Ban the bill-back!

TRAVEL agents could soon see
the end of bill-backs as Fedhasa
considers banning the timeconsuming,
expensive and often risky
practice.
Ceo of Fedhasa, Tshifhiwa
Tshivhengwa, told TNW that the
organisation was pushing its
members to do away with the
process. “We need to ask if billbacks
are still relevant in 2016.
Many of our members are struggling
to get payments. The travel agent
doesn’t get paid and, as a result, the
hotel doesn’t get paid. Hotels are
currently owed millions of rands,”
he says.
“If the industry decides collectively
to do away with bill-backs, we need
to develop an accepted standard
practice,” says Tshifhiwa. He says
consensus would avoid a situation
where some establishments offer billbacks
and others don’t. “We’ll need
to approach financial institutions and
technology providers to explore which
other solutions are available in the
market.”
“Managing bill-backs can be quite
tricky,” says Mike Gray, ceo of
Uniglobe Travel. “Reconciling with
client purchase orders, handling
additional cost items that are not
authorised on the purchase order
and the workload of administration
are some of the core problems
associated with bill-backs.”
“Agencies even have to employ
additional people to handle billbacks,”
says Peter Schoeman,
divisional director, sales and
marketing at City Lodge Hotel Group.
Peter warns, however, that there is
a risk that if the hotel industry stops
bill-backs altogether, the burden will
fall on the travel agency. “Corporates
want a 30-day account to have better
cash flow in their business. It then
becomes a chain reaction with the
supplier sitting with the risk or the
debt. Most agencies don’t have the
cash flow to carry the corporate
debt and still run their agency
successfully.”
Ben Langner, md of Carlson
Wagonlit Travel for South Africa, says
although other payment options are
available, they’ve not been widely
adopted by corporates and don’t
match the convenience of a bill-back
arrangement.
 “Not all travellers in the South
African corporate travel market have
credit cards and providing such
travellers with cash for each trip is
not efficient,” he says.
Claude Vankeirsbilck, chief sales
and marketing officer for Tourvest
Travel Services, says providing credit
cards to employees is often seen as
risky to the corporate.
He says Tourvest employs a virtual
credit card process through its
online travel management solution
to reduce bill-backs. Although it is
successful, Tourvest is a long way off
total elimination of the traditional billback
process, says Claude.
Rachael Penaluna business
manager at Sure Maritime Travel,
says South African travel agents are
afraid they will lose the business if
they refuse client bill-backs.
She says the only way around this
situation is to stop all forms of billing
back. “If travel agents can say the
car-rental companies, hotels and
other suppliers have stopped billbacks,
our clients will have no choice
but to comply.”