ITCs should not have to justify service fees
GONE are the days
when independent
travel consultants
(ITCs) were considered stayat-home
workers who rolled
out of bed into a tracksuit in
the morning and made a few
bookings in between meeting
friends for coffee.
The sector is now a
professional force that
suppliers take seriously and
have become a dependable
source of revenue and a
vital cog in the distribution
chain.
“Bookings from this
sector have shown growth
in sales from 2015 to
2016 and this is a sure
sign that, in difficult times
we can expect this market
to grow. We like to look at
them [independents] as the
silver lining in our business,
where some traditional
channels are currently taking
a knock,” says Theresa
Szejwallo, md of Trafalgar.
One wonders then, why
ITCs feel pressure to justify
their value against service
fees, simply because
they may not work out of
premises in an office block.
ITC consortiums are quick
to roll off a checklist of
where that value lies: in
research, access to best
rates, comprehensive
product information,
personalised and dedicated
service 24/7, time-saving,
lower overheads and more.
Dinesh Naidoo, group
operations director of
Serendipity Worldwide Group
(SWG), says ITCs who are
well versed on product,
able to locate the most
cost-effective products
and to streamline travel
arrangements, will find
customers willing to pay
for convenience and
knowledge.
Much like using the
services of a lawyer for
legal advice, travel expertise
comes at a price, he says.
Confidence is key
The justification of service
fees is a question of
confidence, says Jo Fraser,
franchise director at Club
Travel, adding that ITCs
can gauge their own worth
by analysing the time
and effort they spend
on research and other
services. Clients should be
told upfront what the ITC’s
fees are and, if unwilling
to pay, consultants should
have the courage to send
them elsewhere.
For Garth Wolff, ceo of
eTravel, the savings a client
makes through patronising
ITCs are significant in
justifying service fees. “On
many occasions ITCs are
able to source cheaper
fares, which, in turn, save
the client, thereby justifying
a 10% fee as the overall
cost.” He says using an ITC
often works out cheaper
than using big TMCs as
ITCs’ overhead costs are
minimal and “there are little
to no ad hoc costs added
on after the fact, which
usually results in a greater
overall cost [saving] over a
12-month period.”
In addition, ITCs belonging
to consortiums such as
eTravel have more time to
go the extra mile for clients,
as Garth says “eTravel
takes care of every other
aspect relating to their
business”. As owners of
their own businesses, ITCs
also have vested interests
in every booking.
Regardless of whether a
business is a large TMC, a
small store or a franchisee,
the question of service fees
and value is the same for
all, says Mladen Lukic, gm
of Travel Counsellors South
Africa. He doesn’t believe
that working from home
limits an ITC’s offering in
any way.
“If you provide what
customers can do
themselves, it is difficult to
justify fees. If you simply do
what customers ask, you’ve
done nothing the customer
cannot do themselves.
Value is in convenience,
consistency, an easy
and improved customer
experience, and financial
return for the customer, for
example a fare he cannot
access himself, and the full
weight of the consultant’s
expertise. If you understand
that your value sits outside
of booking and ticketing,
there’s no reason why
an ITC cannot charge
significant fees, as does a
global TMC.”
A problem, says Mladen,
is that many agents assume
value is in fulfilment. The
customer will only be on
board if he sees value in
what he is offered. “As a
business we guarantee
value, which includes
financial return that is
significantly in excess of
what the customer pays.”
An example would be
offering key account
management to a client
that has capacity for such
a service, offering regular
communications and
meetings. “It’s not just
smoke and mirrors, it is
real value. What we’ve done
must outweigh what we’ve
claimed.”
Specialisation adds value
an expert in, for example,
bespoke rugby holidays,
you’re likely to enjoy referrals
and higher conversions and
sales,” he says.
Personal recommendation
is another way to add value.
Rian says nowadays a
Facebook feed is as influential
as a newspaper ad. Using it
to offer insight to destinations
builds customer trust in
the agent’s experience and
expertise.
He says passion for a
product is valuable too.
“While price matters, people
also buy on emotion. Being
able to sell a trip of a
lifetime, or impart your love
for an off-the-beaten-track
gem, is essential for a travel
business. Clients are people
too and will connect with you;
it shows when you love what
you do and can share it with
them.”
When ITAs are bolstered
by knowledge and the right
tools, Rian believes they can
be confident of their value.
He recommends that agents
educate themselves so that
their advice is top-notch and
current, to utilise tools that
provide travel products at
negotiated rates that can
be marked up, and to trust
themselves as a source of
information and service.
“While a lot of things can be
done online these days, the
convenience factor doesn’t
always trump the quality and
experience of a real flesh-andblood
consultant who offers
real-life insight, guidance and
help.”
Part of the Club Travel
stable, FlightSiteAgent now
has 500 active ITAs making
125 bookings a day and
generating R80m in deposits
annually.
Launched in 2013 as
the country’s first GDS-free
online travel provider, it offers
independent agents access
to competitive nett fares – air,
hotel, car and bus – to sell
under their own brand at a
mark-up.
Regulation framework still under development
OVES to differentiate
Independent Travel
Consultants from
Independent Ticketing
Agents (ITAs) may see
changes to Asata’s
INDEPENDENTS can increase
their value to customers in
multiple areas. Specialisation
is one such area, says
founder of FlightSiteAgent,
Rian Bornman.
“Focusing on one area of
travel such as sports tours
allows you to target and
capitalise on a niche, but
financially rewarding, market.
By building up a name as
MOVES to differentiate
Independent Travel
Consultants from
Independent Ticketing
Agents (ITAs) may see
changes to Asata’s
membership requirements.
The association was tasked
with drafting a strategic
framework to encourage a
strong business practice
that would protect the
value chain and deliver a
professional service to the
end consumer.
An Asata Member
Advisory Forum (MAF),
including representatives
of consortiums that offer
ITC models, was set up to
tackle the matter. Concerns
raised by the forum will be
used to initiate debate and
drive policy. “Asata cannot
prescribe business models
or definitions of business
models to its members,”
says gm, Kim Koen.
“It can, however, impose
acceptable regulations and
terms and conditions that
ensure compliance of the
members within each of
those business models and
we will therefore be drafting
this strategic framework
to look at the procedures
and terms of engagement
between the consortiums
and the entire value chain.”
Once defined, the
framework will be presented
to the Asata board for
approval. Further MAFs
may then be established to
review all business models
operated by members.
“The outcomes may also
see changes made to the
membership requirement of
Asata and may include a full
review of the agreements
between the various parties
in the value chain.”
The debate
Formulating definitions
of ITCs and ITAs and the
differences between the
two, comes into the debate.
While formal clarity is still to
be reached, there is general
consensus that the ITC
processes all transactions
through a consortium,
while an ITA is a ticketing
agent who processes only
air sales through a hosting
entity.
Garth Wolff of eTravel
defines an ITC consortium
as one where the host
company collects funds
directly from the client
and manages these funds
on behalf of the ITC and
supplier. The host company
employs staff who are
experienced in cash flow
management, debtors
book processes and other
managerial functions,
and undertakes all travelrelated
administration,
from invoicing to collection
of referral commissions.
eTravel identifies itself as an
ITC consortium.
ITAs, says Garth, collect
funds directly from the
client and then manage the
cash flow of payments to
the ticketing agent and/or
supplier. A maximum of 10%
of the funds received belong
to the ITA. “Unless proper
systems are in place this
could become a challenge
to manage and could lead
to unforeseen cash flow
problems that may result in
ITAs defaulting.” ITAs take
personal responsibility of
most of their back office
administration.
Dinesh Naidoo of SWG,
which, according to these
definitions, falls into the
ITA category, gives a
different emphasis to the
distinction. “An ITC model is
[one] whereby monies and
suppliers are paid from the
host company, while an ITA
is in full control of its bank
accounts and makes direct
payments to the principal.”
Club Travel, too, would
qualify under these terms
as an ITA. Franchise
director, Jo Fraser, believes
more weight should be
placed on the notion of
independence of the ITA/
ITC. She says a close review
of some ITC models reveals
that consultants are, in
fact, employees and not
independent at all.
Garth feels that regulating
the sector may become
difficult “as many groups
who have ITAs are
understandably reluctant
to admit that the ITA model
is not nearly as secure to
suppliers and customers as
the ITC model”.
Initiatives to strengthen supplier relationships
STRONG relationships with
suppliers are in the interest
of ITCs/ITAs but with many
of them home-based, a visit
by a supplier representative
isn’t always practical and
most communication has
to be routed via the host
company. Technology makes
it possible for consortiums to
offer webinars, online training
and video conferencing.
TNW rounds up some of the
types of initiatives that both
suppliers and consortiums
have in place.
What consortiums say
FlightsiteAgent:
Being part of the Club
Travel group “means that
any benefit the consortium
negotiates with suppliers,
like additional commission,
is immediately available
to FlightSiteAgents,” says
marketing manager, Isobelle
Reinertz.
SWG:
Dinesh Naidoo says in
many instances it is the
reach-out to the ITC that
makes a difference, such
as personal visits, regular
updates, product training
and proper selling tools.
“We use our SWG APP
to train and build strong
relationships between our
ITAs and the supplier.”
Travel Counsellors:
“I’m not aware that suppliers
want to have relationships
with individual ITCs and not
aware of any initiatives,”
says Mladen Lukic. He
says suppliers may have
a challenge in that some
host ITC companies do not
afford them access. “We
offer communication between
suppliers and ITCs at our
annual conference, on our
in-house TV channel and
through video conferencing.
But these are our initiatives
as the host and not the
initiative of the supplier.
eTravel:
The beauty of the ITC model
with eTravel is that the ITC
does not have to worry too
much about fostering these
relationships as we step in
and assist wherever
necessary as we are
partners, says Garth Wolff.
“‘ITCs work for themselves
but not by themselves’
when working in association
with eTravel.”
Club Travel:
“I think it is up to the
consortium to put
initiatives in place for
their ITCs to create a
stronger relationship with
suppliers,” says Jo Fraser.
Club Travel has weekly
webinars. “Our suppliers
host webinars and they
are then put on our
intranet for the agents
to listen to and watch.
We also host monthly
activities with ITCs and
suppliers, such as pasta
or sushi making, Red
Bus trips, zip-lining,
Masterchef or Murder
Mystery events. Two or
three suppliers host these
functions and I have about
20 partners attending
each of these.”
Jo says Club Travel also
has its yearly Indaba
where all the suppliers
attend a workshop for
ITCs, as well as the
agency’s conference.
“What works well are the
breakfasts we host with
hotel chains. We send
out updates on any news
the suppliers want us
to communicate to the
group and all our deals
and updates are on our
intranet. We also have
competitions with key
suppliers for our ITCs.
What suppliers say
Trafalgar:
One of the challenges
in doing business with a
home-based agent or ITC
is to identify them. So we
are continuously putting
measures in place to find
and support them, says
Theresa Szejwallo.
“At Trafalgar we have a
number of excellent systems
in place that are perfect
for this group. Our online
booking system and the
online payment gateway make
the process of the payment
hassle free for these agents.
We also have our Follow the
Sun service where we are
able to assist telephonically,
amend bookings and take
payments 24/7 Mondays
through Fridays.”
She says training is
paramount too and, as ITCs
can’t just have ‘pop-ins’,
Trafalgar needs to make
the most and best of its
time by making its training
worthwhile and more of an
investment for them rather
than merely a “catch up”.
“We regularly host our
Wanderlust Training at The
Travel Corporation head office
in Rosebank, where agents
get comprehensive training
on all the brands. They also
get to meet our reservation,
documents and accounting
staff, whom they will be
dealing with on a day-to-day
basis. Relationships are
easier to forge when there is
a face to put to a name and
voice.”
Beachcomber Tours:
Beachcomber has an
online quoting and payment
system to assist ITCs to
get quotes 24/7. “We have
a travel agents’ portal that
hosts a myriad of selling
tools like e-flyers or eChats
that are customisable – the
agency can add its own
contact details and send it
to their client mailing list,
says Joanne Visagie, sales
and marketing manager.
The operator also has
aids called ‘beachcomber
e-assistance’: e-brochure;
e-flyers; e-hotel fact sheets;
hotel slideshows; YouTube
video clips per resort; and
themed fact sheets on
weddings/golf/kids/renewal
of vows/honeymoons. All
special offers and ‘Reasons
Why’ are also in this portal.
“We are huge believers in
training,” says Joanne. “We
do coffee and cake catchups
with the consultants
where we update them face
to face and, on occasion,
we have hosted an ITC-only
educational trip.”
She says independents
are hard working and
are personally invested
in their businesses. “We
want to make selling
Beachcomber easy for
them and productive, with
quick commission, happy
clients and repeat guests.
Our full focus is on making
everything available to
assist them, adding value
and closing sales.
Avis Rent a Car
South Africa:
The Avis history with ITCs
spans more than two decades
and Avis remains intent on
continuing to be supportive
of the ITC model, says Lance
Smith, executive of Sales.
ITCs partnering with Avis
Budget have access to the
following benefits:
60-day worldwide account
(subject to normal terms and
conditions)
Dedicated Avis assigned
number to direct
commissions
A total transport solution
(Rent A Car, Point 2 Point
transfer services, Avis luxury
cars, Avis Chauffeur Drive,
Avis Van Rental)
Access to training
Access to specialised travel
sales team
Access to the call centre and
GDS help desk
Club Red membership, which
drives additional rewards
Dedicated microsites.
Cruises
International:
Cruises International has
initiatives for all travel
agents across the board,
be it retail or ITCs.
These are generally
brand specific, and
may include bonus
commissions.
“We have weekly
product update/training
sessions that ITCs are
invited to. Sometimes,
we do dedicated training
for a particular ITC.
We are in constant
communication with
the ITCs via their
head offices and even
directly, if and when
they need something,”
says Thaybz Khan,
manager – Contemporary
Brands, Royal Caribbean,
Celebrity Cruises and
Azamara Club Cruises.
Thaybz says Cruises
International also has a
travel agent portal called
Shipmates, which is
its online arm to reach
those who cannot come
into its offices.
“We encourage all our
travel partners to sign up
for this to stay updated
with the latest in our
product offering, to win
prizes and learn more.”
She adds that the
cruise company always
encourages its travel
partners to come to
it when they require
assistance, be it with a
booking enquiry, closing
the deal or matching
a quote.
“The promotional
offers sent out by
Cruises International
do not have our contact
details on them.
“We purposely
do this so that our
travel partners, like
the ITCs, who do
not necessarily have
access to designers,
can re-purpose this for
their client base,” says
Thaybz.
“We offer our building
premises free of charge
to agents who wish to
host cruise evenings
here with their client,
she adds.
