Transparency issues

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Some delegates at the ACTE forum said corporates were shying away from TMCs that didn’t offer complete price transparency.

As the question of how travel agencies can make a profit in a 0% environment continues to plague smaller agencies, professional outfits that have already made the transition from ticket issuers to travel management companies (TMCs) are already taking the game to the next level.

In many agencies, notably those affiliated with international organisations, like Kanoo Travel's partnership with American Express, service or transaction fees have already become the norm.

But as the market matures, new challenges such as the question of transparency in customer relationships and meeting the high expectations of major multi-national clients are ongoing.

The Association of Corporate Travel Executives (ACTE) set out to tackle some of these key issues at a recent forum staged at the Radisson SAS Hotel Dubai Creek Deira.

Despite a small turn out of just 25 delegates spanning airlines, TMCs, hotels and just one corporate client, the issues raised provoked intelligent debate and generated some interesting topics of discussion for the guests.

Kanoo Travel central marketing manager Tuan Azran Burah identified the fundamental differences between the leisure and business travel markets in the region, pointing out those business travellers already have a set of expectations that have to be met.

"Multi-nationals that work with us in other markets like Europe or the US expect the same level of service that they receive there," he said.

"At the end of the month they want MIR reports and PNR breakdowns - some of them even hire consultants to ensure that they are getting value from the travel management fees that they pay."

Emirates sales manager Tatiana Korshunova noted that many agencies didn't have the means to provide detailed reporting or invoicing to their corporate clients.

"They don't have the technology they require to support such complex back-of-house processes and can't see the justification in spending on that technology," she said.

But other delegates argued that transparency should not be the be-all and end-all of client relationships and pointed out that there was a fundamental lack of trust from the corporate about the agent's income.

"It should be a healthy business relationship based on trust. There are certain things you cannot disclose, such as your internal business practice and profit margins," said one delegate.

Radisson SAS Hotel Dubai Media City director of sales and marketing Lars Gericke was one of several suppliers that urged the enhancement of the role of TMCs to incorporate hotel bookings and other services into their product offerings.

"Why do some corporates have a dedicated travel agent but still handle their own hotel bookings?" he asked.

"Corporates need to learn to trust TMCs to handle their hotel bookings as well as their travel, and therefore allow them to perform as a complete TMC."

Other delegates claimed the reason most corporates booked their own hotel rooms was because of the "kick-backs" or perks that secretaries or travel managers could gain by controlling the bookings themselves.

Moderator Bicky Carlra, group president of TraVision Inc. also raised the subject of corporate travel policies.

He noted that one of the obstacles that prevented companies from implementing mandated travel policies was the fact that the amount of travel data available to them from TMCs, hotels, airlines or credit card companies was limited.

"But companies are waking up to the fact that in order to manage costs, you have to have a mandated travel policy," said one delegate.

"Unless we all work together we are not going to move this region forward."

In the second session, Emirates' Korshunova joined Qatar Airways senior manager global sales and distribution Ian Heywood and American Express Travel Services network development manager Roland Bunge for a panel discussion entitled ‘Airline commissions versus management and transaction fees'.

Following Qatar Airways' recent announcement to move to 0% on January 1, the onus was on Emirates Airline to justify its position as one of the few remaining carriers in the region to continue to pay agents commission.

"The fact that some airlines pay and others don't creates confusion for corporate clients - I have lost track of how much time we have spent with clients trying to explain this to them," said Amex's Bunge.

But Korshunova said paying agent's commission was part of the carrier's commitment to supporting its travel agent partners.

"We want to support travel agencies so we won't take it away from them and let them struggle to survive," she said. "We want them to get the sufficient income that they deserve so they can invest in training, staff and IT technology so that they are ready for 0% when it does come here."

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