Loyalty: What’s in it for agents?

T RAVEL agents say suppliers with strong customer loyalty programmes need to do more to directly reward the retail travel trade which is driving bookings, rather than just the end consumer. For some time, several of the large international hotel groups have developed loyalty programmes which actively reroute business away from travel agents (including OTAs), by restricting point accrual and elite status perks to direct bookings only. The strategy appears to have been very successful in the US market. It’s believed that the purpose of this all-out disintermediation is to break the dominance of giant OTAs such as Booking. com and Expedia, which are able to command handsome commissions (up to 25%) from the large hotel groups. So the direct relationship lowers the acquisition cost and allows the hotel brand ownership of that valuable guest data for evermore. Such is the power of these direct relationships that some hotel groups have memberships numbering in the tens of millions. SA agents While these hotel giants intensify their efforts to divert business away from the retail travel industry, travel agents find that many clients actually want their agent to be able to manage the booking on their behalf. South African industry members told Travel News that while loyalty programmes could influence booking behaviour, agents placed increasing importance on ease of use and long-term supplier relationships. “Hotels, in particular, are consumer-focused and, in many cases, agents are not even compensated with commission, and unless you provide them with an excessive amount of business, agent discounts are very low,” said Debbie Joubert, MD of Sure Travel 24-7. She said supplier incentives could influence booking behaviour when structured with achievable targets, particularly for smaller agencies. “Offering agents vouchers over a certain period for bookings at certain properties would be a great incentive as that property group or operator then benefits,” she said. Volume-based incentives often fail to resonate with smaller agencies that may not be able to produce the required large volumes for a single supplier. “Having to book 10 couples at one hotel to qualify for however many free nights is not a realistic incentive.” Joubert added that fragmentation across supplier programmes also created operational challenges for agents. She pointed to systems that allowed consultants to consolidate rewards from multiple suppliers into one redemption system, such as Sure Travel’s internal rewards programme, Agent Points. “This type of system is amazing for incentivising and rewarding. Most of our suppliers offer us points which we can accumulate and use for anything from household products to accommodation, vouchers at our favourite shops or a cash payout,” she said. Influential According to Jonathan Gerber, Director of TAG Travel, the value of customer loyalty programmes remains more influential than consultant incentives in certain sectors of the industry. “There are two types, incentives to the clients and then incentives to the agents,” said Gerber. “From an agency perspective we are very cognisant of our clients’ preferred partners. There would need to be a compelling reason why we didn’t go with the client’s preferred.” Gerber said consultant incentives tended to work more effectively in leisure travel than in the corporate sector, where client preferences, pricing and schedules usually drove purchasing decisions. “In terms of consultant incentives, I am not convinced that these actually work in the corporate space but are far more successful in the leisure space where there might be no loyalty or reason to go with a specific supplier.” TAG Travel ITC Manager Henry Annandale added that consultant incentives offered by hotel aggregators could still influence agent booking behaviour. “While this doesn’t necessarily influence which hotel supplier is booked it does make them think about which platform to book it through,” said Annandale. Gerber said that while suppliers were generally making efforts to recognise the trade through training and agreements, educational trips had declined significantly. “In the ‘old days’ our staff often got to experience the product through avenues such as educationals. Unfortunately, this is no longer the case.” Annandale said customer oyalty programme features still retained value throughout the travel sector, particularly for frequent travellers accessing benefits such as lounge access, upgrades and seating preferences. However, he said loyalty programmes no longer guaranteed repeat business. “I have known customers to join a loyalty programme for a single waiver/discount but then never use that supplier again.” Guests first From a supplier’s perspective, consumer programmes offer knock-on benefits to agents. BON Hotels explained that its loyalty programme, BONami, was intentionally designed as a guest-facing product rather than a direct trade incentive programme. According to Jadine Venter, Head of Marketing at BON Hotels, the greatest value for agents comes from ensuring that clients receive a positive experience. “BONami is intentionally a guest-facing programme,” said Venter. She argued that well-executed guest loyalty programmes ultimately strengthened the relationship between agents and clients. The programme offers guests benefits including complimentary nights, room upgrades and dining discounts across BON Hotels’ African portfolio. However, Venter acknowledged that many supplier loyalty programmes failed to adequately consider the role agents played in influencing bookings.