Travel professionals face a bright future

Once upon a time, there used to be travel agents… Hang on…stop that story right there! While travel agents the world over are sometimes described as dinosaurs, extinct and, most recently by a Business Insider report, relics of the past, those travel agents that have evolved to keep up with changing consumer demands are in fact thriving.

The problem with the recent Business Insider report which claimed travel agents were a relic of the past and that the number of agents in the USA was actually half of what it was 15 years ago, is that the study failed to take into account the growing number of independent travel agents in the market.

“Surveys like these are dime a dozen and always based on a very narrow interpretation of the subject,” explains Mladen Lukic, GM Travel Counsellors South Africa. He says the report completely ignores the changes that have taken place in the travel industry over the last decade whereby travel agents have evolved from the corporate monoliths of the 90s representing the embodiment of the ‘Travel Agent’ heritage into ‘Travel Advisers’.

In the strict sense of the word, Lukic says the travel agent is indeed a relic of the past. “In our market we will continue to see the demise of the companies that are unable or unwilling to accept this reality. In this context South African market is just a little bit behind but following the same trends as overseas.”

According to Lukic, the new generation of travel advisers have made a significant departure from a reliance on commission and dependence on supplier sanctioned remuneration to a genuine focus on clients and their needs. “The most successful ones have also realised the value of relationships in the 21st century economy,” he adds.

Garth Wolff, CEO eTravel, agrees and explains that the traditional bricks-and-mortar travel agency is indeed dying as a result of high costs and small margins. The ITC market however, is far from dying, he argues and is actually continuing to grow.

“In South Africa, the traditional bricks and mortar travel agents will continue to diminish. IATA’s new financial criteria will push up costs for the traditional travel agent, who will then start exploring the option of becoming an ITC,” says Wolff, adding that the future of the travel industry is the ITC model.

However, according to Rod Rutter, outgoing COO XL Travel, the ITC sector is not only the only travel agent sector that has a future in South Africa. He explains the corporate market heavily relies on TMCs for data information, payment mechanisms, personal attention and cost saving, he argues. “There will always be a need for TMCs in the corporate market,” he says.

Tourvest Travel Services Chief Sales and Marketing Officer Claude Vankeirsbilck says travel agents have had to change the way they operate and are imperative for those travellers for whom travelling with peace of mind is important. “Our role is to provide a trusted source of advice and information, as well as product and content quickly.

“We have some responsibility to inform our customers and act in their best interest. And that means to tell them what’s happening the the destinations they’re travelling to, suggest travel in a specific way and provide risk communications daily.”

Claude says Duty of Care has become a massive component in any travel management programme. “We have employed technology to help our customers manage risk. We know where our travellers are at any point in time.”

Vanya Lessing, CEO Sure Travel, explains the secret to survival for travel agencies is to move with the times. She says: “The travel agents who did not move with the fast pace of consumer demand, technology and above all, providing customer service excellence, certainly became relics of the past.

“Today’s travel professional understands that customers have choice and that they have to provide not only the product, but a comprehensive travel management service. The value of trustworthy supplier relationships, duty of care and truly knowledgeable, experienced people cannot be underestimated.”

fuel surcharge

Hong Kong scraps fuel surcharges. When will SA follow suit?

International governments are increasingly putting pressure on airlines to scrap controversial fuel surcharges as the price of oil is now at an all-time low and trading around US$30 a barrel. The latest government to take radical action is Hong Kong.

The Hong Kong Civil Aviation Department (CAD) announced last week that airlines will no longer be allowed to levy fuel surcharges for any flights originating from Hong Kong until further notice.

The CAD explained in a statement that since the aviation fuel prices in the past months have greatly reduced and stabilised to a reasonable level, the levying of passenger fuel surcharges is no longer warranted.

The recent announcement from the Hong Kong CAD shows it is not impossible for airlines to scrap the surcharge. On its Hong Kong route, SAA has scrapped the fuel levy under pressure from the Chinese government for all flights from February 1. Previously, passengers had to fork out an average of R500 for ‘carrier-imposed’ surcharges on the route.

Airlines introduced the fuel surcharge to protect themselves from the rising cost of oil when it was trading at over $120 per barrel.  Today however, oil is at a 12-year low. So, why are airlines still making the consumer pay ‘extra’ for fuel?

In South Africa, airlines often hide behind the excuse of the rand rate of exchange. They argue that any reduction in the price of oil is offset by the fact that operating costs are in dollars. Airlines have even changed the name of the fuel surcharge to ‘carrier-imposed’ surcharges.

Although it is the airlines’ absolute right to run a commercially viable and profitable business, the argument by travel trade organisations such as the Association of Southern African Travel Agents (ASATA) is that this fuel ‘surcharge’ should be incorporated and presented in the actual airfare, not as a separate charge.

Says ASATA CEO Otto de Vries: “ASATA’s view is that it is no longer acceptable for airlines to levy a fuel surcharge given the many changes to consumer laws, inclusive pricing and oil prices’ fall. Fuel is a cost of doing business for airlines and should be presented in the base fare so that South African consumers can see up front and in a transparent manner what they are paying towards airfare.

“Consumers are also often not aware that the fuel surcharge or carrier-imposed surcharges are not a government-levied tax and would perhaps be less content to pay these if they knew that it was an attempt by the airline to recover what essentially is a direct cost to them doing business. They do not specify a surcharge for a pilot and crew, so why should fuel be a separate surcharge?”

For frequent flyers, there is a further implication of declaring a fuel surcharge. Travellers can only use their frequent flyer points to pay for the base fare, not for any levies or government taxes. Also corporate discounts are only calculated on the base fare. So, by categorising a large chunk of the fare as a surcharge, airlines can protect their income from discounts and loyalty scheme claims.

ASATA launched a comprehensive Fuel Surcharge Study last year, which was tabled at the World Travel Agents Association Alliance’s and adopted as a global study to be used to lobby airlines to incorporate the fuel surcharge component in their base fares.

Don’t ditch the birth cert just yet…

South African parents should carry an Unabridged Birth Certificate for their children under the age of 18 until passports for minors in South Africa are issued with both parents’ names in them.

Department of Home Affairs (DHA) Director-General Mkuseli Apleni announced last week that the department would introduce new passports for South African minors with parents’ details which would become accepted documents and replace Unabridged Birth Certificates for children travelling internationally. An exact date has yet to be announced for the roll-out of the new passports, although Apleni is ‘hopeful’ this will be from October 31 this year.

Clients, who have already applied for an unabridged birth certificate or already have one in their possession, will not be required to apply for a new passport for their children immediately. They can use the birth certificate as a form of travel identification and only apply for a new passport for their children when the passport needs to be renewed.

Besides the UBC, all other consent and affidavit forms also still apply when only one parent is travelling or the minor is travelling alone. The good news on this front is that the DHA will be extending the validity period of Parental Consent Affidavits from 3 to 6 months.

For school tours, the DHA has also made some additional concessions: A formal template will be made available on the website, allowing principals to confirm that permission for children to travel on school tours.

For international travellers, the issue of immigration regulations as they pertain to the requirement for Unabridged Birth Certificate is equally confusing. Airline check-in staff are no longer required to ensure that foreign passengers carry an unabridged birth certificate (UBC) when travelling with a minor. International visitors who have applied for a visa to enter South Africa, will no longer be required to present a UBC at all when entering South Africa, whereas parents from visa-exempt countries are ‘strongly advised to travel with the birth certificate’.

Despite this, reports indicate that airlines are still checking that all passengers under 18 carry a UBC, as they say they have not received any notification from the DHA.

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