Wednesday, May 20, 2015

How travel agents should be paid.

The remuneration of travel agents has always been an issue of debate, form the halcyon days of unending airline commissions to today’s “nett fare” environment.

“You pay me a fee for me to tell you, independently, that the best way for you to travel is by utilising the carrier/hotel/operator that pays me the most commission,” is not really a solid business model.

It is not a defensible position were it ever to be legally challenged, but it is a position that every single travel agent finds themselves in on a daily basis.

And frankly, from the time that the profession was crawling out from under United Airline’s 2.00pm fax (does anyone else remember that watershed moment?), we have been setting our remuneration on the fly, and based on “what we can get”.

This is, of course, an exaggeration, but not a large one. The simple fact is that clients have no clue what we do and by and large, nor do the agents themselves.

Travel agents are important. They act as interpreters of movement within an impossibly complex world, they are supposed to understand and counsel  the High Theology of international politics, climate variation, currency controls, transportation schedules and a myriad of other arcane pieces of knowledge that are dealt with on a daily basis.

The remuneration, however, is even murkier. A price is quoted by an agent for a specific product at which they can make some money; be this a cruise or a small hotel in Corsica, the principle remains,  each and every product in the world has a price on The Web, and it doesn’t take their clients long to find it. And it is frequently more than the agent has quoted.

And here is the problem; until travel agents distinguish between the architecture and the construction of their product (clients’ trips), there will never be peace, and deception will reign.

Vast amounts of expensively-acquired knowledge are being compensated by a mark-up on a remote (but possibly wonderful) bed & breakfast. Agents are being forced to deceive their clients by transferring their remuneration from their knowledge to the product.

They are not being paid to know that Corsica will fit their professional interpretation of their client’s needs, but are being compensated by adding €20 to the base price of any product in Corsica that can be prepaid; and it is a base price that is known by all who choose to look at the property’s website.

Agents who counsel a couple prior to booking a vacation at a resort on the Mayan Riviera, and whose knowledge is being sought to assure that the choice of resort fits the clients’ needs are not being compensated for that insight.

And here’s the thing; clients, inundated with fabulous photography and endless images of drinks with umbrellas are none the wiser! Often they don’t have a clue, and book based on what their neighbours like, or what day the flight leaves. Travellers want knowledge and are willing to pay for it.

It is time that the architecture and the construction are separated; professional agents with a suitably robust knowledge base should be able to commend up to $300/hour to counsel clients on a complex and expensive trip. After all, if one is going to spend several thousand dollars on a vacation, spending a few hundred with a competent professional is a quite logical and reasonable expectation.

The key, however, is the individual agent’s capacity and competency for counselling; and if there is none, then perhaps that counsellor should seek employment in an alternative field. Given the prospect of billing at $150 - 300 / hour, there is an incentive for travel professionals to invest in their own careers; becoming an expert in a region, a genre of travel or any other sub-speciality will pay off; agencies will grow to resemble professional offices, and this is as it should be.

We need to remember history, and how we came to this position. In Days of Yore, travel agents knew where the brochures were; clients wanting foreign travel had little alternative than purchasing through these specialists; airlines did not appoint agencies unless they wrote a paper explaining why their appointment would be of benefit to the appointed carrier. The profession was meant to be of incremental value.

Today, of course, everybody has access to the information, but not everybody has access to the interpretive skills necessary to maximise the benefit of this flood of facts.

This is the role of the travel agent; the interpreter and intermediary.

By offering clients the opportunity to take counselling and have a plan drawn up that they can purchase on a “cost plus” basis, many will take this option, and once again the agency will shine and be remunerated.

If there is a future in the profession, it is because we take the responsibility of representing our clients’ interests first. Our nominal principals, for whom we were agents in the past, and perhaps to whom we are still tithed, do not compensate us well enough for the servility that is demanded, and in fact, they compete with us for the very same passenger.

The future is in representing our knowledge to our clients, being remunerated for guiding them through the thicket of information and finally, if requested, to finalise these arrangements in the most cost-effective manner with all prices being fully revealed.

I for one am simply tired of the deception.

Sunday, May 17, 2015

Buying Travel on The Web

Here’s the thing.

When companies of whatever stripe and purpose spend millions of dollars on developing a website, it is done for one reason, and one reason alone: to maximise their profits.
When any one of us go on-line to search for an item of whatever purpose, it is for one reason: to minimise our expense, and the rather touching belief in the neutrality of the net leads to many unfortunate decisions

These two positions are, of course, mutually exclusive; while they may appear to combine, particularly in the rather naïve belief that some hold, from time to time, the truth is that for most people they do not. The on-line, world is inherently binary: you ask a question and you get an answer, and the entire promise that most companies base their product line-up on is that you don’t know the correct question to ask.

I love the internet, and I, and my many colleagues spend our lives using the deep resource base it offers to hone our skills and develop our professional knowledge. It is the same in every industry, and the extraordinary growth in our access to information is one of the marvels of the 21st century. It is, however, only information, and not knowledge.

For years, one of the most common questions asked of my agency was “What is the cheapest ticket to London?” Our answer was always “Where in London do you want to get to?” This gave us the opportunity to direct them to Heathrow, Gatwick or Stansted if appropriate, and offer a sound service.

The answers however were rather interesting; at least 50% said that they were not, in fact going to London, but to Hull or Birmingham or Cardiff or some other UK point. By telling us this, we were able to advise them to spend an additional $50 or so, and fly straight to a local airport, the existence of which had, to that point, been unknown.

Now, in our binary world, the same question will be asked and the correct answer given. However, it is the correct answer to the wrong question in so many cases. Happily unaware of the options that might have been better, our traveller trots off to London in ignorant bliss.

It is curious how many times that travellers have come to our agency to book travel within Australia having already found “a great deal on-line” for a ticket from Canada to Sydney. When the first thing they want to buy is a connecting ticket from Sydney to Cairns, and are advised that a “Canada to Cairns” ticket would have been the same price as the ticket to Sydney that they had just purchased, disappointment often set in.

It is not that the information is unavailable, and had they asked The Web for a ticket to Cairns they would have found out that it was the same price, it is that sadly, most people don’t know what to ask for.

The biggest problem, I believe, is that traditionally there have been a lot of very, very bad travel agents. It has not been a respected profession, and by and large, with virtually no entry requirements, it became a default career for friendly people who liked beaches and drinks with umbrellas in them.

This, fortunately, is a professional model that has, for a large part, passed on. Travel professionals are now considerably fewer in number, and those that remain do so because they offer expertise and a very valuable input into a vacation decision. More are also offering a pure consultancy, paid for on an hourly rate; this option, to pay $500 - 750 for four or five hours consultation on a trip that will cost some $15-20,000 is well worth the money; insight, expertise and the ability to synthesise the information that can be gleaned on-line is well worth the investment.

It also makes sense.

In virtually every facet of the travel world, be it airlines, accommodation, tours or whatever other service you can imagine, the cost of sale is between 25 and 30 per cent. This figure is a macro-number, and applicable to the overall cost of distribution, not the cost of any single unit. It make no difference if the money is invested in commissions paid to the network of brokers, wholesalers and retailers who make up the chain between a fishing guide in Nunavut and the client in Hannover or if the money is invested in sophisticated web presence and the associated costs of servicing enquiries and reservations. The number firmly remains stuck at 25-30%

So from the sellers’ perspective, better to build a web with which to lure then unsophisticated with promises of a better and cheaper life, last-minute deals or whatever gimmick they dream up then risk losing a client to the comparative consultation that the (good) flesh-and-blood travel professionals offer.

From the purchasers’ position, I would think that more thought should be given to the benefits of shopping at a store that discourages questions, and only offers comparisons based on its own sales algorithm.

After all, a major European airline did not pay a major on-line retailer £1 million per month for advantageous placement on their availability displays for nothing.

Neutrality on line? Think again!

Tuesday, May 12, 2015

Buying and selling Travel on the internet

I have been extremely remiss in failing to add to my blog for the past month.

Consider it a month’s vacation, or even a month’s block, but here I am again. It has been a very interesting period; I have been based at our rather peculiar house in Esperaza in the South of France,  first warding off the excesses of the local wine festival, then brief trips to London for family and philatelic reasons and then to Georgia to finalise our new company “Are Mare” .

It is the Yellow shop with the blue shutters!

 I have been working here, compiling a substantial proposal for a consultancy to work on tourism product development in the three northern Territories, designing some new tour programs for The Great Canadian Travel Company, (curiously) putting together a “supply chain” to deliver 5,000 metric tons of chicken-feed every month to Azerbaijan (some really odd opportunities come my way), and simply enjoying the burst of spring in the Pyrenean foothills.

The view from the office 

However, I have had time to get riled, and it is for you, my dear readers, that I am annoyed.

I have written much about the double-edged nature of the internet; it is an environment that has made so many completely suspend credulity and hurl themselves into this unregulated market with the most surprising gusto. It is a fine place; “things” of all manner are available, and because the common credo of “cut out the middle man and save money” is so simple, folks buy stuff by the ton.

It is also interesting to note how many folks hit the “buy” button at nine o’ clock in the evening, quite conceivably with a bottle of wine inside them, and at a time when their protective middlemen are presumably hitting their own “buy” buttons.

And now we find that the principals who have spent hundreds of millions of dollars/lari/euros or whatever designing their websites have done so for self-serving reasons. Shock! Horror! Their sole interests in designing their sites, and it is likened to a web for a very good reason, is to maximise their revenues, and lure you in.

It is not designed to minimise your expenditures.

Have you noticed how, during the purchasing process, the price or “availability” of the items, seats, beds or cabins that you are trying to buy changes? Sometimes discreetly with “Only two left at this price” appearing from nowhere, subtly telling you that you are on the right track, and should finalise, or more forcefully with a $10 increase in price?

Yesterday, a hotel I was looking at that initially offered four options only showed two (highest/lowest) ten minutes later; by resubmitting on a different search engine, I got the middle two quotes back and booked.

Well, "they" follow you; each key-stroke is measured, and with the new generation of phones, "they" listen to your calls, and will translate your level of excitement for an upcoming trip into another few dollars onto the room. It is quite extraordinary how much privacy we all give up by ticking the “I accept” boxes; a paradox considering how those self-same companies will give up no informations at all, citing “privacy issues”.

There is a weapon.

Each browser offers an “incognito” or “private browsing” option. These covers, usually used by folks trying to cover the tracks of their various fetishes that are so diligently pursued at work, are your friends. By going “underground” as you search the web for prices, these windows will (to a great extent) muddy your tracks and make you less likely to be followed.

And remember too that Google reads all G Mail, and then promptly sells the information thus gleaned of your upcoming trips, ideas or whatever else you may unwisely communicate in this electronic fashion to a wide range of suppliers who are eager to pay for such “qualified” customers.

And finally, should you wonder why it makes a difference to an airline or hotel where you live before you get a quote, it is simple. Certain markets are perceived to be more lucrative and North Americans seem to be the cherries on the cake.

If I were you, I would fib; tell them you live in Cameroon, and see what happens then.