Travel agent interview: Asim Arshad

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Arshad: agencies are making more money with 0% commission than they were before.

Asim Arshad, GM of UAE-based Orient Travel talks about the benefits of a zero commission environment and explains how he incentivises his workforce.

How long has Orient Travel been in business?

It was established in 1963, nearly 44 years ago, and is the second oldest travel agency in the region. I have worked here for 27 years, in a managerial role for 22.

What changes have you witnessed during this time?

I have seen the travel and tourism industry evolve. The business travel was always here, but the leisure industry has grown from nothing. The perception towards booking travel has changed; 15 years ago the perception was that it was going to be far more expensive to book a hotel with a travel agent in advance and that you could get a good deal when you arrived.

It was true. But now, if you don't book your hotel and air ticket in advance, the hotel and the aircraft will be full. You now have retailers that can book you a package, manage your booking, and add value. You need to book at least three or four months in advance. The perception has changed. The market has educated itself and become more mature.

What's the structure of your business?

We have a good market mix; we are not just a corporate travel manager but also the GSA for 10 airlines, most of them in Sharjah, and two for the UAE. They include Air France, Alitalia, Olympic Airways and LOT Polish. As the market has envolved we have developed a number of segments within our business.

One of our biggest revenue earners is corporate travel, but we are also very strong in the leisure sector, particularly with our outbound holidays division, The Holiday Company, which has really come on leaps and bounds in the past seven to eight years. We are also focusing on pilgrimage traffic, a niche that very few companies here have developed. We can set up Umrah trips or visits to the Vatican in Rome, for example.

What about your retail sales strategy?

We have 18 strategically located offices across the UAE and we are building up our retail base as this breadth of distribution helps the airlines [for which we are the GSA]. We are about to open a new office in Abu Dhabi, next to Khalidia; it's around 2000 square feet, well located, and very visible. Once Abu Dhabi is up-and-running, we may look at opening a holiday shop for The Holiday Company, somewhere in Dubai.

Do you think you are losing business to web sales?

I would not like to think that online travel sales are impacting my business, because it's not in my interests! We feel that the element of human value can't be replaced.

When you talk about booking on the internet, is it really a good place to book leisure travel? People feel they can get a good deal, but it doesn't always happen. Customers can research a destination online, but they need a travel expert to make the booking, particularly when a booking requires a lot of changes.

People are confident booking online but when they try to make a change such as a refund or change of date, it's a disaster. Also, in a place like Dubai, it might be a vibrant and cosmopolitan city, but it's not as big as New York or London and business still works on relationships. Customers rely on their relationship with a travel agent to make bookings.

How is zero commission working for you?

It's working great. One has to see what's happening in advanced countries and realise it is an eventuality in the Middle East. Agencies are making more money with 0% commission than they were before, so I don't see the problem. It allows you to take your own terms to the clients and charge them a transaction, service or management fee.

In your view, how does the UAE's travel industry need to progress?

If the country is talking about quality, it needs to enforce some minimum standards/regulations for travel companies, and DTTAG (Dubai Travel and Tour Agents Group) is trying to help do this.

If you don't do something that you promised the consumer, they should be reimbursed. This would happen if you set minimum requirements and it would generate quality agencies and operators. Then people would not worry about zero commission because they would be offering a good service [worth charging a fee for].

Has the recruitment of good quality staff been an issue?

We have experienced our share of problems - everyone has. We have had people leaving and going back to India and Pakistan.

In the travel industry, 80% of the workforce was from the Indian Subcontinent, but with India showing a lot of promise economically, many people have gone back.

And it's not just the good wages - it's the high rate of inflation and the cost of living here. People do find it difficult to stay here with the salaries being offered.

We have introduced more staff benefits, such as providing transport for staff to get work. It saves them money and they also arrive less stressed. We are also looking at providing accommodation and other incentives for them.

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