Monthly Archives: August 2015

All you need to know: LH Distribution Cost Charge

Next week marks the bold move by Lufthansa Group to charge a Distribution Cost Charge for every booking on an LHG airline – Lufthansa, Austrian, Brussels and Swiss Airlines – processed by a GDS.

The airline is directing travel agents to use its Lufthansa Group See here for full details LH_VK-1860 FAQ_Lufthansa Group agent com_EN 09Jun15_v3 proofread.

While the charge will not be implementable in certain markets due to local legislation, it is being rolled out in South Africa from September 1. Meanwhile, ASATA is seeking legal opinion on the legality of such a charge in our South African market.

The move has raised the ire of several travel agent associations including the World Travel Agents Association Alliance (WTAAA) of which ASATA is an active member, as well as travel agent groupings. This week saw a leading group of corporate travel agents begin a policy of non-cooperation with Lufthansa. Advantage Focus Partnership corporate director Ken McLeod declared: “This fee is unacceptable in its current form. Make no mistake, the distribution network in its current form will be irreparably damaged by differential pricing on this scale by a major airline.

The Business Travel Coalition and a broad group of travel managers and travel management company executives from around the world are also sending  a letter to Lufthansa Group, the U.S. Department of Justice, the European Union’s Competition Commission and Germany’s Bundeskartellamt, which you can read here.

So, what do you need to know:

DCC amount: The DCC, currently set at €16 in the Eurozone, will be converted into the rand price at the time of ticket issuance.

Fare transparency: Requests in GDSs for fare quotes that include all taxes and fees will automatically include the DCC. A display in any corporate booking tool whose ticketing is enabled by a GDS also will include the fee.

Implementation: Lufthansa will implement the fee using a YR-IATA tax code until the OB field is implemented across all technology providers. When the OB field is implemented, the total fare will still be displayed.

Code-shares: The DCC will not be applied when a Lufthansa-operated flight is sold and ticketed as a code-share, but agents must be aware that they cannot book a code-share for every transatlantic Lufthansa flight. At least one leg of a code-share itinerary must be operated by the plating carrier. In addition, certain services offered by an operating carrier, such as premium economy, pet carriage and special meals, may not be appear in the display of the marketing carrier.

Refunds and exchanges: The DCC is non-refundable even if the fare is refundable. If the agent is using an automated refund tool, manual intervention may be required to prevent the refunding of the fee. The fee will not be reassessed if the ticket is changed, regardless of the nature of the new itinerary.


Airport official suspended for soliciting unwarranted ‘fines’ for Immigration Regulations non-compliance

An alleged fraudster, who attempted to solicit fines from minors at OR Tambo International Airport claiming that they had the incorrect documents to travel according to the newly implemented Immigration Act, has been suspended following a rapid response by The Association of Southern African Travel Agents (ASATA).

The airport official was said to have approached a group of schoolgirls travelling on a student exchange after they had successfully checked-in and presented all documentation to the airline check-in staff.

The group of schoolgirls were allegedly forced to accompany the official to an ‘interview’ room and were denied access to a female official leaving them traumatised and distressed.

According to the victims, the official claimed that they did not have the correct paperwork to travel and demanded a R500 ‘fine’ be paid before being allowed to depart South Africa. This is despite their documents having been vetted previously by their travel agent and accepted by the airline staff upon check-in as valid.

Upon news reaching their travel agent, the matter was escalated to ASATA, which in turn ensured it was dealt with speedily through the correct channels.

“It is so important that travellers fully understand what their rights are and that this kind of behaviour from an official is unacceptable,” says Otto De Vries, CEO ASATA.

“We would urge members of the public to inform themselves about the full requirements of the Immigration legislation, consult with their ASATA travel agent to ensure they comply, and refer any similar incidents to the Association so that these may be dealt with swiftly and effectively.”

“We simply cannot have situations where the officials in whom we place our trust undermine the process and cause our travellers undue distress,” concludes Otto.

Book direct, but what if…?

The latest travel supplier to attract the ire of travel agents the world over is international hotel chain Marriott with their latest advertising campaign aimed at encouraging travellers to bypass intermediaries.

The #ItPaysToBookDirect video campaign features an American celebrity Grace Helbig talking about the financial advantages of booking direct with the chain; benefits that include access to rates and the most accurate information about a property.  Check it out here

Our American counterparts have come out strongly against the advertising campaign questioning whether it is legal and truthful. The American Society of Travel Agents says it is “disparaging to travel agents, but also misleading to the travelling public”.

So while we all know what the benefits of customers booking direct would be to Marriott, an interesting article in Forbes this week asked customers to think about what’s in it for them. Particularly since the access to rates and accurate information, claims ASTA, aren’t any better than what a customer would receive from a travel agent selling the chain.

In his article “If You Like Good Service, Here’s Why You Need A Good Travel Advisor”, Forbes contributor Doug Gollan, presents the “what if” case.

“What if you book via the website or an online travel agency, you get to the hotel, and something goes wrong. Let’s say you are not one of Marriott Rewards’ top members who spend 100 plus nights a year. Yet, it’s your long-awaited, hard-earned vacation with family and loved ones. Let’s say you bought in at the best, or lowest rates, and you aren’t a regular customer for the company, and it’s your first time to this hotel. How much clout do you think you will have to get whatever your problem is resolved?”

Doug ends of his very eloquent article saying: “For the travelling public, the best way to make sure your vacation goes off without a hitch, or that if there is a problem, it gets corrected, is to have a good travel advisor a phone call away to make the phone call you need.  One thing I will bet on, is if there is a problem, you won’t be able to get ahold of Grace Helbig.”

So what do you think of Marriott’s new campaign? Misplaced or brilliant?


The Future of Travel

Where were you five years ago? And where was your business? If you’re in the same place you were five years ago, spare a thought for how the global travel industry has actually evolved in the past five years… The rise of Uber and AirBNB, New Distribution Capability and dare we say it… unabridged birth certificates!

Travel research firm Skift looks at the next five years and the nub of it is that travel companies have to be “fanatically focused” on the changing consumer behaviours across all sectors.

The research paper says brands should build a business around helping travellers connect with their immediate surroundings and people around them rather than just digital connectivity. Skift says you must be Smart, Sharp, Surgical and Strategic.

The most forward thinking travel brands are delivering deeper experiences to travellers by focusing on three things above everything else: Inspiration, Personalisation and a path towards self-discovery.

Further highlights in the next five years, travel firms have to look forward to, include:

  • The Rise of the Silent Traveller: A new kind of traveller who is adept at all available online and mobile tools and uses them to jump across all industry-defined silos. People are going ‘silent’ and self-reliant because they don’t want to be sold to anymore.
  • Millennial Mindset Modern Traveller: The psyche of Millennials maps perfectly on to what the modern travellers want from travel products.
  • Travel innovation is everywhere: Don’t just look for it exclusively in the travel startup or tech world.
  • The future of travel is in cities: Caring for locals first means being better on the global stage. The rise of smart cities is creating the rise of the smart mobility era.
  • Alternative travel is a reality: Fueled by the marketplace model, which has taken the best of online, mobile and social to create travel products that allow people to find rides or alternative accommodations with ease. Transactions are easier, discovery is faster and feedback is transparent, according to Skift.
  • On demand economy: Will lead to further unbundling of travel services, especially hospitality. Full-service hotels in dense urban environments will be affected most.
  • Smart travel brands: Will integrate the right on-demand service, make them seamless for users to access and use.

In essence… in 2020, expect the unbundling of everything, the on-demandification of everything and the mobility of everything!