ITCS and smaller agencies are losing out on ‘bread and
butter’ sales in a challenging market as larger agencies use volume and cash
flow to secure bookings with small deposits and absorb the risk of doing so.
In a conversation on Open Jaw by Travelinfo, agents gave voice to this issue and
named STA Travel’s current deal, which allows clients to secure certain
packages with R1 000, as a key challenge. Flight Centre Travel Group SA
was also mentioned on Open Jaw as an agency that had offered similar deals.
“When a large agency offers the same package at the same
rate, but can allow the client to secure the package with a far smaller deposit,
it becomes difficult for ITCs [and smaller agencies] to compete. We have to
ensure that the deposit we receive covers the cost of airfares upfront in case
the client cancels,” Stuart Goodall,
an ITC based in Johannesburg, told TNW.
He added that in the current market, increasingly price-sensitive clients were
taking their business to agencies that could secure the booking at a lower
cost.
Lize Maartens, STA product and marketing manager, told TNW
that STA Travel had created a flexi-product range to for customers who previously saw travel as
inaccessible. “[Our research shows that] the increase in sales achieved
by offering this product far outweighs the risk associated with cancellation.”
She added that STA had strong relationships with its suppliers, allowing for
the offer to include accommodation and touring.
Carlos Luis, land
product leader at FCTG, confirmed that FCTG had offered similar deals in the
past and added that the agency had done so by absorbing the risk internally.
“It is always going to be more challenging for the smaller
guy when the economy falls on tough times,” said Otto de Vries, ceo of Asata, adding that ITCs and smaller agencies
could compete by emphasising the personalised service they offered and the
attention to detail the client could expect to receive from them.
