Transparency nothing new -private sector

WITH Treasury
negotiating nett
fares with suppliers
and cutting travel agents’
commissions and overrides,
some in the industry question
whether the private sector will
follow suit. However, TMCs
and travel buyers told TNW the
private sector was well ahead
of government and had been
insisting on transparency and
nett fares for years.
One travel agent, who
spoke on condition of
anonymity, told TNW that,
although the government’s
insistence on transparency
was understandable and
even admirable, Treasury had
created the impression that
all override agreements were
‘bad’ and ‘questionable’. “This
creates the wrong impression
and will undoubtedly trickle
through to the private sector.”
Procurement manager
Africa at Puma Energy, Alan
Reid, says an insistence on
transparency and nett fares
has been an existing scenario
for several years in the private
sector.
He says some companies
are happy to allow TMCs the
income generated by overrides,
as long as it is declared. “In
order to achieve a fair return
for the services provided, a
TMC needs to be open with
cost and revenue streams.
Openness builds trust and
profit follows. All companies
understand the need for profit
by their suppliers.”
Some corporates have had
nett fares for years, but they
understand that in exchange
for negotiating nett fares
with suppliers – without
commissions and overrides
for agents – service fees often
become the sole revenue
stream for their TMC, says
Monique Swart, founder
of African Business Travel
Association (ABTA).
“Instead of worrying about
transaction fees, buyers
should be focusing on
reducing their overall cost of
travel and incentivising their
TMC to help them do so. The
value of what you are getting
from your TMC should not be
measured by how cheaply you
got them to service you, but
rather the savings that you
achieved overall due to their
expertise.”
Monique says if savings are
not achieved in a measurable
way, clients will insist on higher
levels of transparency to find
savings elsewhere. She says
TMCs will need to demonstrate
their expertise and sell their
value better, whereas buyers
will need to approach their
TMCs as strategic partners
and not ticket bookers.
Chairperson of the Global
Business Travel Association
(GBTA), Howard Stephens,
says companies are happy
to pay a professional to
do a job but don’t want to
find that the TMC is getting
kickbacks on the side, as
it will be considered as a
rip-off. According to Howard,
transparency has definitely
improved, and TMCs have
started negotiating higher fees
with companies.
“The only way we will win the
trust of the public, is by being
transparent about how we
charge and how professional
fees contribute to running a
successful business,” says
Rachael Penaluna, business
manager of Sure Maritime
Travel. “Those who hide their
‘fees’ and inflate fares have
already felt the wrath of the
travelling sector and I don’t
believe they should be in
business anyway.”