Relationships will strengthen
CHANGES to supplier
deals have had a major
impact on the travel
industry and are expected to
continue to change the travel
landscape in the year ahead.
In general, advances
in technology, combined
with the fragile economy,
the weak rand and weak
demand will have an effect
on supplier relationships this
year, predicts Sue Garrett,
gm Marketing and Product
for Flight Centre South
Africa. She says, however,
that it is too early to see
if 2016 is the year that
this relationship changes
radically.
She says all suppliers,
not just those in the travel
industry, are reviewing and
reassessing their deals
in the current economic
conditions. “Everyone is
looking for potential new
markets, new customers
and new systems or
technologies that will provide
opportunities this year and
going forward.”
It will be interesting to
see how supplier deals will
evolve in 2016, says Andrew
Stark, Flight Centre ceo.
“Will suppliers still expect
growth as the market is
declining? Or, are they going
to look at keeping their
percentage of market share
and be happy with that?”
Franz Von Wielligh, gm
of Flight Specials, says in
some cases, suppliers have
started doubling targets on
previous agreements, as
pre-set targets are almost
a given due to the rand’s
depreciation. “More and
more supplier deals are
being based on growth and
increased passenger count,
instead of a tier-based target
deal.”
Seeing an increase of
growth in the travel market
this year is doubtful,
according to Annemarie
Lexow, sales and marketing
manager for TravelVision.
“Many of our suppliers
have indicated that they are
holding their rates the same
as the year before and in
some destinations they have
even reduced their rates.”
The industry as a whole
has come under pressure
as a result of the pressure
on the rand, agrees Cathie
Bester, national sales
manager for World Leisure
Holidays. “We would all like
to see business growth
with our partners, but at
the same time at WLH we
are realistic and, where
necessary, we will review
agreements in consultation
with partners to ensure that
we are both in a win-win
situation,” she says.
However, Deolinda da
Silva, finance and operations
manager for kulula holidays,
says she is expecting growth
in 2016, as the year has
started well. “The rand
seems to have stabilised in
February and South African
travellers have proved that
they are very resilient to
currency changes.”
She says kulula holidays
would rather support the
agencies that are showing
growing numbers of bookings
with kulula holidays rather
than offer deals to agents
who have multiple interests
and contracts.
Checkout Tours on the
other hand says it has
increased its upfront
commissions to nonpreferred
partners to attract
more support from them.
Director, Giles Clinton says
the operator is enjoying
steady growth and that
its database of agents is
expanding.
Dreams also expects
growth in domestic product
in the next 12 months, says
Stacey Barnett, sales and
marketing manager. However,
she says the company will
review contracts based on
current economic trends.
Beachcomber expects
inflationary growth only,
says Joanne Visagie, sales
and marketing manager
for Beachcomber Tours,
although she believes its
Mauritius business will
continue to grow as costs
in Europe, the US and
Australia are high for South
African travellers. “There is a
preference towards a holiday
where they can purchase
fully inclusive packages and
budget accurately for their
holiday,” she says.
Deals are under review
Although growth is key to
sustainability in any industry,
Noorjehan Vadachia, sales
and marketing director at
Avoca Travels, points out that
suppliers are reviewing their
deals, existing relationships
and distribution channels
due to the current economic
situation.
“The declining rand,
coupled with global
economic recession and
depressed travel markets,
is creating increasingly
competitive conditions for
both suppliers and travel
agents. Consequently,
suppliers are reviewing their
product offerings, decreasing
investment in traditional
channels and finding
alternative or dual channels of
distribution.”
According to Noorjehan,
current trends indicate that
the majority of suppliers
in the industry prefer to
stimulate direct online
sales to eliminate or reduce
costs and dependency
on intermediaries. “Travel
consultants are increasingly
being judged by their ability
to produce more in less time
and expected to be sales
people, experts on technology
and an infinite number of
products, money handlers and
relationship managers all in
one. These trends have led
to increased tensions in and
the deterioration of existing
agency/supplier relationships,
which in my opinion, need to
be addressed.
Overrides will remain important”
However, industry players
don’t foresee that travel
agents will start to move
away from their reliance on
suppliers for commissions
and overrides. “The reality
is that overrides are seen
as a very important line
item on most agencies’
balance sheets and they
will do whatever they can
to maximise their earning
potential,” says WLH’s
Cathie Bester.
Override income is an
essential part of a retail
agent’s revenue, agrees
kulula holidays’ Deolinda
da Silva. She argues,
however, that the industry
should work towards a more
transparent model to level
the playing field. “With the
economic market being what
it is and revenues within
our industry being tight,
overrides and commissions
will continue to play a part in
tour operator choices when
it comes to suppliers. This
should become increasingly
difficult when competitors
go direct to consumers with
cheap offerings that other
operators are unable to
match.”
Noorjehan Vadachia says,
however, that the situation
lends itself more to the
fostering of closer working
relationships between
agents and suppliers.
“Travel agents still
account for a considerable
percentage of supplier sales
volumes and both parties
would be well advised to
nurture and strengthen their
relationships going forward.”
“Taking into account all
income opportunities, we
believe that building strong,
long-lasting relationships
is the way of the future,”
agrees Daniela Kelfkens,
international sales manager
for Top Deck Travel.
She says agents and
suppliers should have a
common purpose, to deliver
unforgettable, once-in-alifetime
experiences. “At the
end of the day, our collective
mission, be it as an agent,
or a supplier, is to first and
foremost give our customers
an unforgettable travel
experience. If we focus
on this, and put the right
customers with the product
that is best suited to them,
the back-end revenue will
take care of itself.”
Checkout Tours’ Giles
Clinton agrees, saying that
ultimately the client comes
first, making it imperative
that agents get the best
deals from their suppliers.
However, he points out that
these may not always come
cheapest from agents’
preferred suppliers.
However, Flight Specials’
Franz Von Wielligh
argues that, although the
reliance on suppliers for
commissions and overrides
will not disappear overnight,
the supply chain model will
change. “We as agents will
have to adapt and become
viable, sustainable and
profitable on point-of-sale
income only. What is the
point of doing business if
one only relies on overrides
for survival?”
Roles are blurred
A big challenge in the current
market is that the lines
between retailer, operator
and supplier are becoming
increasingly blurred. “This
means that a travel company
has to be all things to
all people and constantly
ensure the best possible
price without compromising
product – which will once
again benefit larger, stronger
businesses,” says Iain
Meaker, Comair executive
manager – Commercial
Distribution.
Kulula holidays’ Deolinda
da Silva agrees and says
many of the larger travel
agents have opened their
own tour operator divisions
dealing directly with
suppliers. “Agencies are
contracting with the suppliers
and suppliers are open to
negotiating directly
with agencies.
In essence,
many operators
are becoming
retailers by
selling directly
to the consumer
and many
agencies are
becoming
wholesalers in
terms of product
sourcing.”
At the end of
the day, most important
is the combined efforts of
the agent, operator and
supplier to work towards
what will benefit the client
most, says group brand
manager for Premier
Hotels and Resorts, Alan
Campbell. He says to
achieve this, suppliers
need to work together with
operators and
agents that are
in tune with the
supplier’s brand
messaging.
“It can be an
interesting
dynamic because
each tour
operator and
agent has their
own language and
philosophy which
needs to interact
with yours in the
message to the guests at
the end of the day.”
In light of this,
communication and
constant education for both
operators and agents is
key to success. “In South
Africa we are very fortunate
that the community is very
collaborative,” comments
Alan.
Relationships will strengthen
Industry players predict
that the relationship
between agents and
operators will grow
stronger as a result of the
current market conditions.
Ideally, the relationship
between the retail travel
trade and their suppliers
should be mutually
beneficial, interdependent
and characterised by
dialogue and negotiation
between the parties,
based on the principles
of co-operation, trust and
commitment that are
seen as core components
in building long-term
relationships, says
Avoca Travel’s Noorjehan
Vadachia.
Top Deck’s Daniela
Kelfkens agrees but adds
that relationships between
agents and suppliers
will have to adapt to the
ever-changing market.
“Suppliers will have
to come up with more
creative ways to drive
growth and to make it
easy and fun for
agents to sell
their product,”
she says, adding
that travel agents
will need to
become more
knowledgeable
on the different
products offered
by the suppliers.
“We personally
believe that
through great
product and
destination knowledge,
and professional and
efficient service we can
continue to enjoy the
support of agents who
know they are not only
receiving great prices but
a support base they can
trust, and a product that
their client will love and
want to experience again
and again,” comments
Checkout Tours’ Giles
Clinton.
Ultimately, the
relationship between
suppliers and agents
will become
tighter, says
Rian Bornman,
FlightSite
md. “South
Africa’s shortto
mediumterm
tough
economic
outlook looks
set to be a
primary driver
for bringing
suppliers and
distributors
closer than ever before
and mutual synergies are
streamlined.”
“I think the days are
gone when travel agents
were the ‘agents’ for
suppliers. We are re-sellers
of travel products and,
ultimately would like to be
as close to the source of
travel products. As long as
everybody in the chain can
provide value, relationships
between travel agents and
suppliers will live a long
life,” agrees Flight Centre’s
Franz Von Wielligh.
Technology will be a key enabler
TECHNOLOGY will continue
to improve the way suppliers
and travel agents work
together, according to
industry players.
Technology is a key
enabler for travel agents
and suppliers to streamline
processes and efficiently
conduct business, says
Avoca Travels’ Noorjehan
Vadachia. “The more
technologically advanced
the tour operators’ tools,
the simpler it is for travel
agents to resell their
products.”
Technology enhances the
agent’s ability to produce
more in less time hence the
strong correlation between
the degree of advancement
in technology tools and the
success of the tour operator
concerned, once product
and pricing parity have
been established, adds
Noorjehan.
She says technology
simplifies low-value and nonvalue-adding
tasks to save
time, money and resources
so that both suppliers and
agents can focus on more
important projects that not
only add real value to the
lives of both partners and
their mutual customers but
also influence travel agents’
decisions to align with a
specific preferred partner.
Cathie Bester says WLH
is constantly striving to
improve its systems to keep
up with client demands.
“We have an IBE (Internet
booking engine) that has
been developed for travel
agents, where they are
able to build a complete
package for their clients
with accommodation, flights,
transfers, meal plan options
and even excursions. It
has real-time availability
and can be used not only
for quotations, but also to
make the booking and
issue documents.”
On the downside,
TravelVision’s Annemarie
Lexow says boundaries
are becoming increasingly
blurred as a result of
technology. “Technology is
partly the reason for the
evolution in the market that
is breaking the boundaries
that used to define a travel
agent from the supplier.
Today, everyone has access
to everything through
technology.”
Access to product
knowledge is vital
PRODUCT knowledge is
vital to a travel agent’s
effectiveness and this is
where tour operators can
provide a great deal of
support.
Both suppliers and travel
agents want the same
thing: to confidently sell a
product, says Top Deck’s
Daniela Kelfkens. “No one
wants to be in a position
to advise a customer badly
and this is where product
knowledge is golden.”
Tour operators understand
that the best way to
sell more is to have a
well-trained sales force
that has access to the
latest information and
product knowledge, says
Avoca Travels’ Noorjehan
Vadachia. “With technology
playing such a vital role in
the industry today it is also
much easier for agents to
obtain product knowledge
online via tour operator
tools, webinars and the
Internet,” she says.
Operators have many
platforms available to
share information on their
product, agrees Dreams’
Stacey Barnett. “Agents
have widely varying
requirements in terms of
product knowledge and
operators need to be
flexible in assisting with
agents’ requirements and
availability.”
Stacey advises agents to
create a place where they
store information for the
suppliers they make use of
frequently, which includes
options for upselling of
excursions, activities,
upgrades etc, so they can
easily advise clients of
these offers. “Sometimes
an upgrade in hotel rating
or room type is a lot less
than expected and clients
are often willing to spend
a little more for what they
perceive as good value.”
Quoting requests are
becoming less and less
detailed, says kulula
holidays’ Deolinda da Silva,
therefore forcing a lot more
communication between
operator and agent to
satisfy the client’s needs.
“Having the very basics,
like number of passengers,
ages of children at the time
of travel, departure date,
flexibility of travel dates as
well as budget, is always
necessary to enable us to
produce the best possible
quote.”
Deolinda adds that
in terms of product,
one of the key issues
an agent needs to be
clear on is exactly what
attracts a leisure client
to the destination. “This
enables the operator
to accurately fulfil the
requirement by placing
the client in the right area
of the destination and
the right hotel with the
right facilities, ensuring a
satisfying holiday.”
Some consortiums have
identified the lack of
knowledge of employees
and are actively trying to
work with suppliers and
to implement some of
their own initiatives to
up-skill their staff, says
TravelVision’s Annemarie
Lexow.
“As a wholesale company
we have our own training,
either through the supplier
or internal training material
presented by senior staff
who have been to the
destinations before. This,
then, becomes our core
objective and focus when
we visit travel agents,”
she says.
What will happen to fam trips?
FAM trips are an incredibly
useful educational tool for
travel agents, but industry
players warn that these
are becoming few and far
between.
“Familiarisation trips will
always be available, however,
suppliers are increasingly
insistent on performance
delivery,” says kulula holidays’
Deolinda da Silva.
“We still believe in fam
trips that allow agents to
experience the resorts that
they are selling, and we don’t
believe that there is any value
in taking agents on a trip
where their days are spent
with one site inspection after
another,” agrees WLH’s Cathie
Bester.
However, TravelVision’s
Annemarie Lexow warns that
fam trips could become less
frequent as getting to the
destinations is tricky.
Fam trips are
useful, but costly,
and they offer
limited exposure,
says Avoca
Travels’ Noorjehan
Vadachia, hence
the target audience
has to be carefully
selected.
She says as
airlines tighten their
belts and cut costs,
they do not offer
agents the deals of
past decades, meaning that
fam trips for agents fewer
than before. She foresees that
the trips will continue, but to
a targeted market where the
return on investment can be
guaranteed or improved by the
suppliers actually offering the
trip. “More stringent selection
of participants and marketing
controls are inevitable to
ensure that this way of
product knowledge
development yields
the desired results
expected by the
suppliers.”
“We hope the
airlines see the
value in these as
much as we do,
and partner with
us going forward,
as we have had
years of successful
fam trips,” says
Beachcomber’s
Joanne Visagie.
She adds that fam trips
move the product from your
head to your heart.
Virtual reality might be
the way forward, comments
Annemarie: “More suppliers
and destinations should
start to invest in virtual tour
experiences as that is the way
of the future of educating the
trade on travel.
Tips to grow your
knowledge
Workshops and roadshows
Attend and participate in
as many workshops as
possible and if an operator
wants to arrange product
training sessions within your
organisation, try and attend,
says WLH’s Cathie Bester.
The WLH sales team
arrange product training
sessions with travel agents
as and when they need
it. The tour operator also
hosts an annual roadshow
in February each year where
members of the travel
industry can meet with
stakeholders to gain more
in-depth knowledge of the
WLH product.
The good old faithfuls like
accepting educationals,
workshop invitations,
training sessions and selfresearch,
even though they
may cost in the short term,
ensure that the knowledge
gained and confidence
to sell the destination
are priceless, says kulula
holidays’ Deolinda da Silva.
Use the tools at your disposal
For example, World
Leisure Holidays’ website
has detailed information
available on everything
that the company sells,
says Cathie. “Take the
time to look through
the site, open various
screens and look for the
information that
you need: fact sheets,
resort layouts,
information on
restaurants, what to
do in the area. All the
information that you
need will be there.
Knowledge is power.”
Get personal training
TravelVision always
welcomes agents who set
aside time for dedicated
training, says Annemarie
Lexow.
The trick is to call
Beachcomber and set
up a training opportunity,
agrees Joanne Visagie.
“We are very keen to train
and get excited by this
opportunity.”
Go online
Online training is
becoming the latest
trend, says Annemarie.
She warns, however, that
it is still a bit expensive
and that not everyone
is comfortable with this
concept as yet.
