course most banks require collateral of up to 20%. This may be OK for large wholesalers such as those mentioned above, but for small and medium wholesalers this could mean several hundreds of thousands or even a couple of million dollars secured against personal bricks and mortar. Still it keeps prices stable!
Our own company, African Wildlife Safaris and Natural Focus Safaris has been passing on the benefit of reduced prices for our products in Africa, India, Nepal, Sri Lanka, Bhutan, Antarctica and South America and will continue to do so. Our brochure prices have been discounted by as much as 10% depending on when they were costed and based on hedging contracts in place.
Probably for the last 2-3 years our brochure prices have actually only been an indication of the rates charged and each new quotation is based on current exchange rates. Because our company pursues a policy of hedging USD liabilities, new bookings will always be done at the best possible rate and hedging contracts reduce but do not eliminate the need for AUD price fluctuations.
Stephen Cameron, African Wildlife Safaris
Over the past few weeks we have been changing our FX rates on an almost daily basis, to ensure our customers, the travel agent, are given every opportunity to provide their client with a competitive quote. We feel this is so very important, as with so much media attention being given to the AUD/USD rate, it must surely be urging consumers to be extra vigilant with prices quoted by their travel agent. As a wholesaler, it’s very simple, if the travel agent cannot secure the business, nor can we.
Jo Pettifer, General Manager – Product
I agree, they should drop their prices more than the 9% they have already
Fiona Blizzard, Roberts Travel Senior Consultant
TOPIC: HWT FRANCHISE COUNCIL CONSIDERS OPT-OUT (from Travel Today, October 8)
There must surely be a groundswell of opposition by agents against those airlines that have shown such disdain for the industry that has supported them for so long. In particular I am incensed when I hear that we should simply accept the move towards nil commissions, that it will certainly come, and that we should replace legitimate profit margins with service fees.
We do, and if selling air travel was as simple as selling a theatre ticket perhaps that would be enough. But it is not that simple, it is not enough, and as retailers we must work with a margin.
In my relatively short time (five years) as an agency principal I have been astonished by the manoeuvres taken to reduce and avoid paying airline commissions. It is all so laughably short-sighted that I wonder whether airlines are being run by politicians.
It needs to be said that travel agents deliver a service of real value to travellers, particularly to overseas travellers, and they deserve fair remuneration.
Many agents are, like me, waiting for our industry to put its dentures in and take a strong public stand promoting the professionalism and the benefits delivered by the retail travel industry.
Martin Fallows, managing director, Travel Choice Pty Limited, Mosman
Neither Stella nor the HWT Franchise Council has any right to decide whether I will opt in or out of the QF class action. The fuel surcharge was supposedly introduced as a temporary measure and has now become a permanent means for airlines to avoid paying agents commission. If we all opt out then we are agreeing to QF etc ripping us off forever.
Adele Mitchel principal, Harvey World Travel (St Ives)
What is the ACCC doing about the way Qantas is pressuring groups such as HWT to opt-out of the taxes class option?
Surely this sort of bullying and potentially blackmailing practice is prohibited by the Trade Practices Act?
Stephen Cameron, African Wildlife Safaris
Harvey World agents need to grow some balls. The Stella group is of sufficient size that QF needs it as much as they need Qantas. Also, taking into account the minimal commission airlines like QF are paying, one has to question why all the fuss. If you want to be treated with respect you must earn it first and I can assure you that it won’t be earned by rolling over.
HW agents are delusional if they think QF will, in the medium term, treat them any better because they opt-out. Is it that they feel they must beg the airlines for a living because they lack the skills to create one for themselves?
With this case going to court, it may well be the catalyst for change: ie: restrict these IATA carriers’ commercial dealings with each other that in my view is nothing short of collusion. Where else can a group of competitors have meetings behind closed doors (no independent observers) on the basis that they are only to discuss their interline agreements – YEAH RIGHT!!!
It’s important that all travel agent groups and independents stick together which will negate any bully-boy tactics by the airline. If QF is unsuccessful in dividing some of the travel agents and/or groups, they are then stuck in the position of having to deal with all travel agents the same. If they try and make an example of any particular group then I say “two can play at that game”: ie: collectively we travel agents give them a taste of their own medicine.
My last passing shot is – Who the hell does QF think it is? May be it’s about time travel agents started treating QF with the same contempt they treat us.
Geoff Bouterey, Travel Masters Ltd, Sydenham, Christchurch, New Zealand
TOPIC: QANTAS OFFERS RETAIL DEALS ON CONDITION AGENTS WITHDARW FROM FUEL SURCHARGE CLASS ACTION (from Travel Today, September 11, 12, 13)
I note with some interest the dialogue which is taking place regarding Qantas and the reported position it has taken in relation to the commercial dealings with travel agency groups who ‘opt in’ and continue with the class action against Qantas and other airlines.
As a travel agent in practice for more than 40 years, I am fully aware of the power that all our suppliers, not only Qantas have, over the decisions we make daily in the best interests of our business. The decision will be up to each and every individual agent as to whether they want to be part of the class action, and this decision must be taken on commercial grounds. Philosophically it would be great to say that we can be masters of our own destiny, but in reality any industry which still relies very heavily on its income from suppliers, it’s better to be prudent than bullish.
When I look at the amount of money which Travelscene Amex would have for distribution to its members – approximately $550,000, this represents in the vicinity of $1,000 per member and I would suggest that each member derives a benefit from Qantas well in excess of this amount per annum.
Consider this scenario. A client of a travel agent sues the travel agent, but expects the travel agent to continue doing business with them.
My message to my colleagues who want to continue with the class action is, ‘get real’.
Tom Goldman OAM managing Director
In the light of the Fuel Surcharge battle - which will drag on for some time - it is fair to say that airlines have treated agents with contempt for quite a while now.
They have reduced our earning capacity by not only cutting our commissions down to unrealistic levels but also slashed the commissionable portion of the tickets by hundreds, by separating the fuel from the ticket cost. Yet, when agents band together, they threaten to claim back override commissions and the like.
They send customers to their websites to book online, then badger us for not making our allocated budgets and, to boot, charge us to get those same deals through our GDS for a fee! Cheek, Gall, call it what you like.
I have just been at the receiving end of a claim from the administrators of Ansett which I had to pay by the end of last month - or I would be taken to court. Yet, Ansett owed me nine times more than I had to pay out......but I guess that’s just tough .......!Travelworld agent, name and agency supplied but withheld
TOPIC: AGENTS BOOKING DIRECT WITH OVERSEAS SUPPLIERS (from Travel Today, September 5)
Editor,
The current debate between the wholesale operators and some members of the retail travel industry, concerning the agency practice of booking direct with suppliers, highlights the “them and us” mentality that is so prevalent in our industry and so very unhelpful.
As Richard Noon suggests, of course wholesalers add a margin for the services they provide. They run a business that would not be viable otherwise.
However, in return for the fair margin we retain, a wholesaler like Euroscape makes sure that we contract excellent wholesale rates from our trusted suppliers, and offer very competitive rates to our network of Travel Agents in turn. Retail agents acting independently are not necessarily otherwise able to obtain comparable rates.
Euroscape employs European staff members who are experts on their native countries and can offer first-hand advice concerning the merits of properties and packages that are otherwise unknown to the retail agent. We also provide a fully interactive online search and booking facility offering immediate confirmation, quick e-voucher production turnaround, and secure online credit card facilities with the absorption of merchant fees, all without any penalty for last minute bookings. The agent deals with one locally-based online supplier in our case, utilising a website specifically designed for ease of use by the agent. The alternative is to book with myriad online, but offshore, suppliers each providing only a part of their clients’ requirements.
Why would an Australian travel agent want to book directly with such offshore suppliers when this service is available from an Australian-based operator that is a member of the TCF? Will the offshore supplier support them in the event that their clients should claim against them?
What assurance of the quality of the product to be supplied is there? If the agent is booking directly with the offshore supplier simply to match their clients’ price expectations, are they simply not compounding the clients’ often misplaced confidence that the product supplied will meet their expectations? Why not utilise the very specific product and destination expertise that can be provided by a specialist wholesaler?
As to the claim that local wholesalers are actively engaging in direct marketing to the consumers, of course we are anxious to promote our offers and expertise and to encourage the consumers to travel to those destinations in which we specialise. However Euroscape guarantees that 100% of our business is transacted by agents by directing all client enquiries, and all visitors to our website, to nominate their preferred agent before we can proceed to confirmation and documentation.
I trust that these comments are helpful and will help enable both wholesalers and agents alike to continue to work closely together to provide professional service to our mutual clients with fair reward.
Iva Dalco’ Euroscape Travel
Editor,
I was interested to read Simon Hills’ comments in Travel Today on CATO’s concerns about agents booking with offshore operators direct. Simon makes many good points. However, I suspect the practice is less common than Simon suggests, For starters individual agents cannot expect to negotiate deals with inbound operators with any clout unless they have a massive and sustained volume of passengers, which is very rare.
Most importantly there is the issue of client protection. Australian based wholesalers guarantee their product and agents and their clients benefit from the extensive consumer protection which Australian state and federal law guarantee,
In most cases Australian wholesalers negotiate with hotels and the tour operators on specific types of rooms and tours. The cheap rate a agent may get may be for the basement room as opposed to the sea view room a wholesaler gets.
In other words are clients and agents comparing apples with apples or apples with rotten lemons ?
A bigger threat to retail agents and wholesalers alike is the challenge of cyber bookings which are trying to cut both wholesale and retail distribution channels out altogether.
Kind regards
David Beirman, marketing Manager, Greece and Mediterranean Travel Centre
Editor,
In a nutshell - when you can't get prices on products that clients want to book now that is only a few months away, and if you do book through a wholesaler and pay 2-3 months prior and then are constantly chasing documents till a week before the passenger leaves, and then its an e-doc situation with no presentation at all and its left upto us to make it look presentable and its just cost quite a few thousand dollars for the product and there is no-one to talk to from the wholesaler with now a couple of days to go - I would rather go direct and know that all parties are happy and I still end up with e-dox - made my sale and moved onto the next item.
Wholesalers want to wake up to themselves. We have had to change a lot of the ways we deal with business now because of the internet and a more informed clientelle - so should they! Being loyal is one thing & keeping to company based preferred agreements - but I would rather get the booking than miss out altogether. They should try sitting in our offices and dealing with clients' needs and enquiries on a day to day basis. Brochures are now a way for the passengers to know what hotels and resorts etc are negotiated and then go direct! It’s dog eat dog!
REALITY IS BEING QUICK TO FIND A SOLUTION OR MISS OUT ALTOGETHER!
Angi Arathoon, Travelworld Carlingford
Editor,
I am amazed to hear that there so many wholesalers worried about travel agents making direct bookings with hotels, as we have seen a major increase in preferred and non-preferred travel agent bookings in the last 6 months. I also totally agree with travel agents that are outraged at how some wholesalers have been promoting themselves, as wholesalers but going direct to the consumer trying to make either additional dollars or in some instances reducing the rate to compete with the Travel agent. In saying this, we also do some direct advertising but the consumer can take our advertising to any travel agent and make the booking with the agent receiving their full commission.
Honeymoon Worldwide Holidays produced the first honeymoon brochure in September 1999 to help travel agents in a market that was in high demand and we’ve continued down the same path and can’t see it changing in the very near future.
Regards,
Mr. Jean Kouriel, managing Director, The World Travel Group (Honeymoon Worldwide Holidays)
Editor,
Surely this is a reality of the electronic market place. We are in the internet age, any small or large Retailer or Wholesaler would be silly not to explore all means of generating better margins. Let face it, isn’t this what the airlines are doing? This is the real world and people should just get on with going about there business.
Blessings,
Frank Scerri managing director/CEO, Mission Travel Group, Camberwell Vic
Editor,
As a wholesaler of a very wide variety of Asian travel destinations, I would like to make comment on the articles over the last two days.
Yes we do have some direct clients, but we do not actively market this way. As a wholesaler, we do advertise quite widely to promote ‘brand awareness’ – but if our retail customers (for example Susan Kerr) care to look at our ads, they always say ‘See your agent or contact us’. We always promote the retail world and do try to refer those who inquire direct to a local retailer near them.
Re flexibility. We believe we offer the retail agents best of both worlds – off the shelf group tours, private journeys and short stops – all in our brochures and/or our website. But in addition, we at InterAsia pride ourselves on our ability to ‘tailor make’ for specific requirements.
Sure your customers will sometimes be able to book cheaper hotel nights via the web – but what we provide is service and a booking guarantee – what you book and we confirm will be available when your customers arrive! Direct to hotel internet bookings seldom offer the same guarantee.
Dan Nebauer, Director, InterAsia Tours & InterGlobal Tours, Ringwood VIC
Editor,
I have made some excellent relationships with hotels and ground suppliers I use on many occasions.
This ensures that when I have families travelling who need more than one room, the hotel actually knows they are travelling together and will guarantee to me in writing that they have the request.
No wholesalers guarantee this, and when I follow up, more than 90% of hotels, transfer operators, car hire etc have never received a request.
Unfortunately the vast majority of wholesalers are becoming like McDonalds, and are only offering generic product. We as agents find that those who offer more specific and specialised product will have the loyalty of agents.
Creative Holidays is a point in case - they market direct to the public and never refer back to agents. I've contacted them myself directly as a member of the public as was told it was easier for me to book directly with them rather than through a travel agent!
Once wholesalers stop trying to bypass agents and actually work with us and offer product we want to sell they will find that they receive much more support.
Cheers - please don't use my name in print or I'll be in trouble!
Harvey World Travel agent (name and agency withheld)
What no-one is providing to this debate is the consumer perspective where it’s cheaper to go direct because wholesalers add (say) 10% for the agents commission, 5% for themselves and 5% for FX rates. In the end easy internet access, the currency padding avoided by use of one’s own credit card and the fact that the product supplier is in the country being visited (and not back in Australia) will cause an ongoing shift to for consumers to book direct overseas, either online themselves or via their travel agent.
Sure there’s wholesaler value in product selection, perhaps volume buying and niche knowledge, but increasingly as the internet and social groups make the world a smaller place it may not be enough.
At some point wholesalers with large fixed costs around reservation teams, reservation systems and brochure prints will be in danger of imploding. This has already started to happen in the UK.
To think otherwise is head in the sand stuff.
Richard Noon, chief executive, Webjet
Editor,
As a retailer, I have no problem in dealing with a wholesaler who is able to answer a telephone promptly, and confirm bookings quickly when required.
What I will not support is a wholesaler who is in competition with me by selling to the general public, either directly or through a subsidiary retail outlet.
I urge other retailers to check the ownership of wholesalers they use, and cast adrift those who are competing for their clients.
David Kellett, The Cruise Specialists, Brisbane
Editor,
Aren’t we all being taught to be more like “travel brokers” than travel agents? We get very little commission from what we do, so we charge a fee. When you charge the fee you have the responsibility to ensure you are meeting the needs of the client as priority. This very often means booking direct with a hotel for me.
I charge upwards of $400 a planned itinerary for well heeled clients, plus various booking fees. Are you going to tell me I have to tell my client, that they must choose from a tiny brochure collection? Or that “sorry the wholesaler has run out of allotment so you can’t have it?!” when there is a room available direct? (very often at better price and better inclusions). No way!
The consumer is way too travel savvy and smart these days! And as agents have been told over and over again, it’s just the changing nature of the business and you have to change your business model to suit. Ditto the wholesalers.
I would prefer to be earning my 12% from a wholesaler and having all the documents nice and neat and prepaid, but there is too much flexibility online and that is something we need to compete with. If the wholesalers can’t help us do that, we can’t help them.
Kim Ward, managing director, Arjenta travel, Melbourne
Editor,
There's a lot of comment in the travel industry regarding agents going direct to suppliers and wholesalers going direct to clients and suppliers going direct to clients. There is a rule of thumb in business which says that the more competitors you have in a market place, the cheaper a product will be. The internet has effectively exponentially grown the number of competitors in the market place to a point where a consumer is now spoilt for choice.
Those wholesalers or agencies that do not upgrade their technology to be part of this global shop will sadly disappear. The current generation of travellers do a tremendous amount of research online and will book a majority of their travel online. If agencies and wholesaler wish to grab these bookings, they need to provide the service. For those that have access to Hitwise, Zuji and Webjet get a hell of a lot of traffic to their websites as does Expedia.
There is little point complaining about who goes direct to who as at the end of the day, you need to provide a service that the online community will utilise. At a recent conference, Keith Stanley said that Harvey World Travel will effectively provide all their shops with an online presence. They will have the ability to target their local market and specialise. This sort of approach will no doubt increase business through online channels.
It's a an increasingly tough world out there!
Pete McDougall
Editor,
Could it be these are the same wholesalers that undercut the travel agent for the same quote direct to the travel inquirer??I wonder!!
Ted Hani
Editor,
This practice has been forced upon agents by consumers themselves doing comparisons and approaching their agent, but is not as widespread as claimed by Simon Hills, chairman of CATO.
We suggest this story has more to do with scaremongering, designed to protect current agreements by a couple of nervous CATO members feeling the effects of stiff competition and wondering if next year's deal is going to be on the table.
He claims he was "unable to estimate numbers," but in the same breath said " a fair proportion of agents are booking product direct."
That's alot of ifs, woulds, coulds and maybes, Simon.
Most reputable agents are well aware of the pitfalls of doing business direct with overseas operators not represented in Australia.
We have seen one group's newsletter to all members that this practice could be fraught with danger.....not out of fear of depriving a preferred of some business.... but of legal repurcussions of a collapse of an overseas operator not signatory to any agreement.
That’s got to be alot more threatening than a cranky wholesaler going to admin complaining they missed out on a couple of bookings, doesn't it?
Simon Hills may have identified one or two "rogue agents" that booked accommodation or car booking online, but it's hardly a big financial loss to Australian based wholesalers is it....unless they're "on the verge" or not popular with retail chain members anyway ?
Consumers can already book these online, but you have to look at the positive side in that they then consulted their agent to see if they could match or better it.
Use this to your advantage Simon. Join forces and crank up an effective campaign that tells consumers "agents can put things right that go wrong"....but that's not entirely correct either is it?
What about first starting with a large colourful window poster and matching hand-out brochure....unless you already have done it..... but somehow I've missed seeing it.
Richard Hall, Fab Travel Deals
Editor,
Perhaps we are going direct more often because the 'wholesaler's have been direct marketing to our clients so much and setting themselves up in opposition - general public believes you can only book Scenic direct or through Harveyworld now! Just look in the weekend travel sections of our newspapers to see the very heavy direct marketing going on and Intrepid and Peregrine have their own store fronts now with more in the pipeline - can't have it both ways!
Susan Kerr, director, The Travel Store, Collingwood
Editor,
We know the airlines treat agents like cattle class without brains but surely not the wholesalers too !
1. Wholesalers, shipping companies, airlines, car hire, hotels and even consultants take the agency's client details to direct mail and the agency loses clients as a result. Is that not theft of intellectual property?
Often suppliers offer the travel agents commission as a "special price" to the consumer with instructions to book direct. This gives the consumer the feeling that agents are ripping them off, hence the growing distrust in the market place. Agents are treated as a conduit for others to build their data bases.
Suppliers are having a two-way bet, knowing agents are the cheapest form of distribution and getting business direct at the same time.
2. Off shore suppliers do not ask for client details and in most cases are more knowledgable than large wholesalers inexperienced reservation and documentation staff. In addition, prices are net so mark- ups/service fees are substantially better for the agent and client.
3. A matter of survival - at the end of the day we are all in the business to earn an income and in another life there was respect and ethics in doing business - today only a handful can lay claim to that. As the majority of wholesalers have put the cost of documentation onto the agents no one should be receiving less than 12% for any product. 10% commission is not commercially viable.
4. As far as suppliers providing funds for marketing and advertising, take a look at the ads today - they all have direct phone numbers and websites and if you have good eyesight you might occasional find small print that says .... or contact your travel agent. If there were no agents to generate business, wholesalers would still have to do massive advertising to generate business just through one source so its a misnomer to assume marketing funds are all for the benefit of the agents. Agents provide storage and display space in their offices for suppliers for FREE unlike any other commercial retailer.
5. If there are problems with clients bookings, it is generally the agent who sorts it out, mainly due to time differences. Agents these days are 24/7 but not wholesalers. TCF is parochial and past its use by date - the internet is global. With today's price driven consumers, It's time agents took up the slogan "buyer beware".
6. Suppliers are an important part of the travel mix to make it such a vibrant and social industry so they are very necessary but lets have a level playing field and more respect, especially from airlines.
From Out in the paddock
Name and company supplied but withheld
Editor,
Wholesalers need to change with the times. When we get an enquiry for an international hotel for travel in April or May next year and we say we don’t have prices yet, it makes us look pretty silly.
Wholesalers need to become more flexible with their contract arrangements. With technology it seems ridiculous that we don’t have rates past 31 March 08. We also need quicker confirmations. People have less patience and expect more nowadays.
Wholesalers also need to be more flexible when it comes to adhoc requests… many of them are stuck in the dark ages… “we don’t contract that day tour / hotel” or “ sorry we don’t contract the pool villa at that property” or “it’s not loaded in our system yet”. That just doesn’t cut it anymore. Maybe some wholesalers should have a dedicated special requests team, one that could get quick answers and adhoc product when needed??
Agents have evolved a tremendous amount in recent years. We are better at what we do than ever before. Wholesalers need to ask themselves what they are doing different compared to six years ago… from what I can tell, apart from a few web booking engine enhancements, many haven’t changed their business practices one bit..
Preferred arrangements are great and we value them enormously, but at the end of the day we need to keep our clients happy and the client is becoming more and more demanding.
Name ands agency supplied but withheld
Editor,
We can see and agree that it is a growing concern regarding travel agents to bypass wholesalers and inbounders. We are a reasonably size supplier offering a large and diverse range of product. We maintain strong trade relationships and stick to the appropriate commission rates. We also do receive a reasonable amount of direct enquiries from travel agents because we are easy to find on the internet, but we do refer them back to “the chain of command”.
We have found that the main reasons these direct enquires are happening is because they are having trouble finding information from their wholesaler.
Clients are becoming more and more internet savvy, find a product they want to book, go to their travel agent, find that it is not in there system, so the agent goes direct because it is quicker to get a quote and retain the customer from going elsewhere or booking direct themselves. It is a double edged sword and we agree a bit of a problem for the wholesalers.
We do not concur with a particular comment of Mr. Hills “The overseas supplier does not contribute any promotional capital or resource to actively win business,” This is absolute rubbish. We are constantly bombarded for brochure contributions and for the most part, WE CONTRIBUTE, usually for a brochure that we have no say in what we think they should be brochuring. Which is separate to the commission we pay! Isn’t that what paying a commission is for – to actively market our product? We could look at it as double dipping, but we don’t.
James Reeves, marketing and Tour division, Banksia Adventures Pty Ltd
Editor,
As a Jetset agent, we have a strong relationship with suppliers, however it is getting more and more difficult to work with wholesalers when our commissions are reduced, the service provided is sometimes less than ideal, AND we have to print out our own documents, as well as provide ticket covers, document covers etc..
Clients love getting their documents in “official” wallets from suppliers such as Qantas holidays, Tempo Holidays, and cruise suppliers… nowadays, they can be spending $20,000 + on a package, and we have to print all their documents for them, and package it up for them to receive.
Sometimes it is easier to book direct, have 1 page as a confirmation, and put it all together in our own ticket wallets….
It seems we are being squeezed on all sides…
Jenni Marr, manager, Jetset Vermont
Editor,
If travel agents are bypassing wholesalers by booking direct, it is because wholesalers are also doing the same by going direct to the consumers.
As the saying goes, don’t get mad, get even…
Sting, Sydney
Editor,
I can’t speak for all agents as I’m sure there are some who go direct because it’s cheaper, I can say that there are only two reasons I go direct. The first is if there is nothing available on the wholesalers list ie no rooms available or no properties in a location that I am looking for.
The second is my current case, I booked with an Australian Wholesaler in July – 3 nights in Vietnam and 8 in Bangkok for 2 adults, they still can’t confirm the 3 nights in Vietnam, and it’s now 3 months later… so getting an answer a little sooner would be helpful…
Diana Leavis, owner/manager, Travel Escapes, Deagon, Queensland
Editor,
Wholesalers need to ensure that they offer a competitive product, one that is differentiated on cost and/or quality.
If they don't add value, then they should get out of the market. You cannot blame the travel agents for obtaining product at lower cost for their customers.
Geoff Lowry, Datalex Australasia Pty Ltd. Doncaster East, Vic
Editor,
It was interesting reading and I tend to agree with the wholesalers in regards to their concern with direct bookings when they are members of TCF and offer backup.
I will always book here rather than there unless it means I am going to loose a booking because client is aware of the difference in costs.
Remember the web is available to all and the consumer is certainly more knowledgeable now days.
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