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COMMENT: SYMBIOSIS MEANS A GOOD DEAL FOR ALL

Date published 07.08.2017

TRAVEL agents still get the vast bulk of their revenue from airline and airline associated sales through service fees, the commissions some airlines feel it benefits them to pay and, in the case of a few airlines, significant incentive payments as high as 20 percent, linked to volume.

Agents are naturally eager to reach designated targets.

Look no further than less convenient indirect flights, which are scooping large chunks of the market, and not just because of frequently lower fares. All things being equal, or nearly so, any product will sell more if there is incentive or reward.

But, generally speaking, since the controversial zero commission era began, which brought relations to a historical low, and the introduction of service fees, agents have actually cost the airlines very little for the huge amount and percentage of sales which they generate.

Certainly, technology, computers, tablets, smartphones and other means have made it a lot easier for customers to browse for flights, in fact virtually any travel product and plan and book their own itineraries. But it is a biased means of buying and, clearly, many still opt to seek advice, take the hassle out of transacting and ensure they wind up with the most appropriate and competitive product by consulting an agent.

In all categories, the supplier/agent relationship is a symbiotic one; unfortunately, the symbiosis is often more on one side than the other, which is not conducive to the most harmonious or productive results. The most successful business leaders know very well that a deal is not a good deal unless it is good for all parties concerned.

Negative aspects of the relationship do not need to be there and, in the long-lost past, it was not and history proves it. Those were the times when, to coin a phrase, everybody was fat and happy.

As in the case of many industries, rapidly advancing and enabling technology has changed everything and most of the travel retail industry, based traditionally on the high-street store, has been too slow to adapt, understand, conceptualise and adopt the opportunities which that new technology provides and, in fact, demands.

That is most particularly acute in the field of communication and the spread of lifestyle solutions amongst the public. The exponentially expanding role of smartphones and how to capitalise on that is a glaring example. But it needs creativity, planning and expertise, often overlooked or ignored in the myriad of challenges involved in the everyday management of a business.

The airlines, much richer in resources and keen to reduce costs wherever possible have been much quicker to see and act on the possibilities.

Partnerships between supplier and seller do, however, remain critical to each other.

It was interesting to note in a presentation to staff and affiliates at Club Travel’s 30th anniversary event last month that one of the fastest growing retailers in South Africa now considers itself as much a technology as a travel company, a telling remark.


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