INDUSTRY players
believe this year will
see the beginning of a
far healthier playing field,
despite agents fearing
the predicted commission
cutting and the trend toward
consolidation.
The first six months
of 2017 will present
even tougher business
conditions than last year,
comments Marco Cristofoli,
coo of BidTravel Leisure.
Frank Palapies, group
chief commercial officer of
Wings Travel Management,
says he sees a clear
trend towards greater
consolidation as agents
continue to suffer the
loss of secondary income
streams like commissions
and overrides.
Marco says, as a result,
many smaller agents will
need to join consortiums to
survive.
But, industry authorities
agree that the cutting of
supplier incentives is a
positive thing, as agents
will be forced to charge a
service fee that is a true
reflection of the value
they provide. Once this
happens, Frank believes
the entire industry will
benefit from greater
transparency, moving away
from the current tendency
for agencies to keep
undercutting one another to
the detriment of all.
Marco says this will be a
pivotal year during which
agencies will learn to
become more self reliant
in order to survive. “When
this happens we will be
in control of our own
businesses.”
What’s more, history has
proved that suppliers can’t
afford to cut off agents
from incentives forever.
Frank says this situation
has already played out
in other markets like
Germany, where so much
consolidation took place
that eventually only a few
major TMCs were left.
As a result, these TMCs
were able to place major
pressure on suppliers. “We
saw airlines revert to where
they were 15 years ago and
start reintroducing baseline
commissions,” he says.
Garth Wolff, founder
and ceo of eTravel, says
while it’s likely that there
will be consolidation this
year, it can be dangerous
to try and predict cycles.
“Running a business
nowadays is incredibly
tough.” His advice for
agents is to focus on the
basics of good business
rather than trying to
operate according to the
kind of business cycle
for which the industry is
headed.
