Is your travel programme profitable · booking to be serviced by a TMC. That’s a predictable view...

OCTOBER 2013

g TMC services: It’s all about the transaction feeg Third-party distribution – what’s the cost?g 5 things suppliers do that drive meeting managers crazy g What you need to know when buying chauffeur services

Is yourtravel programme

profitablefor your TMC?

The partnership works both ways, says Nedbank’s Burnell

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October 2013 • TRAVEL BUYER 1

Contents

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Brought to you by Now Media, Travel Buyer + Meet is a professional travel publication aimed at South African travel procurement decision-makers in travel-buying companies. This publication aims to reflect an unbiased perspective of the corporate travel industry offering insight and tools encouraging readers to manage their travel spend better. Travel Buyer is the media partner of ABTA, ACTE and the GBTA

Comment:

WHAT I like about the debate on Managed Travel 2.0 (MT 2.0) currently is that the

question has finally shifted from whether the travel management model will soon be obsolete because of new technologies, to how these solutions can help organisations achieve their travel objectives more effectively, as the various views in our bumper TMC feature this month will attest.

A study worth reading is the new Carlson Wagonlit Travel study ‘Where now for managed travel?’ (p14) that suggests new technologies enabling travellers to book anywhere while their companies capture the booking data have become one of the hottest topics of business travel.

According to US travel industry analyst, Scott Gillespie, however, this particular CWT study is misleading in the sense that he believes it equates MT 2.0 with unmanaged travel. He was quoted as saying: “Managed travel, as defined by CWT, requires a booking to be serviced by a TMC. That’s a predictable view coming from a TMC, and a key to this study’s misleading conclusions. My view is that MT 2.0 does not require a booking to be serviced by a TMC. It can be, or not – it is up to the traveller to decide if there is value in paying the transaction fee.”

He says one of the keys to MT 2.0 is that travellers do need to book in ways that let the company capture the booking data quickly. “That is what makes MT 2.0 different from unmanaged travel. It’s what gives travel managers the ability to manage travellers in a MT 2.0 environment – with or without a TMC.”

This question – with or without a TMC – certainly dominates the stories in this edition and as Nedbank travel manager, Jenny Burnell, puts it so succinctly: “with the right value proposition, there may be room for a good TMC for a long time to come” (p 10). That said, corporate travel buyers also need to come to the party in terms of being good strategic partners for their chosen suppliers.

In my view, not only do open booking platforms require an open mind on the part of the buyer, booker and traveller, but so do the more traditional approaches and mandates for which there is still a requirement, a preference and a place.

And part of this would be moving beyond a fixation on the transaction – and the transaction fee.

All the best!

KIM COCHRANE([email protected])

COVER In our bumper feature on TMCs, we asked travel buyers how much their accounts were valued by their TMCs. All too often TMCs are measured in terms of whether they are good strategic partners for their clients but does this work both ways? Jenny Burnell, Nedbank travel manager, believes it does. She was photographed at the Nedbank head office in Sandton by Shannon Van Zyl.

Big issue 2Fragmentation in hospitality distribution could impact rates International Q&A 4Nomura International On the radar - TMCs 8• It’s all about the transaction fee• Is your programme profitable for your TMC?• How TMCs can avoid extinction• It’s official: corporates need TMCs• Travel managers sceptical about ‘unmanaged’ travel• The new face of the travel policy

Meet 22• MICE pricing: the murky waters of commissions • The things suppliers do that drive meeting managers crazy • Venue inspector: the new-look Protea Hotel Balalaika• Transport ideas On the radar - Chauffeur services 28What to know when buying chauffeur services On the radar - Sport as an incentive 33• What to know before organising a trip Deal detective 36Travelinfo’s latest top travel deals

PUBLISHER Kate Nathan GROUP PUBLISHER David Marsh EDITOR Natasha Tippel CONSULTING EDITOR Kim Cochrane EDITORIAL CONTRIBUTORS Linda van der Pol, Hilka Birns, Rachael Penaluna, Liesl Venter, Dorine Reinstein, Jeanette Phillips, Sue van Winsen DESIGN & LAYOUT Michael Rorke PHOTOGRAPHER Shannon Van Zyl SALES [email protected] ADVERTISING CO-ORDINATOR Courtney Canham SUBSCRIPTIONS [email protected] ANNUAL SUBSCRIPTION RSA R295.00 (Free to target readership only), African R680.00, International R890.00 PRINTED BY Juka Printing (Pty) Ltd PUBLISHED BY Travel & Trade Publishing (Pty) Ltd, Now Media Centre, 32 Fricker Rd, Illovo Boulevard, Illovo, Johannesburg, PO Box 55251, Northlands, 2116, South Africa. Tel: +27 11 327 4062, Fax: +27 11 327 4094, e-mail: [email protected], web: www.travelbuyer.co.za

What travel needs is an open mind

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2 October 2013 • TRAVEL BUYER

Big issue

ANALYSTS predict that within three to five years, the sector’s intermediary costs will have doubled.

As the ability of new intermediaries to stimulate significant growth in demand has thus far proved limited, corporate travel buyers could well see the result in higher accommodation rates.

Research undertaken across 25 000 US hotels in 2010 revealed the following breakdown in reservations sources (with still surprisingly low utilisation of digital channels in such a sophisticated market):

Direct

Distribution channel Reservations Revenue

Direct to property (walk-in/contract/meetings)

51,4% 45,9%

Brand.com(thehotel’sownwebsite) 16,4% 18,5%

CentralReservations 13% 17%

IntermediariesOnlinetravelagencies(OTAs) 11% 7,7%

Globaldistributionsystems(GDSs) 8,3% 10,8%

Research undertaken by the American Hotel & Lodging Association (AH&LA) and STR Published by the Hospitality Sales and Marketing Association International (HSMAI) Foundation

Protea Hotels’ strategic development and revenue director, Bryan Mulliner, has compared the breakdown to the South African picture and finds its similar. ‘Direct to property’ records a 56% share of demand in this country and ‘Central Reservations’ comes in at 16%. Protea’s group-specific figures show the GDS share to be slightly higher too, while brand.com and OTAs reflect a lower percentage.

The South African hospitality sector currently processes the majority of its business through direct channels but third-party intermediaries in the digital space are increasingly fragmenting distribution, at rising cost to property owners. By Michelle Colman.

in hospitality distribution could impact rates

Fragmentation

It stands to reason, then, that the hospitality sector would encourage bookings through direct channels, where yields are undiluted by the referral, service and bill-back fees of GDSs, travel management companies and other intermediaries. Additionally, with brand.com websites, the control of rates and inventory is easier and properties can track where a client is spending, on what products and how much, on a single channel.

The local hotel industry, however, appears to have adapted to the fragmentation, taking the ‘place for everyone’ approach.

Protea Hotels’ stance is that the group’s inventory must be available wherever the guest needs it. The right product, though, must be exposed to the relevant market through the relevant channel. In SA, where 65% of the hospitality sector’s business is generated by the corporate domestic market, the GDS is key.

Says Mulliner: “We acknowledge that the TMC is going beyond

making a booking to managing an account, and to book a full trip on one PNR offers them more flexibility and convenience than using separate booking tools.”

Tsogo Sun, too, practices a broad-based distribution policy, taking the view that each channel must have a clear purpose and revenue strategy. Director of revenue, Sandi Macfie, concurs that most bookings continue to be made directly with the group’s hotels and call centre. The corporate and government sectors, however, favour the GDS/TMC channel.

The group aims for consistency

of corporate rates, irrespective of the channel and its cost. “Of course we like to encourage direct bookings but that doesn’t mean to say there isn’t a cost involved,” she says, referring to staff and operational expenses. Where a client displays price sensitivity, however, the benefits of reservations via a brand.com and loyalty programmes allied to direct channels are pointed out.

The use of third parties, states

Macfie, is aimed at extending reach, particularly into markets where Tsogo Sun is not represented. “There’s room for everyone. We take cognisance of what other channels offer and we benefit each other.” She expresses some relief that third-party distribution costs have been kept under control in SA. “In the US, there are independent hotels that are paying up to 40% to OTAs.”

Pros and cons for corporate travel buyersA snap survey of corporate buyers/travel managers revealed a favouring of TMCs (and thereby the GDS distribution channel) when it came to hotel reservations.

They cited convenience, one point of contact, negotiated rates and cost savings, as well as adherence to company policies as the advantages. One manager, however, highlighted the burden of keeping a check on his TMC’s spend, ensuring negotiated rates were optimally utilised and business was directed to preferred suppliers.

A procurement manager at a university in Johannesburg reported making hotel reservations both through a TMC and direct, utilising hotel websites. While the TMC route was convenient, in the instance of international bookings, the TMC worked through tour operators whose choice of hotel locations was not always suitable, specifically in Africa. Further, online rates were often lower, although the issue of verifying

Protea Hotels’ stance is that the group’s inventory must be available wherever the guest needs it. The right product, though, must be exposed to the relevant market through the relevant channel. Pictured: African Pride Melrose Arch Hotel, Johannesburg.

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ALTHOUGH on the rise, OTAs do not generate the share of business their high profile seems to indicate. But it is in this visibility where their impact lies, offering a marketing function with considerable reach, believes Mulliner.

According to the AH&LA/STR study, OTAs have consumer media budgets that outstrip the US’ most powerful hotel brands. “They can give us exposure in areas we are not represented,” states Mulliner. “In the corporate space, however, they are not strong and we would not expose corporate rates through this channel.”

Synonymous with discounted accommodation, OTAs have made inroads into the economy accommodation sector. Properties in the mid to upper grades, however, tend to reject discounting

for loyalty programmes and incentives.

But the future of distribution could well be in the hands of large metamediaries, digital giants who have the ability to aggregate on a large scale and own the three Cs necessary to dominate cyberspace’s search and social media spheres – content, communities and connectivity. Mulliner names Google, Facebook, Microsoft, Amazon and Apple as potential candidates.

Such metamediaries have the power to bias search results, influence competition and expand their roles in travel planning. Some are already dabbling in travel and with access to massive credit-card databases, deep pockets and a high level of consumer adoption, they can expect to gain traction with speed. g

EXPANDING hotel inventories are significant features of the industry’s reservation systems. Travelport’s Rooms and More and Amadeus’ Linkhotel incorporate all types of accommodation – hotels, B&Bs and guesthouses.

Cindy Chaplan, Amadeus’ communications manager, explains that Amadeus’ distribution strategy is to ensure travel sellers have a deep choice of relevant accommodation content coming from multiple sources. Here a key focus is on eliminating current expensive, labour-intensive hotel processes.

“For our hotel partners, Amadeus ensures unique access to a huge international audience of travel sellers and TMCs giving them maximum visibility through point-of-sale solutions, plus additional merchandising options to capture increased bookings at key points in the shopping process.”

Chaplin summarises the advantages of Linkhotel for the TMC as speed, productivity and accuracy. A TMC can make a hotel booking in just seven seconds, she states, pointing out that ‘smart keys’ can be programmed for additional rapidity.

Chaplin states that it is corporate demand for B&Bs and guesthouses that has driven the incorporation of accommodation other than conventional hotels into these inventories. Acknowledging that content is king, and that many independent facilities do not have their own online-booking capability, the GDSs have worked with aggregators to ensure their listing.

The benefit for aggregators is an online booking engine – previously users of aggregator sites were directed to e-mail a property direct for a quote. For individual properties, the gain is global distribution at no extra cost. Other than their annual fees to aggregators, no additional cost is leveraged on participating venues.

Similarly, these GDS inventories make the properties of large aggregators abroad available to local corporate travellers and TMCs.

By virtue of a property being represented by a number of aggregators on a GDS, each with its own solutions, TMCs may find the same hotel available at varying rates with a variety of inclusions. A savvy TMC will shop around for the best deal.

credit-card details prior to check-in contravened university policy.

“Our strategy going forward is to use an online booking tool to eliminate some of these issues and make bookings from one central portal,” she said.

A travel buyer in a cosmetics company reported that 99% of her accommodation bookings were made directly with the properties concerned. “Our travellers visit the same areas frequently and have preferences for certain accommodation

vendors. As a result of a good relationship built over time, some vendors offer us corporate rates.”

She listed the advantages of going direct as no service charges, bill-backs and unplanned expenses. Travellers settled direct and claimed back from the company. The vendor did not have to wait for payment, and the company’s finance department kept its creditor numbers down. On the downside, the system was manual and consumed more time than an electronic booking system.

The age of the metamediary

The GDS: content, speed and accuracy

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International Q&A

Q: What is the challenge facing UK and European travel buyers at the moment?

A: I think for me the biggest challenge is the number of changes we have witnessed in the airline industry in the past year. There are quite a few companies forming alliances, joint ventures or mergers and it has become difficult to understand the complexities of this in terms of pricing and structure.

The second thing is the management and ownership of data. Who has access to our data and how is it managed? There is a lot of talk about ownership of data currently. How

are our bookings being channelled through to the airlines and what are they doing with this data? We want to make sure that we have a clear understanding and that we do not agree to terms and sign contracts that will enable the airlines to have an advantage over the organisations.

Q: How are you responding to these challenges in your travel programme?A: In our own organisation, we are working quite closely with our airline partners to make sure we structure our programmes so that they are beneficial to our company. We monitor airlines and meet with them on a regular basis to ensure we have a clear understanding of where the airlines are going and of industry developments. We then align our findings, as appropriate, to our airline programme. We do not just rely on the deals the airlines offer us today, but see our airline programme as a work in progress that is continually evaluated to ensure we maintain a competitive and traveller-focused offering throughout the term of the agreement.

Q: What changes did you make to the existing travel management programme at Nomura when you took on your role?

A: I made a lot of changes in terms of our TMC structure. We have a completely new management and team structure. We also improved on the developments of our consultants so the service we receive is at a much higher level. We have a mandated policy for both air travel and hotels, which has enabled us to see significant savings for the company. In conjunction with my team, we have also increased the usage of the online booking tool adoption rate. We implemented these changes to reduce costs and improve efficiency as well as to increase the service levels. My initial travel survey, when I was engaged, highlighted that the service we were getting from our TMC was poor to average. We are now seeing a survey response of good, demonstrating that we are definitely reaping the benefits of these changes.

Q: What do you consider to be the key elements of a successful and sustainable travel management programme?A: I think the key element is not thinking that one size fits all. Make sure that you have a clear understanding of your organisation’s traveller culture, traveller patterns, what the business is doing, what they want and the overall organisational strategy. Armed with this information, align your travel programme as appropriate, considering at all times the key cost elements without trading off on service, on what is logical and on the most efficient travel choice.

Q: What top pointers would you offer travel buyers with respect to how to set up an efficient travel management programme?A: Have clear objectives and strategy in all areas of travel: airlines, hotels, ground transportation and travel services. Review and establish your technology needs. Don’t believe that because the market dictates something, that this is what you should be doing. It might not be right for your organisation. Analyse what is needed to make your company work effectively and then go to market or network with your peers to gain more insight and knowledge before making decisions.

Q: You have been appointed in an advisory role at the Business Travel Show to highlight the issues that are truly important to travel buyers. What would you like to see discussed at next year’s event?

A: For me, the most important issue is to focus on data and how a company’s data is managed. Ask questions such as: how do we know our data is being managed in a professional way and that it is not distributed to everybody? We also need to make sure the data we release is not being

LONDON-based Carol Neil has worked in the travel industry for 13 years. Two years ago, she assumed her current role, where she is responsible for the delivery and development of all travel services to Nomura Group companies in the EMEA region as well as the management of all related personnel, vendors, technology and expenditure.

This year, Neil was appointed as board director for ITM, the recognised body for business travel in the UK. She was also appointed to the Business Travel Show board for 2014.

Prior to her position at Nomura, she was the EMEA travel manager at UBS. From 2006 to 2008, she worked at Lehman Brothers as category manager, where travel was one of her many areas of responsibility.

Nomura International Unveiling travel management challenges in the UK

Dorine Reinstein speaks with Carol Neil, head of corporate travel EMEA for Nomura International plc., Asia’s global investment bank.

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The Kievitskroon hotel, Pretoria, a 4 star luxury hotel & spa will play host to 120 senior professionals in the travel and meetings industry. Following suit on a global scale and aptly entitled ‘No Boundaries’, 2013 is being designed to offer delegates an interactive, innovative education and development alike to no other event in the region.

The GBTA has designed a conference programme packed with new and inspiring speakers, topics to stimulate debate and workshops tailored to provide practical tools and resources that delegate can take away and use in their businesses.

Over the course of two days - two evening networking events and two days of educational content, this year’s

conference will not disappoint. Content is driven by experts in their fields and is designed to cover topics that are relevant to your development and delivery within your roles today and tomorrow.

About the GBTA Southern Africa conference 2013

Who Should Attend and Why?

It is recommended that the following type of people should attend this event:

Travel Managers responsible for travel

Procurement responsible for travel

Travel management company staff

Technology providers in the sector

Supplier representatives in the sector (air, rail, private charter, ground transportation, hotel and accommodation etc.

Our conference attracts the travel policy and supply decision makers and high level travel professionals, however for beginners, we recommend the Fundamentals of Business Travel Management on 22nd October, 2013 to get you up to speed with business travel needs prior to the conference.

Contact: Jacky MaulgueTel: +27 11 452 8337 | Fax: +27 86 273 1798 | Email: [email protected]: www.gbta.org/southernafrica

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used against the travel buyer as opposed to supporting the buyer. I think data is a massive thing for most of the travel buyers. That is probably the key.

The airline industry is also an important issue. How are the joint ventures, alliances and mergers going to pan out in the future? Is it going to be detrimental for the buyer? Are the airlines going to come to some sort of fair way of working with the buyers? Delta Air Lines and Virgin Atlantic Airways are joining forces: how will that impact the current relationships in place with these airlines?

Q: You have also been appointed to the board of directors at ITM. What are your plans for this appointment?

A: I think my role in ITM is to help grow and create a better awareness of the institute. I would like to play a mentor role for up-and-coming buyers and ensure that ITM is constantly providing buyers with leading travel information. Through ITM, I would like to be one of the voices for travel buyers. I also wish to work closely with suppliers to ensure they have the ability to engage with the buyers at the right level and give the right information. My role will be about marketing and sharing material information about ITM with current and potential members.

Q: What have been your greatest achievements in your role so far?A: I think my greatest achievement is coming in and reshaping the whole travel

position within Nomura and giving it a place within the company, not only internally but also externally through my positions with associations such as ITM. I am now known by a number of people in the industry, which means they also know of Nomura travel and my excellent team. That has been my proudest moment.

Q: What are your plans for the future?

A: I think we now need to take the travel programme in Nomura to another level. We need to enhance some of the things we do with our TMC, air, hotel, serviced apartment providers and technology, hereby further improving the service and reducing overall costs for the company. g

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On the radar - TMCs

IN his travel blog Gillespie’s Guide to Travel +Procurement, US author Scott Gillespie predicts quite a shake-up for the TMC business model, the core of which is the

booking transaction. In a recent post he wrote of this transaction: “It’s the centre of the TMC’s universe. They organise and price their business around this function. Everything else is basically an ancillary service. It’s all about the transaction fee.”

He holds the view that to the client, the transaction fee is a red cape to a bull, a highly visible target, something to attack. “And what’s worse, from a TMC’s view, is that many clients expect everything to be included in the transaction fee – for free.”

Gillespie proposes a radical change of focus; in fact he says this change is unavoidable for two reasons – consumer travel tools available to the public will improve faster than corporate travel tools, attracting corporate travellers to these self-booking sites. Further, corporates will develop technology to capture booking data, irrespective of the channel on which the bookings are made.

His suggestion is that the core mission of a TMC should be traveller safety and service. “Focus instead on knowing how to protect and serve travellers through the trip cycle,” he says. “I see a future where TMCs bid to protect and serve travellers of a company in the same way a healthcare insurance company does. The bidder sizes up the travelling workforce, understands the travel patterns and booking paths, and quotes an all-in transfer safety and service fee. Maybe it is $200K or $2 million – but it isn’t a $20 transaction fee.”

Weighing up the views of local TMC representatives and corporate travel buyers, such a revolution is far off. Transaction-fee pricing will remain the anchor of TMC remuneration structures for the foreseeable future.

Jim Weighell, Sure Travel’s corporate manager, believes this fixation on the transaction masks the value of the relationship

the TMC offers the corporate client. It positions TMCs as booking facilitators, rather than providers of a professional management service. Its perceived importance is perhaps a hangover from the days when commission lost its role as the dominant form of TMC remuneration and TMCs had to justify their implementation of service fees to clients.

The following remuneration models, and combinations of them, are applied locally:• Transaction fee-based pricing. There are

two types, one being individual transaction fees where each product or service is charged for at a rate dependent on the complexity of the service. The other is the bundled transaction fee, where a single fee is charged per booking and may include air, car and hotel reservations. An international booking may incur a higher service fee than a domestic booking. Services are charged as consumed.

• Fixed monthly retainers based on an organisation’s travel patterns. They may cover unlimited services, or stipulated core services with ancillary services attracting additional fees.

• Management fees based on a percentage of travel spend.

• Automated solutions where online booking tools – either developed by the TMC or subscribed to, are made available to the client. The clients pay implementation fees for site development, monthly or annual subscription fees for access, and service fees for low (automated) or high-touch

(manual intervention) transactions. Training is offered too. The advantage of this model is that it keeps costs down for the TMC, especially nationwide chains that can reduce their number of offices.

• Joint venture or ‘hybrid’ models. These are relatively rare and found in various forms; for example, a company may start its own travel office, yet linked to a TMC service provider with negotiating power in the background.

Some TMCs speak of these models as offline and online service platforms. High-touch transactions – much like traditional travel management, requiring the services of travel consultants – characterise the former. Low-touch services typify the online platform with its OBTs, requiring less consultant input.

According to Claude Vankeirsbilck, chief sales and marketing officer at Tourvest Travel Services, clients who have centralised financial structures will opt for management-fee agreements, while those with decentralised services prefer transaction fees and make payment at the point of sale.

Monique Diez of MD Dynamics consults to corporate clients and local TMC groups. She expresses surprise at the number of management-fee agreements still in force, many at the 7% level where domestic airline commissions were once pegged. “There is the perception that the majority of corporates have opted for the transaction fee route with nett rates, but that is not entirely the case. Many corporates are happy to pay a percentage management fee, provided it is linked to exceptional service received from TMCs.”

She points out further that cost-saving incentives are still prevalent in the models listed above, as are risk/reward incentives linked to service level agreements (SLAs).

Although far less significant than in the past, commissions and overrides still come into play. Weighell says their advantage is that they do keep fees down.

Michelle Colman assesses current – and evolving – remuneration structures in SA’s business travel sector.

And what’s worse, from a TMC’s view, is

that many clients expect everything to be included

in the transaction fee – for free.

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TRAVEL Buyer surveyed a group of travel procurement managers on types of management agreements in place, and their satisfaction levels.

Kovilan Naidoo, travel manager – Africa, Cummins Business Services, is happy with his transaction fee-based travel management plan. His company uses a global TMC, American Express, and is serviced by local partner Tourvest Travel Services. Happy with the remuneration structure, Naidoo says his challenge was to become familiar with service fee structures in local markets, and negotiate them in line with these conditions.

A procurement officer with one of the country’s largest banks states: “We currently work on a transaction fee per transaction and have a price list dependant on the service required. There is a different pricing structure for online and offline reservations. It works well at the moment although we do need to audit once in a while to ensure that the correct fees are being charged for the services being used.”

States John Gawler, group procurement manager for Kansai Plascon: “We have a fixed monthly fee for all work the TMC does for us. This includes a full VIP programme and all ancillary aspects of travel including visas. We are extremely happy with this payment structure. It provides certainty around our cost of travel and removes all ambiguity as to who is responsible for which portion of any bill. For example, if a traveller is booked into a hotel on a bill-back basis, the traveller settles the bill. Is the TMC entitled to claim the service fee?”

RECENTLY an online UK travel management service, Click Travel, trialled a per booker user fee. It found that clients preferred the option of an organisational fee, irrespective of number of bookers.

Too much transparency

Travel buyers respond

THERE is still too much emphasis on unpacking remuneration structures, according to Claude Vankeirsbilck, chief sales and marketing officer at Tourvest Travel Services.

“Which industry is forced to show a client what its profit margins and cost structures are? The travel industry has been too open and generous in revealing their structures and this has become the norm. The industry has shot itself in the foot by being way too transparent.”

He believes this openness comes from operating in a once commission-based environment where service and professional fees did not apply. When the environment changed, TMCs were pressured by clients to defend the new business models.

“The time has come for the industry to challenge the thinking that we must show our bare bones. Successful TMCs have been able to demonstrate real value and the majority of corporate clients are still outsourcing their travel,” he states. “The TMC-client relationship should be less about the transaction and more about the value – the added services the TMC offers such as management information, duty of care, security and tracking, advisory services and benchmarking traveller behaviour.”

He says the longer the term of the agreement with the client, the more investment the TMC will make in the relationship. Tourvest Travel Services’ longest enduring agreement is in excess of 15 years. The company increases fees annually by the consumer price index (CPI) inflation rate.

“We are not too far behind global trends in South Africa. There’s nothing to suggest that these models will change,” he concludes.

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On the radar - TMCs

WHETHER a corporate travel programme is profitable for a travel management

company (TMC) is a question best answered by the TMC in question, believes Jenny Burnell, travel manager, Nedbank. That said, however, she does believe the bank’s programme is profitable for its travel management partners.

“A few years back, the Nedbank Travel Desk was established to book the bulk of the bank’s domestic travel. Nedbank appointed two TMCs to book the residual domestic, regional and international travel. The expenditure on this portion of business travel is significant, ensuring strong revenues for both companies.”

Felicity Meyer, travel manager, Massmart, says she is not sure she can answer the question objectively considering the corporate travel department (CTD) model the company utilises. “I assume so otherwise why would our TMC continue to partner with us?”

Sharon Pillay, category manager: Procurement at the University of the Witwatersrand (Wits), says since travel is a high-spend category in the university, the volume of transactions makes travel a highly profitable programme for the TMCs. “We have good partnerships with our TMCs who are both successful in their own right. I believe they value our business and provide various services that are beneficial for our travellers.”

Burnell continues that the relationship with both TMCs is actively managed through monthly meetings. “Furthermore, the value of having Nedbank as a client

cannot be underestimated, as this often results in winning other business for the TMCs concerned, thereby further contributing to revenue and ultimately profitability.”

As a travel management company that specialises in government, oil and gas, and high-touch corporate travel, Wings Travel Management looks for companies whose industries align with its niche specialties, advises Simon Phage, chief operating officer. “When a TMC develops itself as a specialist, its clients expect an exceptional level of industry knowledge, customer service and expertise.”

Phage suggests that all companies – even TMCs – need good suppliers. “And once you find one, you don’t want to let it go. When a corporation realises that a TMC brings value to the relationship, it should invest time and effort to keep that business relationship in good working order. That may mean making time for meetings with your TMC partners to keep them updated in terms of changes to your travel programme or traveller requirements. The payoff will be a mutually beneficial relationship with a supplier, in this case your TMC, that has proven itself a valuable team member.”

Burnell believes with the right value proposition, there may be room for a good TMC for a long time to come.

Are you a good strategic partner?“I would say a resounding yes,” says Burnell. “Travel directly affects Nedbank’s people and its business. We have always

engaged with our TMCs and value their contribution to Nedbank’s success.”

She continues that there are a number of criteria that determine the nature of a buyer-supplier relationship. “Amongst the most important elements are trust, sharing information, reducing risk and cost through innovation as well as sound processes that are jointly created and managed. The TMCs also act as our business continuity partners when the Nedbank Travel Desk experiences excessive demand. I believe this describes a strategic relationship that we enjoy with our TMCs and we value the open and honest relationship we have with them.”

A successful partnership should work both ways, elaborates Pillay. “A strategic sourcing process is completed with set criteria that would define a good fit for the university. This is followed by a tender process to select a suitable TMC and a contract negotiation concluded to ensure strategic objectives are met.”

Meyer agrees: “What kind of business relationship survives a one-way relationship?” She says she works hard to be a good strategic partner. “Mutual respect of the challenges facing both parties is important but respect for limitations and the realities of what can be expected from the partnership is important too.”

For Phage, a good relationship between a TMC and its corporate client will develop into one of trust and reliability – on both sides. “A TMC hopes that its clients will keep the lines of communication open. This helps the TMC to customise its service delivery around the client’s changing needs.”

Jenny Burnell, travel manager, Nedbank

Sharon Pillay, category manager: Procurement, Wits

Simon Phage, chief operating officer, Wings Travel Management

Felicity Meyer, travel manager, Massmart

Is your programme profitable for your TMC?How much does your travel management company value your travel account? All too often TMCs are measured in terms of whether they are good strategic partners for their corporate clients but does this work both ways? Words by Kim Cochrane.

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What can buyers do in terms of best practice to become a sustainable account?

Burnell firmly believes that building excellent working relationships with the TMC is essential to any successful travel programme. “Keeping the TMCs informed and involved early is also vital. This includes performance feedback, policy creation and development as well as sharing organisational plans where appropriate. Both corporate travel buyers and TMCs must be ethical, honest and fair in all their dealings. Buyers should also be reasonable in their requests and demands of the TMCs.”

She believes Nedbank would not have been successful with its vision of insourcing domestic travel bookings without the support of its TMCs. “I also believe our TMCs are staffed with travel experts who are there to guide us in making smart decisions.”

Pillay agrees: “A valid contract negotiation strategy must be in place to benefit both parties. Another best practice would be to have effective service

level agreements to measure supplier performance.”

Buyers should not abdicate responsibility for travel, adds Meyer. “Your TMC cannot be your policeman, banker or decision-maker. Good strategic partners are exactly that: good partners. If a true partnership, mutual respect and genuine transparency exists, it is (as with all relationships) a match made in heaven. If any one of these criteria is broken or damaged, the result will be one of discord and the account will become more difficult to service and work with, less profitable (the cost of servicing the account will increase) and ultimately the client moves on to the next TMC.”

When should TMCs walk away from corporate business?Very simple, says Meyer. “When it becomes unprofitable.”

As travel technology and globalisation evolves, transactional revenue may start to diminish, suggests Burnell. “TMCs should perhaps focus on building practices and demonstrating value by providing, for example, consultative, risk management,

policy and advisory type services. Other strategies may be to create other revenue streams by, for example, diversification or focusing perhaps on meetings, incentives, conferences and events (MICE). Unless there is some sort of action taken, TMCs will find it difficult to maintain revenue and hence remain profitable.”

TMCs, continues Burnell, may consider walking away from corporate business:• that is no longer profitable or has no

potential to be in the foreseeable future• that imposes unreasonable demands

on their resources without appropriate reward

• that is excessively bureaucratic• where cultures may start to clash• where trust or the relationship between

the parties has irretrievably broken downAccording to Pillay, TMCs should walk away when corporates do not implement best practices and no formal working procedures and processes are in place, i.e. a travel policy. Other deal-breakers could include excessive binding terms and conditions, competitive agreements, non-payment of the account or that the TMC cannot meet customer expectations.


http://www.clubtravel.co.za

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On the radar - TMCs

FOR success in the information age – and ultimately to avoid extinction, travel

management companies (TMCs) need to provide wisdom, not information, to their corporate clients, believes Dr Roderick Ross, ceo, TravelLinck International.

Speaking at an ABTA event in Johannesburg recently on the topic of whether technology could lead to the extinction of TMCs, he said: “There is a lot of data and information out there. TMCs need to move above that to provide wisdom to their clients. Technology is simply a way for TMCs to evolve and meet their customer needs better.”

He listed ‘wise areas’ for TMCs to understand and increasingly focus on as:• Corporate supply chain (before

and after the transaction)• Corporate software systems

(e.g. ERP, e-procurement)• Door-to-door travel and

expense management• Actionable business

intelligence• Traveller satisfaction• Communication trends• Strategic sourcing and

benchmarking• Up-skilling staff• Management consulting and

business analysis• Payment technologiesWith jobs that had become extinct – such as elevator operators, lamp lighters and bowling alley pinsetters – there were also jobs that didn’t exist ten years ago, such as social media managers, app developers or sustainability experts, he highlighted. As an example of a

travel agency that had survived the years, Dr Ross mentioned Cox & Kings, which claimed to be the longest-established travel company in the world. Its history began in 1758.

Looking at futuristic technologies other than software that he believed could ‘rock the boat’ for TMCs, he noted quantum teleportation, teleportation, holograms, Telepresence and the Hyperloop (a theoretical mode of high-speed transportation).

But looking back at the histories of travel software and the internet, and combining the two, he said travel was the success story of the internet and the largest sales category by far. According to Plunkett Research, online travel sales represented 35% of all ecommerce sales (2013, US data only), he added.

By Kim Cochrane

• Genetic pollution (i.e. inbreeding): don’t hire everyone who is the same – look to the recent movie about Google, The Internship, as inspiration!

• Habitat degradation (e.g. toxic working environments)

• Predation, competition, disease

• Co extinction • Climate change (e.g. shifts

in the environment, such as airline commission capping)

• Mass extinctions (freak things you don’t see coming)

What to watch for...

GRAPHIC: DR ROD ROSS


How TMCs can avoid extinction?

http://www.americanexpress.co.za

http://www.americanexpress.co.za

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On the radar - TMCs

RESEARCH by Carlson Wagonlit Travel (CWT) has revealed that travel managers remain sceptical about loose travel policies, an approach to corporate travel that allows travellers to book through any channel.

Only 9% of surveyed travel managers say they are in favour of unmanaged travel, compared with 62% who are against the idea. Some 87% say their companies have not tried unmanaged travel and have no intention of doing so. Of those who do intend to pilot a more relaxed booking approach or have already done so, most stated it was to increase traveller satisfaction.

The research also showed that 45% of CWT’s global bookings were for complex, multi-segment trips and 45% of its European reservations were changed before or after ticketing, indicating the need for close traveller support.

Other findings demonstrate that fully managed travel programmes are more user-friendly, cheaper and represent a more effective way to tackle programme leakage; the results of three independent studies confirmed that fares

booked through TMC channels cost 9%-24% less than fares available in the open market.

In addition, while there has been much discussion around companies wanting to adapt to Gen-Y travellers by giving them more freedom in the booking process, CWT data shows no significant difference between age groups when it comes to booking behaviour or preferences.

Find this latest CWT report, ‘Where now for managed travel?’, on www.carlsonwagonlit.com and on the free CWT Reports app.

IT may not be news to the industry but now it’s ‘official’ – TMC services are vital to corporate travel managers.

A recent study by GBTA and Egencia found that the majority of travel management companies in Asia, North America, Latin America and Europe were working directly with travel buyers to play an increasingly important role in implementing, improving and successfully operating global travel programmes.

Key capabilities for travel

managers included TMCs’ industry knowledge (96%), access to local rates (93%) and combined global coverage and local footprints (89%). Some 1 429 travel buyers were surveyed.

“As multinational corporations operate across the world, they are enlisting the help of TMCs to bolster their programmes by leveraging TMCs’ regional expertise and technology offerings to help them manage travel spend more strategically,” says GBTA vp of research, Joseph Bates.

Travel managers sceptical about ‘unmanaged’ travel

It’s official –corporates need TMCs

New technology solutions support managed travel in different ways.

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On the radar - TMCs

THE idea that traditional travel management (Managed Travel 1.0) as a concept utilises ‘old’

principles that can result in traveller friction particularly for frequent travellers, lost productivity and a reluctance to travel, was one of the issues discussed at a recent ABTA forum by Chris Pouney, director: Business Travel at Severnside Consulting UK.

He said companies that had effectively managed their travel according to traditional methods were now struggling with diminished returns, which is where Managed Travel 2.0 philosophies could have a role to play as a more open management approach, although he did have his concerns.

Referencing companies where bookings were made through multiple channels and data was provided back to the travel programmes, he elaborated that this strategy actually ‘rewarded’ travel and did nothing to manage demand for travel. “As an example, the company drives

savings through establishing caps based on reasonable spend and the savings are put into a pot to be shared with staff to allow for upgrades of future trips or given to a nominated charity.”

Other criticisms of this approach included reduced leverage for supplier deals if buyers were not influencing ‘pre-trip’; that staff spent too much time on travel agency work and not enough on their own; potential personal taxation issues; too much trust of employees and that the approach only really worked for largely US domestic travel programmes where hotels were ubiquitous and negotiated savings were all but eliminated.

Elaborating on the topic of the new face of the travel policy: traditional versus new age, he said most business travel programmes bore resemblance to Douglas McGregor’s Theory X – a theory of human motivation created and developed in the 1960s, which limited and phased out creativity.

Theory X basically implies that employees are inherently lazy

with little ambition and that they dislike and avoid work as well as responsibility, which is why management needs to control them closely. Theory X managers rely on threat and coercion to gain compliance, all of which leads to mistrust and poor motivation.

He said by assessing McGregor’s two contrasting models of motivation (Theory X and Theory Y), travel buyers (and their TMCs) could consider the theoretical concepts to re-think the way they managed their travel programmes. In Theory Y environments, management

assumes employees may be ambitious, creative, self motivated and that they exercise self control in line with organisational objectives.

The global viewIf the cost of administering a travel programme is more than the benefits delivered, then it is not going to work, according to Pouney. “You need to apportion a value of safety, policy compliance and booking efficiency.”

He said in the US, mature travel programmes with mostly

The new face of the travel policy

By Kim Cochrane

Traditional

InfrequentDigitalnatives

Policy / Process

• Hand holding• Guidance• Support

• Controls• Stability• One-stop shop• Security• Privacy

• Freedom• Options• Autonomy• Instant gratification• Simplicity• Mobile

Chris Pouney: What policies do you have to support different travellers?

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domestic travel were heavily investigating the use of open-type platforms and while there was some interest in Europe, large international spend precluded the use of these type of platforms. “Safety and corporate manslaughter fear still drives the move towards more traditional programmes but they are managed through mobile. In the APAC region, a large waitlist culture is slowing down innovation in this space and in Africa, you are well placed to drive innovation globally.”

With open platforms designed to give travellers, especially digital natives or Gen-Y employees, the freedom to book without the many typical constraints, before making any decisions as to the suitability of such an approach, buyers needed to understand their companies and travellers better, he said. In Pouney’s view, there are three types of travellers;

traditional, digital natives and the infrequent. “Do you know what kind of company you are? What policies and processes do you have to support different travellers? If you are a company of digital natives, then that should be taken into account in policies. Review your current programme. Do you really have a handle on leakage?”

Pouney referenced the latest Carlson Wagonlit Travel (CWT) study entitled ‘Where now for managed travel?’ (p 14), which looks at ‘rogue’ spend (bookings outside TMC channels), new booking technologies and the future of business travel programmes.

He referenced the CWT finding that 60% of travellers said they would continue to use a TMC often or very often even if they had the freedom to book elsewhere. “Alternative booking channels may not provide the same level of 24/7 support.”

A RECENT survey conducted by Kitso Consulting amongst a number of key blue-chip corporate organisations within South Africa has highlighted the increasing focus on attaining a form of global, or at least regional, alignment by global corporations operating within SA.

Almost 90% of the SA respondents indicated that it was a current or future objective of their parent companies to pursue a strategy of alignment that would be achieved through specific policy guidelines. Far from moving away from a mandated travel policy environment, local operations of global companies are increasingly governed by minimum global policy requirements that can be expanded on to take

into account local market conditions.

A typical example relates to the choice of suppliers and acceptable fares and rates, as more global companies move to negotiating favourable rates based on the consolidated global volumes across their business operations. It is also interesting to note that 100% of respondents indicated that determining travel policy and managing compliance was a standard role of the travel manager or corporate travel management function (from the client side). Anecdotal evidence also seems to suggest that operating in less regulated environments, where corruption and fraud is rife, or the risk is ever present, a mandated travel policy remains a necessity.


Mandated policy still preferred

By Kim Koen, head of Kitso Consulting, consulting division of HRG Rennies Travel

http://www.carlsonwagonlit.co.za

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On the radar - TMCs

WINGS Travel Management is expanding its presence in Africa with an office in Lagos, Nigeria.

“Wings has always been at the forefront of providing travel management in complex, challenging locations, so it was a natural extension of our global mission to strengthen our presence in Nigeria with this office,” said Tony Sofianos, chief executive officer at Wings Travel Management.

“Whilst we’ve had a presence in the region for some time, we recognise that oil and gas

exploration continues to drive the economy in Nigeria. Of course, oil and gas travel is our specialty, and we want our clients to be comfortable knowing that we have people on the ground 24/7, working on their behalf to make their travel as seamless as possible.”

He added: “Leaving the travel logistics up to us lets travellers focus on the job, rather than the details of getting to the job. Commuting to oil rigs, vessels and remote locations isn’t easy – but we do our best to make it look that way.”

SOUTH Africans are quick adopters of new technology and we will see some dramatic changes to the way corporate travel is managed in the next 18 months. I believe early adopters will help new players entering this market to sort out teething issues, as the costs of early adoption may be too high in terms of time, effort, cost and negative ROI for most corporates to invest in such solutions. It is difficult to see real ROI for these early adopters happening in the next three to five years.

Many travel management 2.0 tools are too expensive to employ and too difficult to manage in the small and mid-sized corporates. Larger corporates are having to insource travel professionals to help implement Managed Travel 2.0 inhouse. These up-front costs may be recouped later if all the benefits are realised or it may just be that TMCs again become a more cost-effective solution in the long run. Businesses spending less than R5m a month will find it difficult to find a rational ROI equation.

The effect of a brain drain

from the travel industry to inhouse travel management 2.0 will see cost push price-increase pressure on most TMCs and at the same time, the competition for travel experts inhouse will drive up costs and the risk of implementing such inhouse solutions.

When the dust has settled, it will be interesting to see if corporates have actually found a more cost-effective solution for their travel management requirements or whether the costs have increased substantially without real tangible benefits. Most managements are already stretched to the limit dealing only with their own core business problems. It is a bit like the buzz around online travel when online booking was going to solve all problems.

There may be more talk than action and where there is action there may be no real ROI. But I believe new effective, efficient and economic channels will undoubtedly emerge.

Only to be replaced yet again at a later stage.

Managed Travel 2.0: TMC view By Mike Gray, ceo, Uniglobe Travel Ltd, Sub Saharan Africa

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Wings expands into Nigeria

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HRG RENNIES Travel has launched its national Red Stamp Club programme as a result of increasing

requirements by corporate clients to improve management of accommodation spend, advises HRG Rennies Travel md, Bronwyn Philipps.

“HRG Rennies Travel has recognised the challenges its clients have faced over the last five years and the significant shift from traditional hotels to B&B and guesthouse establishments sparked the need to introduce a solution aimed at this specific market sector.”

To create the programme, the company has invested substantially in collaborating with various stakeholders including clients, accommodation suppliers and other industry associations. The HRG Rennies Travel Red Stamp Club is therefore a partnership between corporate clients and accommodation establishments, designed to increase value to all participants.

“Very importantly – it is not a

grading system. It is a framework that addresses the client’s essential needs such as safety for travellers, standardisation of processes and access to compliant and accurate data. It is about redefining the business approach to this sector of travel. The solution facilitates smooth integration and management for the client and it also offers many benefits to the B&B establishments.”Key features and benefits for the corporate client base include:• Central online database of

reputable establishments • Dedicated B&B support team at

HRG Rennies Travel • Health and safety validation • Financial SLA • SARS-compliant invoices • No more prepayments – 15

days to pay • Invoices signed at checkout • Negotiated rates HRG Rennies Travel is also working with partners to expose this development opportunity to the SMME accommodation industry sector.

Rennies launches Red Stamp Club

UNIGLOBE has implemented Sabre TripCase Corporate, a set of integrated corporate features on mobile, in SA for all its clients, advises Mike Gray, ceo Uniglobe VIP Corporate Solutions Travel.

“For corporate travel managers, TripCase Corporate will provide a better view of total travel spend by capturing and analysing travel data booked outside corporate travel programmes. In addition to the data collection and analytics, corporations can send employees customised messages, which help with security, duty of care issues and policy compliance.”

Using TripCase Corporate, travellers can make reservations outside their corporate travel programme

and designate when a trip or part of a trip, such as a flight or hotel booking, is for business. This information is then captured and shared with the corporation through an easy-to-read dashboard. This makes it far easier for travellers to manage their itinerary, make new bookings in and out of corporate travel policy, share their business travel plans with their company, and receive relevant in-app messages when travelling, all using one mobile app.

TripCase Corporate is available through Sabre’s online booking tool, GetThere, and is one of the first elements of TruTrip, Sabre’s newly announced solution that captures travel data across multiple booking sources.

Uniglobe implements TripCase Corporate


http://www.dumatravel.co.za

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www.renniestravel.com

Expect more.

Venturinginto

Africa


On the radar - TMCs

BY EARLY next year, SAA, SA Express and Mango are to be integrated into a new airline group that

in turn will form part of a new holding company reporting to the Department of Public Enterprises (DPE). SAA will also review its global network and eliminate loss-making routes.

This restructuring forms part of SAA’s new Longterm Turnaround Strategy (LTTS) presented to the Parliamentary Portfolio Committee on Public Enterprises in Cape Town recently. The long-awaited presentation was made jointly by Public Enterprises Minister, Malusi Gigaba, SAA chairperson, Dudu Myeni, and SAA ceo, Monwabisi Kalawe.

Of high priority, said Kalawe, was the recapitalisation of SAA, a review of its global network to eliminate loss-making routes and refleeting to mitigate fuel costs. He confirmed that all of SAA’s international routes were currently loss-making and were under review in co-operation with the DPE.

Apart from the airlines group, the new holding company will include three other sub groups: a Maintenance and Repair Organisation (MRO) sub group that will rebuild SAA’s aircraft maintenance capability, a Logistics sub group incorporating Air Chefs and Cargo, and a Loyalty sub group incorporating Voyager.

Kalawe told Travel Buyer the fact that the LTTS didn’t mention the much speculated about privatisation of subsidiaries such as South African Travel Centre (SATC) did not mean this was not on the cards. He said a decision

on SATC’s future would be made by the end of 2013 and would depend on SATC performing on its African footprint expansion.

Growth opportunitiesSATC ceo, Bulelwa Koyana, has declined to comment on SAA’s plans but believes privatisation would be positive, enabling a long-overdue development that would benefit SATC. She explains that strict competition regulations imposed on SAA as the dominant carrier are limiting SATC’s ability to follow international and domestic trends of consolidation and affiliation. “The bottom line is that SAA has been conflicted in the relationship, as they are both a shareholder and a supplier.”

Koyana says SATC is talking to Lufthansa City Center about a global affiliation as the German consortium is interested in entering the African market, but this wouldn’t involve shareholding.

She believes SATC’s brand association with SAA will remain unchanged – irrespective of the direction the organisation takes – because of its perceived value.

The number of SATC franchisees has grown to 82 – the biggest growth being in ITCs and TMCs – with a strong focus on corporate travel.

Expansion plans are in line with SAA’s focus on Africa. After franchisees from Lesotho, Botswana and Mozambique came on board, SATC recently signed up new franchisees from Swaziland and Ghana and is finalising franchisee agreements in Tanzania and Zambia. Angola and Nigeria could be on the horizon in future.

Koyana says the consortium has a strong empowerment agenda and business development assistance is the greatest need among SATC franchisees, including assistance in sourcing corporate accounts, tenders, improving service standards and BEE compliance.

SAA to sell off SATC?By Hilka Birns

http://www.renniestravel.com

GLOBAL REACH.LOCAL EXPERTISE.

For more information,contact Michella Webster:

+27 (0) 11 292 [email protected]

www.wings.travel

The go-to TMC for unlocking complex travel

Industry leader in emerging markets

Local experts understand regional markets and culture

There for you 24/7/365

© 2013 Wings Travel Management. All Rights Reserved.

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TOURVEST Travel Services (TTS), the travel management division of Tourvest, has appointed Shereen Morolo as chief executive officer: public sector of Seekers Travel. TTS’s chief executive officer, Morné du Preez, said he was delighted to have Morolo join the executive team and looked forward to the contribution she would make to Seekers, particularly in targeting local and national government business. “Morolo has a wealth of experience in the travel industry, notably in the public sector field, and she will guide and advise us on tapping this growing market,” he said. g

Corporate Travellergains market share

FLIGHT Centre SA’s Corporate Traveller brand is on target to double its annual turnover to R1bn

and 4% market share in 2013. The company attributes its

growth to giving its SME clients value service at low rates on monthly accounts without interest.

“The average yearly SME spend on business travel is R350 000 upwards, which is a substantial outlay in their annual budgets on a Top Five line item. Corporate Traveller’s expertise is in showing how that expenditure can be offset by added-value services and cost savings,” says gm of Flight Centre’s Retail brands, Andrew Stark.

“We normally save between 5%-25% for the client. Not by reducing travel but by finding more efficient ways to do it. Streamlining spend and consolidating suppliers can effect considerable savings.”

Enhanced mobilityMore news is that Corporate Traveller and FCm have launched a personalised mobile phone app to keep customers informed about every detail of their trips – domestically and internationally.

The Corporate Traveller Mobile app is free of charge and is compatible with iOS (iOS v4.3 or higher), Android (v2.2 or higher) and Blackberry (6.0.0 or higher, selected device compatible). The app can be downloaded via these devices’ respective app stores.

The app also provides destination advice, allows travellers to add events to their itineraries via their assigned Corporate Traveller manager and previews their trips at every stage.

Vital updates for business travellers on tight schedules include notifications about traffic delays en-route to the airport as well as flight delays and boarding information.

Andrew Stark, gm of Flight Centre’s Retail brands

Morolo takes on public sector

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Each month in our dedicated meetings and events pages, Travel Buyer brings you highlights from Meet, our publication for local corporate and government meetings managers. Meet is available monthly at www.meetmag.co.za as a fully interactive Digi-Mag, viewable on PCs, iPads and Android devices.

COMMISSIONS remain commonplace in South Africa but in some cases without the corporate’s

knowledge and often not openly declared. The declaration of commissions continues to be challenging from a number of viewpoints.

The most prominent advocators of commissions are MICE venues with and without accommodation, especially when it comes to larger-capacity events or a series of assured bookings over a protracted period of time.

Words such as ‘marketing

services fees’ are used by venues to disguise the payment of commissions. Venues with high operating expenses need to push the bookings schedule as much as possible to ensure fair profit margins and, in some cases, even to stay afloat. The MICE Academy has seen adverts that scream ‘25% commissions paid to anyone… no questions asked!’.

There are also individuals within corporate corridors who are aware of their decision-making powers and are not shy to demand an undeclared and undetected commission from

a venue, paid over to a certain ‘private account’.

To avoid falling prey to undeclared commissions, corporates should make it clear in their agreements that any undeclared commissions will be handled in the appropriate manner.

By the same token, professional intermediaries who are respected for charging fees – and at times declare commissions for additional time taken – should ensure their agreements with the corporation contain the accepted stance on commissions.

With professional intermediaries, commissions offered or inadvertently paid are handed back to the corporate client. The MICE Academy has heard of countless examples where in these circumstances the corporate has so appreciated this action that they advised the intermediary to keep the amount with the assurance that they would receive the next event with hopefully an adjusted charge structure duly discounted for a professionally accepted business practice. Honesty therefore can become a win-win situation for both parties.

MICE pricing: the murky waters of commissionsBy Helen Brewer, director of The MICE Academy

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1. Ignoring briefsOne planner said there was nothing worse than arriving at a venue and finding it was not set up according to what was discussed. “It wastes valuable time,” she said, adding that often there was not enough time to set things up properly at this stage. Another said special requests weren’t made just to be difficult but because the client desired things a particular way. “The client sees me as incompetent for not delivering what was originally promised,” she pointed out. “It wastes a lot of time having to double check that everything was done and having to micro-manage people.”

2. Lack of communication“My biggest gripe with suppliers is the lack of communication,” said one organiser. “In an industry where you have to rely on others to create a successful event, I find it frustrating to deal with bad communicators.” Others complained that some suppliers wouldn’t answer calls when they knew there was a problem with late deliveries. “If everyone communicated more effectively it would be so much easier to problem-solve when issues do arise,” she argued.

Thethings…5

…suppliers do that drive meeting managers crazy

Tessa Reed asked meeting managers what suppliers did that drove them up the wall. Here’s what you had to say.

3. Poor handoverA number of planners found it frustrating when they were handed over to a new co-ordinator. One organiser said she had even experienced this on the day of an event. “I would like the person introduced to me during the planning stage to be available to see the event to its conclusion.”

4. Inaccurate quotes and invoices“What really drives me crazy is when I brief suppliers and then receive a quote with half the items left off,” complained one event planner. “Lately I stick with companies that come in, take the brief, get the quote correct and then deliver on the day.” Another said reconciling invoices after events could be challenging, especially

when suppliers didn’t provide supporting documentation. “We cannot pay for ‘unaccounted costs’,” she said. “Suppliers should ensure that all supporting documentation and invoices marry prior to e-mailing the client.”

5. Nit-pickingAccording to one organiser, suppliers that nit-pick are infuriating. For example, when booking an event for 100 people, she said some venues would provide exactly 100 cups. She said she had one incident where a supplier argued with her in front of guests when she asked for more cups.

Do you have something else to add to the list? E-mail [email protected].

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u Meet continues on p24


Meet enlisted the help of a meetings expert to inspect the facilities of the newly refurbished Protea Hotel Balalaika in Sandton. After detailed walkthroughs and interviews with key staff, she provided us with her

independent assessment of the venue.

Venue inspector: new-look Protea Hotel Balalaika

u Meet continues on p26

What Vasti Topfer found…

THE Balalaika has always been a venue that pops into your head when thinking of venues in Sandton yet, for some reason, I had never used it for an event.

This time, however, I had time to review it and get a feel for what it had to offer.

On entry you are immediately hit with the buzz of people. Guests checking in and out, others attending conferences and overseas visitors sipping tea and enjoying their breakfast – I could not believe how busy the hotel was.

The Balalaika is conveniently situated directly opposite the JSE so the ‘X factor’ is perhaps its location. At the other end of the scale, it is right next to the Village Walk, which is looking run-down and supposedly due for a face-lift. So keep in mind that construction could be taking place right on your doorstep.

The Balalaika is also currently in its revamp stage and they intend having this completed by 2015.

When taken to the conference rooms, I immediately noticed one common area shared by all the rooms. Be warned this might pose a problem if you want to avoid chaos and need a bit of privacy. My suggestion is that when booking your date, ask what other functions are scheduled around your time.

Rooms contain standard conference equipment and set-up and should you require further technical equipment they will suggest their preferred supplier. They do not have breakaway rooms therefore you would need to book another conference room at a fee and their largest room can seat 300 delegates, cinema style.

The hotel offers 500MB free daily to all delegates, which is a bonus as many of the places charge for WiFi. Their pricing for a full day and half day is a little on the expensive side considering their star rating. So when making your booking be sure about what you are paying for and what you will receive. Visit the venue beforehand so that you are not caught unawares.

The hotel itself was established in 1949 and currently has 330 hotel rooms. Not something you would believe when standing outside the front entrance. They also have two pools that are surrounded by gardens. Again small but considering you are in the heart of Sandton – a rarity.

The Balalaika is a four-star establishment and this is evident from the outset but the friendliness of the staff, the convenient location and the new renovations may encourage you to give it a try.

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Vasti Topfer of Pink Plum Event Management has been running her own events and promotions company since the age of 25 and working as a team with her sister for the past two years. Some of her clients include Dimension Data, Nespresso and JWT.

The Lords Bar has been completely refurbished.

The conference room has new wallpaper, lighting and carpeting.

The hotel has overhauled its menus to focus on healthier, lighter items.

http://www.bluetrain.co.za


We’ve got it all

Celebrating 15 Years of Success in Hospitality, Birchwood’s staff are trained and dedicated to exceeding the expectations ofclients from all industries. Boasting 665 Accommodation Rooms, 60 On-Site Venues, An Award-Winning Restaurant (The Local Grill), Tazza Caffé & Wine Bar, Hi-Flyerz Aviation Bar & Nightclub, In-House Tour Operator as well as leisure facilitiesincluding a gym, pool and squash courts – The Birchwood removes the need for you to look anywhere else. removes the need for you to look anywhere else.

Just 7km from OR Tambo International and capable of hosting Just 7km from OR Tambo International and capable of hosting anything from 2 delegates to 3000 delegates, The Birchwood prides itself on still being able to provide that personal touch to all guests by ensuring flexibility and affordability for all event types and budgets. With a dedicated Décor Team, your vision is easily accessible. We invite you to let us do the hard work. Hop on our free shuttle from OR Tambo after enjoying a tea or coffee at our new Airport Office and allow us to assist you with your at our new Airport Office and allow us to assist you with your conference, banquet, product launch, exhibition, wedding or accommodation requirements because we are not exaggerating when we say, we’ve got it all!

Call: 011 897 0000Email: [email protected]: www.birchwoodhotel.co.za

www.facebook.com/birchwoodhotel

www.twitter.com/birchwood_hotel

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Transport ideasThe logistics of getting delegates to events can be one of the most stressful aspects of meeting management. Meet explores some of

the latest developments in the air and by rail.

SkyTeam Global Meetings

SkyTeam recently enhanced its Global Meetings product and introduced new features, including an online self-booking tool that enables delegates to book discounted travel on any of SkyTeam’s 19 member airlines. Organisers can now register their event from two months to five years in advance via a dedicated portal on SkyTeam and qualify for increased discount levels.

Global Meetings has also introduced an enhanced Productivity Reward programme that will see organisers get one free ticket for every 50 attendees who travel with SkyTeam to their event, and the possibility for delegates to earn miles with any SkyTeam airline loyalty programme. To qualify for these benefits the meeting must: • be registered from two months to five

years in advance• have a minimum of 50 attendees

travelling by air • have attendees originating from at

least two different countries (other than the country where the event is taking place)

What you had to say

By air… airline alliance loyalty schemes

THE three big airline alliances – Star Alliance, oneworld and SkyTeam – have developed products aimed specifically at meeting organisers that can allow

for significant discounts as well as more streamlined and centralised systems.

oneworld Events

oneworld’s event solution offers discounted travel as well as one set of terms and conditions covering all participating airlines. The airline alliance also has a promotional toolkit that organisers can use to build attendee awareness and downloadable real-time management reports. To qualify for these benefits the event must: • have a minimum of 500 international

attendees travelling from at least two regions

• a lead time of between three months and five years

Star Alliance Meetings Plus

Launched in 2009, Meetings Plus enables meeting managers to have one agreement and one central contact covering all 28 member airlines. Discounted tickets are available on all participating airlines and meeting managers can appoint the travel agency of their choice to issue all tickets. To qualify for these benefits, the meeting must: • have a minimum of 50 international

participants• have attendees travelling from at least

three different countries (not including the meeting destination)

• have a minimum of 60 days’ lead time to start date

• have a travel agency assigned to issue the tickets (which must also be able to submit tracked revenue figures after the meeting)

• be hosted or managed

ON BOarD… the Blue TrainThe Blue Train can be chartered for meetings, launches, parties and events. Corporates can custom-design their Blue Train route by selecting from a variety of options. For example, clients can select a golfing or safari charter, with the train stopping at or near golf courses or game lodges situated along the rail route. Other popular charters include stops at major SA events such as the Vodacom Durban July, the Nedbank Golf Challenge in Sun City and the J&B Met in Cape Town. The Conference Car, which is found in one of the two train sets, can accommodate up to 22 delegates and is fully equipped with audio-visual and technical equipment. Full catering and bar facilities are available.

SHEKESHE Mokgosi from Southern Africa Trust held a six-hour five-course dinner event on the Blue Train while it travelled around Gauteng. He was impressed from both a pre-planning perspective and the actual execution of the event. “When you consider the Blue Train, you would usually think of a leisure or holiday-type experience, so I was surprised at how well the train could be customised to suit an event,” he said. “The great thing is that it gives your guests, who may not have had the opportunity to go on the train, the chance to experience the luxury first-hand.” At the time of going to print, Mokgosi was already arranging the final details for his next event on board the Blue Train. He is using it as a venue for a charity dinner combined with a fashion show. g

We’ve got it all

Celebrating 15 Years of Success in Hospitality, Birchwood’s staff are trained and dedicated to exceeding the expectations ofclients from all industries. Boasting 665 Accommodation Rooms, 60 On-Site Venues, An Award-Winning Restaurant (The Local Grill), Tazza Caffé & Wine Bar, Hi-Flyerz Aviation Bar & Nightclub, In-House Tour Operator as well as leisure facilitiesincluding a gym, pool and squash courts – The Birchwood removes the need for you to look anywhere else. removes the need for you to look anywhere else.

Just 7km from OR Tambo International and capable of hosting Just 7km from OR Tambo International and capable of hosting anything from 2 delegates to 3000 delegates, The Birchwood prides itself on still being able to provide that personal touch to all guests by ensuring flexibility and affordability for all event types and budgets. With a dedicated Décor Team, your vision is easily accessible. We invite you to let us do the hard work. Hop on our free shuttle from OR Tambo after enjoying a tea or coffee at our new Airport Office and allow us to assist you with your at our new Airport Office and allow us to assist you with your conference, banquet, product launch, exhibition, wedding or accommodation requirements because we are not exaggerating when we say, we’ve got it all!

Call: 011 897 0000Email: [email protected]: www.birchwoodhotel.co.za

www.facebook.com/birchwoodhotel

www.twitter.com/birchwood_hotel

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Transport ideas

http://www.birchwoodhotel.co.za


On the radar - Chauffeur services

ALTHOUGH often overlooked, ground transportation offers numerous possibilities

to reduce corporate travel spend so when looking at potential suppliers, it’s important not to be snared by headline prices, warns Glenn Greene, travel manager for financial services company Nomura in the UK.

Greene explains a lot of suppliers will offer a good rate for airport transfers but when examining the pricing more carefully, there may be a serious number of extra costs, which could double the original price. “These extra costs include service charges, waiting time, STC administration charges, gratuities which are not necessarily passed on to the chauffeur, booking charges and many others.”

Greene adds ground-transportation companies also tend to exaggerate the size of their fleets and the nature of their operations. “After they have presented to you, if you want

to take them forward, pay a site visit, check the records and see that they have all the right procedures in place especially those around your own corporate social responsibility requirements.”

Travel managers should also always investigate the need for a fully allocated one-to-one chauffeur, according to Greene. “When buying in chauffeur services, it’s important to be clear what you require. Normally the biggest cost of a chauffeur is that they sit and do nothing when the passenger is working and then are required to work when the passenger is not working.” He explains it is often more cost effective to use an executive-car company that will ring-fence two or three drivers for the passenger and ensure one of those drivers is used for each journey. “From the passenger perspective, however, this is more inconvenient because they cannot use the car as a mobile store for their belongings.”

The best solution can often

be found when negotiating with the supplier, believes Keith Rankin, chief executive at Avis. He explains customers should supply an itinerary so the supplier can provide recommendations and cost-effective options. “There is the misconception that chauffeur drive is expensive but Avis also has the Point 2 Point option where customers are quoted per vehicle and not per person. This is effective for people travelling in smaller groups.” Rankin adds customers can be offered a ‘Total Transport Solution’. “There is one point of contact for all the services a customer may require and this is received at a preferred rate. The consultant handling the call will be able to make suggestions as to what might best suit the traveller.”

Lindsay Versfeld, marketing manager at Budget Rent a Car, agrees that travellers commonly think that chauffeur services are expensive. She explains travellers often match these rates to car-rental rates without realising that

the chauffeur-drive rate is all inclusive with no additional fees. “With car rental, there are other charges, for example kilometres and fuel as well as waiver-liability risk factors.” Versfeld warns travel managers to ensure that the company is certified by the Department of Transport. They also need to verify that the transport company has public liability and that its vehicles have updated maintenance records.

Location is keyAlthough most companies still negotiate car-rental spend and chauffeur-driven services separately, there is an opportunity to negotiate both services when the vendor provides both. This is often a good starting point to demonstrate the wider relationship and volume of the contract, explains Peter le Grange, national manager for Hertz’s chauffeur division.

Whether or not a chauffeur service is the right answer for your company will also

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Air Namibia i s p r o u d t o p r e s e n t o u r New Bird A319in the sky

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Ground transportation offers a maze of savings opportunities with car rental, limousine, chauffeur-driven black cars and taxi options. Dorine Reinstein investigates what travel buyers should take into consideration when discussing chauffeur services with suppliers.

when buyingWhat to knowchauffeur services


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depend on the location in which the service is required, explains Simon Hague, Hong Kong-based partner at travel and expense management company, Hague Norman. According to him, chauffeur services are often perceived as an expensive luxury, which is true in some locations. “You need to consider all the factors when considering your policy on the use of chauffeur cars. For example, what are the weather conditions in the location you’re going to? if it’s freezing cold, do you want your staff waiting in a taxi queue? What are the local alternatives (rail, taxi etc.) and at what times do they operate?”

Hague explains ground transportation is a very local product and travel managers need to engage with counterparts on the ground to understand business norms. “if you arrange a car in Shanghai, an Audi A6 would be a standard mid-level car. in india, the corresponding car would be a Honda Citi, which is very different.”

Exclusivity or choice?To maximise spend, buyers should look to use as few providers as possible by looking for a service that can provide worldwide coverage, according to Omayra Cruz, director of client services at GroundLink in the US. “By limiting the number of partners, the easier it is to gain a better overall picture of spend.”

Cruz explains one of the most common misunderstandings when it comes to this service is that the marketplace is too fragmented when it comes to booking and tracking rides and that it is too hard to manage chauffeur-drive spend. She adds buyers should keep five must-haves in mind when shopping for a new ground-transportation provider: (1) worldwide availability; (2) reliability; (3) multiple booking options including via website, mobile app and phone; (4) pricing transparency; and (5) a dashboard for travel buyers to book, view and manage their company’s ground transportation spend.

Dawn Nathan-Jones, ceo of

europcar SA, suggests, however, that travel managers shouldn’t limit themselves to just one supplier. “You might choose to have only one car-rental supplier but it might be in your best interests to have at least two chauffeur-service options.” She explains buyers will be able to get exceptional deals, depending on the time of travel, from a combination of suppliers rather than only limiting themselves to one. This also has the added advantage of ensuring travellers won’t get stuck without availability.

According to her, a mistaken belief is that the service is one-dimensional and expensive. “in reality, chauffeur services are available in a variety of options, ranging from the economic vehicles for the cost conscious to the luxury vehicle selections for the more discerning.”

industry players agree the supplier’s footprint, airport facilities and reliability are of the utmost importance but that doesn’t mean there is no space for new and emerging suppliers.

“Customers are often willing to test and support these emerging suppliers as part of their empowerment initiatives,” explains Kananelo Makhetha, md BCD Travel SA. He adds if cost and availability of fleet are the sole determinant of the selection, a one-stop service is the answer. “if the buyer also wants to promote smaller emerging suppliers then they may split the requirements.”

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Normally the biggest cost of a

chauffeur is that they sit and do nothing

when the passenger is working and then are

required to work when the passenger is not working. - Glenn Greene

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AS duty of care remains a top priority, chauffeur services can sometimes be a necessity. in places with grave security

issues or where abysmal road conditions and standards of driving are hazardous, chauffeur services are highly advisable and even non-negotiable.

Chauffeur services are also popular in the major metropolitan cities where parking can be a challenge, says Omayra Cruz, director of client services at GroundLink. Or in markets where the airport is not located near the city centre.

Glenn Greene, travel manager for Nomura in the UK, explains where and why in the world chauffeur drive is a popular option:

g Africa: in Africa, travellers tend to use the hotel car services, as public transport infrastructure is not very good in most countries and for security reasons.

g Asia: in Asia, the standard of vehicle is much below that offered in europe but it is reliable and cheap. The exception is Japan, which is perceived to be the most expensive place in the world for chauffeur service but it also offers the most reliable and efficient public transport anywhere in the world.

g Australia: in Australia, the use of chauffeur services in cities is less than in most countries. This is probably due to the availability of taxis in business areas and the much shorter journeys that take place.

g Europe: in continental europe and Scandinavia, taxis are often used but pre-booked vehicles tend to be chauffeur driven and fairly expensive. in most places, public transport is good, efficient and cheap and many travellers will use it. There are still a number of travellers who find that the convenience of local drivers with local knowledge outweighs cost considerations.

g Middle East: in the Middle east, chauffeur drive is relatively cheap and normally ordered via hotel concierges. Business travellers will use these services for security reasons.

g UK: The UK operates a tightly regulated private-hire service. Therefore, the executive-car service market has grown phenomenally over the last ten years and virtually decimated the chauffeur market.

g USA: in America, chauffeur services still rule. in the big cities (New York, Los Angeles, Boston, etc.) the ‘Black Car’ companies (executive car services) are gaining ground and are being used more often, especially in the airport transfer market. This is purely down to cost and the large corporate companies in New York

all use one of the two largest black-car companies (often a

number of smaller companies with one single despatch and administration centre).

Chauffeur services around the world…


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Did you know?g LUFTHANSA earlier this year began to

offer a personal chauffeur service to its first class and HON Circle passengers. The service is available for departures and arrivals at Johannesburg, Durban and Cape Town international Airports, providing transport from passengers’ homes or offices to the airport and back again upon arrival.

g eUROPCAR offers a variety of chauffeur services including transfer services, a flexi-service, a conference and event transfer service, a close protection service catering for ViPs such as government officials or international delegates and a guided tour service. europcar Chauffeur Service is located in all SA’s major cities and provides a 24-hour-a-day, seven-days-a-week call centre nationally. g

ALTHOUGH a popular choice for business travellers, chauffeur services are still perceived as an expensive option to get around. This

misconception partly stems from the fact that most travellers don’t understand the difference between a chauffeur service and a transfer, explains Peter le Grange, national manager for the Hertz Chauffeur Division.

Executive-transfer services

An executive-transfer service is a point-to-point service without any stops or detours. Although commonly associated with airport routes, executive-transfer services are available between two points in any city or town.

Glenn Greene, travel manager at Nomura in the UK, explains executive-car services offer the same core service to customers as a chauffeur drive. “They offer a driver with a good quality, a well-maintained and clean car, but without the ‘trappings’ of a fully blown chauffeur. Their prices tend to be on an A-B mileage basis from pick-up to drop

while a chauffeur company tends to work on an hourly ‘garage to garage’ rate.”

Greene adds airlines tend to use the executive-car companies to operate their chauffeur service. “in London there are four or five companies whose core business is based around airline accounts. All of these companies offer a full chauffeur service but the product used to service the airline accounts is based upon the executive-car service model.”

Chauffeur drive

A chauffeur drive is a far more flexible service allowing multiple stops and is charged by the hour. it offers business travellers the convenience of being able to use the car at any time. With chauffeur drive, corporates can also leave their belongings behind in the car, making the car a true mobile office. Meetings, conferences or client visits are often subject to indefinite time frames and a chauffeur drive allows corporates to alter or amend their schedule.

Chauffeur vs transfer services...


http://www.hertz.co.za

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SPORTS tourism in corporate marketing is definitely on the up and up, believes Stephanie Moss, director,

Stephanie Moss Solutions.Moss attributes the reason

for the popularity of sports tourism to the fact that more tournaments are being held for all types of sports. Promoters are also getting more creative and lateral about the marketing and sponsorship opportunities that exist around these events.

According to Neil McAlpine, director Pure Skiing and Pure Sport, companies are increasingly looking for more exclusive or high-profile destinations to wow their clients or delegates. “What better way than to include a high-profile sporting event like a Grand Prix or Rugby World Cup finals package?” McAlpine adds major sporting events are

usually quite exclusive events with limited ticket numbers and high demand. “All the who’s who want to spoil their delegates and clients and make sure they are part of the action. When Joe Soap knows that the competition is sending staff to the final of the RWC in London 2015 and he is not going, this can be a blow to the ego.”

Travel alone is often not enough as incentive anymore for corporate travellers, agrees Claus Martin, director, Pure Sport. “With a much more mature audience in the corporate incentive market, the needs have changed. Today achievers travel around the world on business to do their jobs. To give them, as an award for an extraordinary achievement, just another trip is not motivational anymore.” Martin adds an exciting and different incentive travel

On the radar - Sport as an incentive

What to know before organisinga sport incentive trip

Corporate travel buyers are increasingly opting to integrate prestigious sports events into their company’s incentive trips to reward employees. Words: Dorine Reinstein. Pi

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experience should be anchored around a special event.

Yet although sporting events are popular incentive options for the SA corporate market, there are some pitfalls buyers need to consider before embarking upon the organisation of such high-profile incentive trips.

Moss explains, travel managers need to take corporate governance and compliance into account. The length of stay is also an important aspect. “Keep it short and where possible include partners.”

The logistics of integrating a sporting event into a corporate incentive trip can also be quite daunting. Moss explains ticket allocations can be complicated. “There are often limited services at venues of major sports events with limited tickets, accommodation availability and

limited hospitality at reasonable pricing.” She warns that timelines need to be longer than conference and launch timelines.

Although major events are naturally very desirable, they do bring logistical challenges, agrees Martin. “it is critical here to work with an experienced, reliable and financially sound partner. There is nothing worse for a company than to expose their most important people to the risk of being left stranded without event tickets or accommodation and poor logistic organisation.”

McAlpine agrees: “You can’t buy experience. There is no such thing as a cheap sports holiday. it could cost you a lot more in the end. Make sure you deal with an official tour operator, especially for World Cup events.”


http://www.flymango.com

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MOST tour operators are not able to offer all-inclusive World Cup packages to their

clients for next year’s event in Brazil, as FiFA has said it will not reserve an allocation of tickets for tour operators or conduct an official tour operator programme. individual tickets for all matches of the 2014 FiFA World Cup Brazil will be sold directly to fans via FiFA.com.

The only all-inclusive packages available are the MATCH Hospitality Packages, which are mainly aimed at corporate travellers and offer premium tickets bundled together with a wide range of services. The services include facilities at the stadiums, such as private suites and lounges; gourmet catering; preferential parking; entertainment and gifts. And these hospitality packages come with a hefty price tag.

For South African companies, the MATCH hospitality programme has been a great success. edusport, the exclusive sales agent of MATCH Hospitality in SA, has seen remarkable domestic demand for ticket-inclusive packages to the football fiesta in Brazil, says marketing manager, Tertia Summerford.

Jérôme Valcke, secretary general of Match Service AG, says: “Tour operators will still be able to offer transportation, accommodation and other travel arrangements relating to the event to fans, without the match ticket element included.”

John Ridler, media and public relations manager for Cullinan Outbound Tourism, warns that the logistics of tailoring packages by purchasing all the elements separately could be problematic. “Our advice for agents who wish to promote

the World Cup in Brazil would be to contact FiFA-accredited operators in Brazil. They are likely to be up to date on accommodation, flights, land transportation and ticket sales.”

Ridler adds it should also be noted that with the 2010 World Cup, there was a trend towards last-minute bookings, making it difficult to manage allocations. “There were surges in bookings from countries whose teams had progressed to the following round.”

The cost of event tickets is not the only challenge, as travel to Brazil is generally expensive. According to a study released by the Brazilian Tourism institute, embratur, hotel prices in Rio de Janeiro have made it the third most expensive city in the world, overtaking New York and Paris. The average per night hotel cost in the city has been calculated to be R2 500.

On the radar - Sport as an incentive

Shortage of World Cup packages leads to challenges

The 2014 World Cup has sparked the interest of South African soccer fans but the lack of an official tour operator programme combined with high accommodation prices in Brazil could throw a spanner in the works for local travellers. Dorine Reinstein reports.

http://www.virginatlantic.com

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The high hotel rates led the Ministry of Tourism to set price caps for the recent FiFA Confederations Cup as well as the 2014 FiFA World Cup.

Domestic flights in Brazil are also expected to pose a challenge, as the country will feature 12 host cities that are quite far apart. Fans following teams between cities during the group stages will face flights

ranging from 45 minutes to ten hours. Moreover, domestic flights tend to be overpriced and are ill equipped to take payment from non-Brazilian bank cards. The main national carriers include AviancaBrasil, Azul, Gol and TAM Airlines.

Dawn Nathan-Jones, ceo of europcar SA, advises SA travellers to make the necessary bookings before

arriving in Brazil to avoid disappointment. “europcar also advises travellers to Brazil to book their rental cars at the same time as making their hotel and accommodation reservations. All three industries face similar restrictions with capacity. each of these industries takes its cues from one another other in terms of managing capacity.”

THe Sports & events Tourism exchange (SeTe) exhibition and Conference, taking place from October 22-24 at the Durban international Convention Centre, will aim to play a fundamental role in promoting sports and tourism in SA and to position the

country as a sports tourism destination.

This year the conference will not only assess the progress achieved in the implementation of the strategy set in place in 2012 but will also examine the role of local government in

supporting major events, understanding global sponsorship trends and accessing finance for major events.

Another key focus will be the challenges and opportunities in growing sports tourism in Africa.

ONe of the biggest issues in the sports travel industry at present is the ease with which websites are able to pass themselves off as reputable sport operators, says Chris Brothers, TeAM Sports md.

He says when choosing an operator, there are a number of boxes that need to be ticked:• How much experience does the

company have within the sport travel industry?

• is the company financially invested in its product? Do they take risks by purchasing advance tickets and rooms to ensure the best-possible price?

• Do they own the products they sell or are they merely a middleman?

• Are they affiliated to the events or products they are selling? g

SETE – positioning SA as a sport tourism destination

Deal with reputable sports tour operators

http://www.puresport.co.za


Deal detective

Linda van der Pol, Travelinfo’s editor, is our Deal detective, bringing you great specials from Travelinfo, the online travel information system in daily use by travel agents all over SA. Just book through your TMC and tell the consultant it’s a Travelinfo special. To get connected, e-mail [email protected].

1. CHOBE RIVERZambezi Queen. “Luxury African river safaris” – SADC resident rates are from R7 145 pp sharing. Rate includes a two-night stay in a standard suite with all meals and activities. Rate is valid until December 31.

2. MAURITIUS Air Mauritius. ‘Buy one and get one free’ offer. Special fares ex-Johannesburg to Mauritius: first passenger pays R7 355

(includes taxes) and second passenger pays only for taxes (about R3 405). Offer is valid for sales until November 30. Outbound travel is permitted from January 13 to March 20. Last return date is March 24.

3. SOUTH AFRICA Holiday Autos. Domestic special – rates are from R250 per day. This includes unlimited mileage, super damage and theft waiver, contract fee and airport

Top 10 specials

DISCLAIMER: All specials are subject to availability, currency fluctuations and seasonal surcharges.

surcharges. Book and pay until October 31. Valid for pick-up until January 6. Minimum three days’ rental required.

4. FRANCE Travel Vision. Paris winter promotion – stay six nights, pay for four nights. Rates are from R11 275 pp sharing. This includes return flights ex-Johannesburg, airport taxes, return airport-apartment transfers, accommodation in a studio apartment and a one-day Hop-on Hop-off tour. Promotion is valid from December 9 to 20.

5. MOZAMBIQUE Holiday Tours. Stay more, pay less in Mozambique – packages are from R9 850 pp sharing. Offer includes return flights from Johannesburg, current pre-payable taxes, return transfers, five nights’ accommodation with breakfast and dinner. Full-board rates also available. Special is available until October 30.

6. PHUKET Azure Travel. Seven-night packages at the five-star Serenity Resort & Residences in Phuket are from R7 420 pp sharing in October. Special includes return flights from Johannesburg, accommodation with daily breakfast and return airport transfers. Rates exclude airport taxes and levies of about R4 780 pp.

7. USAThompsons Holidays. Walt Disney World package – rates are from R21 828 per adult. This includes flights ex-Johannesburg to Orlando; taxes; airport-resort transfers; seven nights’ accommodation

at Disney’s All-Star Resort; and seven-day Magic Your Way base ticket permitting entrance to the Magic Kingdom, Epcot, Disney’s Animal Kingdom and Disney’s Hollywood Studios. Bonus: two kids under 18 years stay free when sharing with two adults (pay for flights and park tickets only). Offer is valid from October 29 to December 12.

9. NAMIBIAQ2 Travel. Namibia North self-drive package – rates are from R8 805 pp sharing. Package includes eight days’ car rental, one-night Frans Indongo Lodge (Otjiwarongo), two nights Halali Rest Camp, two nights Okaukuejo Rest Camp and two nights Vingerklip Lodge (Damaraland). Breakfast throughout except Vingerklip Lodge, which also includes dinner. Special expires October 31.

10. MEDITERRANEAN SAA Holidays. Eight nights in the Med onboard the Splendour of the Seas. Prices ex-Johannesburg are from R21 702 pp sharing. Package is inclusive of return flights to Venice, return transfers throughout, one-night pre-cruise accommodation (four star), seven-night cruise, all meals and entertainment onboard, port charge, gratuities and taxes. Offer is valid from November 14-23. g

8. CHINA Wendy Wu Tours. Groups special – save R1 200 pp off the brochure price. “China Experience” packages (11 days) are from R25 630 pp twin sharing. Visiting: Shanghai, Wuzhen, Xian and Beijing. Rate includes airfares ex-Johannesburg, airport taxes, domestic flights within China, three- to four-star accommodation, meals, entrance fees, guides, daily tours as per itinerary, transportation in air-conditioned vehicles, compulsory tipping and visa to China for SA passport holders. All travel to be completed by November 30.

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those whose journey never ends,

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