Travel agents are increasingly being forced to compete with banks, as financial institutions expand into the travel space with flights discounts and loyalty-linked travel benefits.
With banks like Standard Bank offering up to 40% discounts on flights, agents believe that the two industries should be separated. “I have no idea why banks feel it is necessary for them to get involved in an industry they don’t understand. Clients basically book their trips with no assistance and guidance,” said Debbie Joubert, MD of Sure Travel 24-7.
Glenda Ingram, Owner of West Beach Travel, believes that banks and agents should stick to what they know. “Banks should not be in the travel industry and we should not be involved in what the banks are offering – we are professionals on our own. Banks discounting travel like that gives the impression that this industry is not professional,” said Ingram.
Losing clients
Agents say banks are becoming direct competitors, with some reporting lost business as a result. “From my side, yes we are losing clients, however I try to explain to them that the discounts are only on the airfare portion, which in some cases is less than 30-50% of the cost of the actual ticket, so how much are you really saving for handling something almost entirely alone and having no one to turn to when things go wrong after-hours,” said Joubert.
She recalled an incident involving a client who booked via Discovery Limited to access discounts. The family travelled via London, with parents holding UK passports while the children had South African passports and no UK transit visas.
“I found out they booked with Discovery due to the great discounts, so I reminded them that they offer great discounts but no knowledge and no after-hours service in an emergency.”
She said it ended up costing them, as their application for a refund was rejected. “Travellers will always find a cheaper way of doing things, even when ‘cheaper’ ends up costing you double,” she said.
Agents step back
Agents say they do not get involved in booking through the banks. “There will be some agents that might decide that getting a card with a particular bank, if the bank allows, will be an option but it is not worth the stress of trying to solve a problem when you are a third party and the airlines won’t deal with you. I don’t offer to get involved because when something does go wrong, the onus will fall on the agent,” said Joubert.
A different value proposition
Ingram and Joubert believe that agents can still play a valuable role that sets them apart from banks.
“When people are cash strapped, they just go with the cheapest. The DIY travellers will book with the bank; the person who wants to deal with a professional will contact a professional agent,” said Ingram.
Joubert hopes that regular travellers will notice the benefits of travel agents. “I am hoping that clients who travel regularly will realise that booking through the bank without support when problems arise makes the small savings not worth the risk.”
However, she said the current skills gap could present an issue in the future. “Professional travel agents with many years of experience and loyal client bases will survive. However, our industry faces a significant skills gap and I believe we have effectively lost around 15 years’ worth of knowledge. This loss will inevitably catch up with us,” said Joubert.
