GOVERNMENT departments
are going about business as
usual, despite Treasury’s move
to implement a ‘standard
remuneration model’, cutting
rebates, overrides and volumebased
incentives to TMCs from
April 1 (see TNW April 13).
One government official, who
preferred to remain anonymous,
told TNW his department had
contacted National Treasury
requesting more clarity on the new
travel procurement measures but
had failed to receive a response.
“So, it’s business as usual for
now, as even the suppliers are
unsure about which new rates
they should charge us and are
therefore still operating off the
old prices.”
A travel agent, who agreed to
speak on condition of anonymity,
said although government had
negotiated rates with certain
providers, numerous government
departments hadn’t been given
access to these rates. “It’s
all been a bit hurried and
disorganised so far.”
The agent added that
government departments
had been taken as
much by surprise as the
TMCs by Treasury’s new
procurement measures.
“For the various
government officials it
also came as a shock as it
will have a profound impact
on their booking behaviour.
“It has been stipulated,
for instance, that they’ll
now need to book seven
days in advance, whereas
before they were used to
booking travel at very short
notice.”
There is huge uncertainty
surrounding government
travel and the expected
new way of doing
business, says Lance
Smith, executive: sales
of Avis Budget. “Many
travel agency groups are
contacting suppliers to ask
what it means.
“There is zero
commission on car hire in
large contracted business.
Corporate buyers want a
nett rate and that’s how
we deal with things. It’s
been a very transparent
relationship with travel
agents. Now there is
uncertainty being created
in government business.
“Many travel agents’
livelihoods are directly
affected by government
business, whether a
hybrid or other model. The
travel industry will have
to change its business
model,” he says.
Martin Lydall, cco of
Imperial Car Rental,
says the group has
been in discussions with
government to explain carrental
cost drivers, revenue
streams and transactions.
He believes people
will have to think about
their business models
differently: “TMCs will have
to charge a higher service
fee, and then government
can compare service fees
with service fees.
