Future-proof your brand
AS TECHNOLOGY evolves, so too
are the relationships between
travel industry players, leading
some agencies to feel threatened
rather than supported by suppliers.
“There certainly are some suppliers
who target customers directly or work
with various loyalty programmes in the
South African market to gain sales,”
says Sue Garrett, Flight Centre Travel
Group (FCTG) product and marketing
gm. While her group realises there is
a cost to distribution for suppliers,
Sue says preferred partners
understand that FCTG has a strong
sales force of more than 800 sales
experts, driven to support partners
that back the company’s business
model.
Joanne Visagie, sales and marketing
director of Beachcomber Tours, says
suppliers competing with agents by
going direct are a growing problem,
but adds: “We at Beachcomber Tours
don’t take direct bookings but refer
them to the retail travel agencies.
Travel agents have a choice of which
tour operators to use, so hopefully
they understand and appreciate our
loyalty to the retail trade. We see
this as a true partnership and what
a preferred partnership should
stand for.”
Joanne says the company’s loyalty
to travel agents has worked well over
the years but that Beachcomber also
does substantial advertising to the
public. “We draw the public to our
hotels and grow our brand but then
pass these bookings to the retail
travel agents. It’s a win-win situation
and our brand is a strong one that
people request from their travel agent.
Our aim is to assist travel agents to
earn the maximum commission in the
most effective way, not to undercut
them on price and take the bookings
direct. Rather, we work with them in
maximising our business together.”
Undercutting agents
Mladen Lukic, gm of Travel Counsellors
SA, says suppliers will always compete
to some degree. “It is acceptable
for suppliers to have direct dealings
with end users but only when it won’t
disadvantage the travel industry in
any way.”
What is unfair, says Mladen, is
when the industry is disadvantaged,
for example, when pricing on direct
channels is lower. He believes it is the
process of booking travel that should
allow people to distinguish between
going direct or through an agent, and
not the price. “If you want to work with
a partner, you can’t make that partner
more expensive. It’s a temporary win
for suppliers, but works against them
ultimately if they need the industry.”
Travel Counsellors avoids working
with suppliers that have an aggressive
direct policy. Airlines, Mladen explains,
are increasingly guilty of this with their
direct sales channels and the NDC
concept.
Service and choice
Karen Donkin, marketing and
contracting, Serendipity Travel, says
while suppliers going direct has had an
impact, taking a portion of its business
away, the company still considers
suppliers as partners. “If you deliver
good, fast and quality service to your
clients, why would they go direct?
Service plays a big role to retain your
business.”
Similarly, Sue says there has
undoubtedly been a shift in revenue
in the highly commoditised product
space, but that it is not yet significant.
“The cost of driving an enquiry or lead
is far too expensive for many of our
suppliers to replace our distribution
channel entirely. Having a choice of
product or supplier is very important to
our traveller and that is what we offer,”
she says.
The suppliers’ perspective
Kirby Gordon,
vp: sales and
distribution at
FlySafair, calls this
a “complex issue”.
He says: “I can
totally understand
where the trade
is coming from
in this regard
because we are
both supplier and
competitor to the
retail trade in that
we sell direct too.”
He says, however,
that there are two
very different types of consumers,
those who seek to buy direct
(usually online) and those who
still prefer the services, support
and reassurance of dealing with
a travel agent. “We concede that
without providing travel agent
service – which we don’t – there’s
no way we can access the kind
of client who visits a travel agent,
other than to work with travel
agents.” Likewise, he says agents
will struggle to access clients who
prefer to purchase directly from
airlines online. “The dynamic is set
but it’s all about providing the right
fit to meet the client’s needs.”
Without direct sales, Kirby
says FlySafair would not have
a business. “The overwhelming
majority of our tickets are sold by
us directly or through very similar
types of online platforms that
focus on low-margin, light-touch,
high-volume sales methods.”
Lance Smith, executive: sales at
Avis Southern Africa, says travel
agency business remains one of
the most important channels to
the market and that the company
will continue to ensure its travel
partners have the most competitive
offerings. He says the need to
offer direct sales is
driven by customer
demand and is a
global trend led
by the advent
of the Internet,
smartphones and
tablets.
Teresa
Richardson, head
of marketing at The
Travel Corporation
(TTC), says: “We
have put a great
deal of effort in
working with travel
agents and have
a number of initiatives in place
to ensure that we support travel
agents.” She adds that agents
and suppliers have been working
a lot better together in the past
few years due to a growing
understanding between them.
But, she says sometimes clients
do contact TTC directly and want
immediate fulfilment. “Direct sales
are a small portion of our overall
sales. Most consumers who
contact TTC directly are looking for
answers to certain questions they
have about our products, and are
not looking to book directly,” adds
Teresa.
Thaybz Khan, contemporary brand
manager at Cruises International,
believes the retail agent’s largest
competitor is the online sphere
and online consolidators. “Retail
agents lose more clients to online
competition than to suppliers.
Our aim is to ensure we offer
the support travel agents require
to do their jobs.” She adds that
Cruises International has a price
match guarantee to match a quote,
provided it is a like-for-like basis.
According to Thaybz, this is an
attempt to ensure the travel agent
wins the booking.
Agents are the experts
MLADEN Lukic of Travel
Counsellors, says the more
attractive direct channels
become in the long run,
the more frequently
travellers will use them. The
advantage the retail industry
has is the value it can
provide. “The days of agents
being able to book products
the public can’t are in the
past. Now access to product
is ubiquitous, but the overall
outcome will be better with
us. You can build a garage
yourself and go out and buy
all the bits and pieces, but
will the outcome be as good
as if you used an expert?
For some people it will work
but for others it doesn’t.”
Karen Donkin of
Serendipity Travel, says
suppliers expect the retail
agent to support them,
but don’t invest in training
the agent on their product
offerings.
Meanwhile, Flight Centre
Travel Group’s Sue Garrett
says: “The key is to be
selective about with whom
we choose to enter into
preferred supplier contracts
– those suppliers that
are considered platinum
partners for FCTG Africa
certainly do provide
outstanding sales and
training support, coupled
with marketing contributions
to close sales.”
Beachcomber Tours, says
Joanne Visagie, undertakes
travel agent training on a
weekly basis. Lance Smith
says Avis invests in sales
teams and digital platforms
dedicated to training and
supporting travel agents.
With the need to invest
marketing and training
budgets wisely, FlySafair’s
Kirby Gordon says the
low-cost carrier looks at
a metric in each channel
based on how much should
be spent in marketing/
training/communications
per R100 of revenue
received from that channel.
“In the trade space, we are
looking to grow the market
so the amount we spend
per R100 of revenue is
significantly more than our
spend in other channels at
the moment.”
The Travel Corporation,
says Teresa Richardson,
contributes a huge amount
to advertising with its travel
agent partners, offers travel
agent training that includes
online; in-person and
workshops throughout the
year and has a ‘travel agent
first’ programme.
Helping you close
According to Mladen, agents
should not expect suppliers
to seal the deal for them.
“No travel agent should rely
on a supplier to close sales.
If they did, then what would
be the purpose of their
existence – they become a
post office.”
However, he says for
agents to be positioned
as experts they need to
be able to understand a
product, and the availability
of opportunities to
experience a product has
declined over the years.
“Over the past 10 years
or so, agents have lost
a lot of understanding of
products because they don’t
get to travel. There are
people booking flights on
a daily basis who’ve never
been on a plane. Suppliers
need to take cognisance
that product knowledge is
not just about sending a
brochure,” says Mladen.
He adds that it is
impossible to expect every
agent to experience every
hotel and destination and
that technology is needed
to substitute that. That is
why Travel Counsellors is
continually investing
millions to develop its
technology and improve
counsellors’ understanding
of global travel.
According to Kirby, it’s up
to the retailer to win their
client based on the strength
and value of the service
they offer.
“There’s no way we can
discourage a client from
purchasing through one
channel versus another…
what we can and do, is
support the agents as best
we can by ensuring they are
informed about our offers
and that they get great
service from us when they
need us to do something
for them so they can assist
their client.”
First-hand experience
According to Karen, fam
trips are few and far
between. “We try to close
the gap with regular product
knowledge, but nothing can
come close to the agent
experiencing the product
first hand,” she explains.
The impact of the
reduction of fam trips, says
Mladen, can’t be seen
now, but in the long term
will result in consultants
being unable to judge the
right outcome for a holiday.
Agents need a better
understanding of what a
destination, resort or the
like can offer. Alternatively,
the client will question
what an agent can provide
that online sources like
TripAdvisor can’t.
Joanne says: “Humans
enjoy human interaction,
especially when the
exchange is engaging,
helpful, professional and
knowledgeable. There can
be useful storytelling and
personal tips/experiences
to share from travel agents
who’ve experienced a
product first hand.”
FCTG’s brand DNA,
explains Sue, is built around
providing expert travel
advice because agents
are travellers themselves.
Travel experience is a
prerequisite for new recruits
to FCTG, and the brand
drives educationals more
now than ever before. “We
firmly believe that this is a
key element in delivering
on our promise of expert
advice.” She says these
educationals are funded
100% by FCTG.
Teresa highlights that TTC
offers various incentives
and fam trips including the
Trafalgar acclaim trip, which
allows agents to experience
the product “so they know
how to sell it better”.
To assist knowledge
building, Cruises
International offers a cruise
expert programme, which is
an online training platform,
including webinars,
says Thaybz Khan. The
programme is linked to an
incentive giving agents a
chance to win a cabin on a
cruise. Further, it has the
travel agent portal called
Shipmates, an external
sales team and generic
training materials.
Travel agents still on top
BEACHCOMBER Tours’ Joanne
Visagie says agents remain
the preference for most
travellers and that only a small
portion of the public choose
to go via a different channel.
“The public believe the travel
agent will source them the
best deal. Clients have more
options and flexibility with a
travel agent versus a massive
booking engine and there are
fewer ‘catches’.”
The matter of time
Further, Joanne says
Beachcomber has developed
an online reservation
system that allows agents
to get quotes online 24/7.
“Bookings can be made
any time and flights and
accommodation can all be
done online without talking
to our staff. This system
has been exceptionally well
received in the travel industry
and really works. We recently
enhanced it even further with
full mobile device compatibility,
pictures and descriptions of
room categories, and further
improved functionality and
speed.” According to Joanne,
Beachcomber Online drives
travel agents to even better
efficiency and suits those who
work outside office hours.
Teresa Richardson of The
Travel Corporation believes
travel agents should be able
to offer clients immediate
answers and valuable advice
and suggestions. TTC’s online
booking systems for the
trade eliminate any delay in
response, she adds. “When
the consultant has all the
details at their fingertips and
is able to answer questions
on the spot, it’s all very
impressive to the prospective
traveller.”
According to Travel
Counsellors’ Mladen Lukic,
time is not really a deciding
factor for travellers. He
says booking travel is a
long process and that the
perceived value lies in whether
the traveller wants to do it
themselves or get assistance
and a better outcome. While
he adds that price plays a
part and that agents can be
very competitive in saving
clients money, the most value
is matching the outcome they
expect. “An OTA is never going
to provide the ultimate process
because it’s all automated
and subject to the number of
connections they have,” says
Mladen. “An OTA can never
guarantee the best product.
Nothing is personalised –
that’s the biggest difference
between OTAs and us. If a
client needs a quick flight to
Johannesburg, few agents can
improve on that, but good luck
to that client rebooking the
flight online because of bad
weather.”
Lance Smith of Avis, says
to remain relevant and
competitive travel agents
must ensure they continue to
provide relevant information
and services using the
appropriate technology. “We
ensure that exactly the same
value propositions available
to OTAs are made available to
our travel agent partners.”
Meanwhile, Fiona Angelico,
gm domestic sales at
Hertz Rent a Car Southern
Africa, says the continued
development of technology
within the travel industry
is revolutionising the way
travel arrangements are
managed and made. “Retail
travel agents’ commitment
and spend on research and
development will no doubt
ensure their place and
continued growth in the carrental
segment.”
Kirby Gordon of FlySafair,
says no industry can force
customers to purchase in a
way that isn’t comfortable for
them. “If we look at the retail
books market we saw the
likes of Amazon.com in the US
taking over, with the majority
of customers preferring to
get their books online or to
buy ebooks… That said, it’s
not as though there’s no
bricks-and-mortar book retail
industry in the US today – it’s
still a very sizeable industry
because there will always be
people who want to go into
bookstores and browse, and
get the advice of shop owners.
The same is true for retail
agents – there will always be
customers who want to deal
with a person who can advise
them and offer a personal,
bespoke service. That’s the
industry’s strength.”
What the future holds
Serendipity Travel’s Karen
Donkin doesn’t think
retail travel will ever
disappear and things will
look very different in the
next 10 years.
Travel Counsellors
has a particular view
regarding the future of
the retail travel industry.
According to Mladen, the
traditional segmentation
of the industry is already
cracking as the lines
between the different
divisions blur. In future,
he says, there will be
three segments; those
who own products, the
tech environment – which
is the ultimate version of
an OTA in that it satisfies
an end user’s need at the
time and is transaction
fixated – and the third
space where the focus
is on outcomes rather
than the transaction. “It
will be easier for us to
compete once there is
a clear understanding of
what each can achieve.
Travel agents must pick a
space. Now, companies
are trying to be present in
all of these markets.”
Joanne predicts
that it will be tough
to grow profits and
that retail brands will
need to win business
on professionalism,
efficiency, knowledge
and keeping costs to a
minimum. Flight Centre
Travel Group’s Sue
Garrett believes the
future of travel retailers
is brighter than ever.
“With the volatility of the
rand, security breaches
and choice, our market
will seek out experts
to ensure their choice
for their holiday is safe,
secure and selected with
their personal holiday
experiences at the
forefront.” But she adds
that having a blended
approach, offering both
online and offline services,
is critical.
Teresa says consumers
are turning to the travel
agent more than ever before.
“According to various new
studies, even the younger
millennials have discovered
the value of relying on travel
agents. They turn to travel
agents not only to book their
trips, but also for expert
advice on destinations,
accommodation and other
aspects of their trip.”
For Fiona, the future
holds “a seamless travel
experience, supported by
powerful travel management
technology, the growth of
virtual travel assistants,
real-time information
and the creation of a
more personalised travel
experience”.
Kirby says it would be naïve
to deny the continual growth
of ecommerce. “This trend
is going to put pressure on
agents because the offers
will be faster, available day
and night, and probably
cheaper. This is all
facilitated by the fact that
the route to market is digital
without the intervention of
people… but therein lies the
exact benefit of the travel
agent: their service is deep
and personal.”
As an example, Kirby
says if wealthier people are
identified as being willing
to pay for bespoke service,
perhaps travel agents
could cater more for their
needs. “Perhaps agents
will build businesses where
they aggregate bespoke
services around the flight
service being offered by the
airline, like airport valets
who guide clients through
check-in and take them to
the lounges. Maybe they
move out of their offices and
rather go and consult with
their clients at the client’s
home or office, like we see
private bankers now doing.
Whatever the outcome, the
key is always going to lie in
understanding the client and
the specific things that those
clients appreciate about
their service. The winners
will be those who build
innovatively on that benefit,”
he comments.
Case study: Long live bricks-and-mortar!
A FEW years ago, global
travel experts predicted
that ‘high-street’ travel
agencies were nearing
extinction. But this
prediction is not unique to
the travel industry.
Last year, much was
reported about the ‘retail
apocalypse’ – the death of
bricks-and-mortar stores in
the digital age. The trend
of retail stores of all types
closing down started in
the US in 2010 and many
have predicted the same
fate for travel agencies.
Interesting then, that
some businesses that
were born online are
investing in bricks-andmortar
stores. Locally,
kitchen and homeware
shopping group Yuppiechef
has done just that by
opening two stores in
Cape Town with a third on
the way.
“We believe the future
of retail is omnichannel,”
says Andrew Smith,
Yuppiechef md and
co-founder. Andrew
says that among many
reasons, the company
was influenced by the
insight that it’s not a
choice between online
and offline, but about
offering the best of both.
“Customers won’t see
Yuppiechef as an online
retailer or a physical
store. In their minds we
are a single retail brand
and they want to interact
with us on their terms,
whenever and wherever
they are.”
He adds that, for many
South Africans, setting
foot in stores is a
favourite pastime. “Online
is still only about 2% of
retail in SA. That is partly
because there haven’t
been good places to shop
online, but also because
people like the physical
shopping experience
– browsing, getting
advice, the immediacy
of purchase, seeing and
being seen,” says Andrew.
Yuppiechef put some
“non-negotiable”
principles in place
including pricing and
specials always being
the same online and
in stores. It has also
integrated online customer
reviews into in-store
price labels as well as
scannable QR codes to
access more product
information. Andrew says
a physical store offers
customers the ability to
touch and feel products
but, most importantly, lets
them talk to someone in
person to get advice and
guidance. “We place a
great deal of importance
on employing store
assistants who not only
are friendly and helpful,
but also have a huge
passion for cooking and
the tools that we sell,”
says Andrew.
Karen Donkin of
Serendipity Travel, says
physical stores and an
online presence cater
for different clients. “You
still get those clients who
choose to come in and
see you, versus those who
are happy to transact via
telephone and email.”
Sue Garrett of Flight
Centre Travel Group,
says when investing in
a holiday, the majority
of South Africans want
to deal with a person.
“A holiday is a big
investment, and very often
a first-time experience for
many South Africans, and
being able to ask advice,
gain insider tips and
the feeling of security is
critical in our market.
“Due to our large
footprint across SA, we
offer this as a massive
point of difference
[compared to an OTA],”
adds Sue.
News Flash!
BidTravel has acquired Lloyds Travel in Bryanston,
Johannesburg. Commenting on the purchase, Lidia Folli,
BidTravel ceo, said: “Harvey World Travel – Lloyds Travel is a
very successful and well-established agency which has been
operating for the last 20 years from the Bryanston Shopping
Centre. BidTravel and Harvey World Travel are very excited to
welcome the management and staff on board and look forward
to the future success of the brand.”
Photocap: Flight Centre claims for a cause
Flight Centre Travel Group (FCTG) staff
will climb Kilimanjaro in March next
year to raise funds for a worthy cause.
The Flight Centre Foundation is a
registered NPC and PBO with the main
focus of providing education. Projects
include an ECD (early childhood
development) centre and a school
in Diepkloof, Soweto. In addition to
the support the foundation gets from
FCTG, it runs a number of fundraising
events, the largest of which will be
the 25 people climbing Kilimanjaro
to raise money to build a school
library. Other fundraisers coming
up are a Barnyard Theatre event
on October 25, a golf day on
November 15 and a cycling event
on November 24. For more info on
these events, contact Diane at diane.
cleary@flightcentre.co.za. Pictured:
Nicolle Hope from Flight Centre UK
interacting with the children at the
foundation’s school in Soweto.
