Another year… some shockers and some highlights. Of course the world of travel is never impervious to, well… the world, and what happens in it, and so 2015 has been an exceptionally challenging one, with all estimations that 2016 will be even harder. Here are some of our low and highlights!
We kicked off 2015 with our 21st century Travel Agent theme which underpinned many of ASATA’s activities from our national conference to the launch of a major study into how the industry needs to evolve to suit the 21st century needs of our leisure, corporate and corporate buyer customers.
ASATA and IATA began to work through a joint working group to meet with Commercial Banks to identify a solution to ensure compliance with the New Global Template.
Efforts to lobby Home Affairs to postpone its June 2015 implementation of the new immigration regulations continued in conjunction with the TBCSA member associations, with CEO Otto de Vries heading up the TBCSA Immigration Regulations task team.
After months of nominations, judging and organisation, it was all glitz and glamour in February as the ASATA Diners Club Awards winners were celebrated at a gala event held in Johannesburg. Walking away with the award for Exceptional Commitment was Tourvest Travel Services’ Lidia Folli while Club Travel’s Minette Fourie won the Tomorrow’s Leader award.
Also in February was the launch of the new hand baggage regulations in South Africa, which had many passengers in a bit of a tizzy, but turned out to have few serious repercussions.
ASATA began working on a comprehensive study regarding airlines’ levying of fuel surcharges in an environment where the price of oil had fallen significantly.
In March, home-based travel agency group Travel Counsellors joined ASATA and the discussions around ITC business models began to emerge. Members of the travel industry were also asked to participate in a review of South African Tourism.
ASATA expressed concern over the delays on the adoption of the amended Tourism Sector B-BBEE Scorecard and sought recommendation of the measurement of the entity size. The current definition of turnover placed many travel agencies and tour operators as generic rated entities when they might well be either EMEs or QSEs when rated on service fee income.
The issue of fuel surcharges came under scrutiny in April with the launch of ASATA’s comprehensive Fuel Surcharge Study, which was tabled at the World Travel Agents Association Alliance first board meeting and adopted as a global study to be used to lobby airlines to incorporate the fuel surcharge component into their base fares. ASATA’s view is that it is no longer acceptable for airlines to levy a fuel surcharge given the many changes to consumer laws, inclusive pricing and the oil price’s fall.
ASATA’s Member Advisory Forum and National Treasury continued consultations around 30-day payment transgressions and further issues of non/ late payments to ASATA members.
May was conference month and ASATA’s theme of the 21st century Travel Agent underpinned much of the content, including the first-ever Young Professionals In Travel stream. Delegates were given strategic insight and practical tools to ensure their business’ success in the 21st century. The ASATA Mobile App was also launched, as was the first phase of the 21st century travel agent study.
In May, ASATA announced it had concluded a detailed analysis of the pricing transparency concerns raised by members. The findings indicated that ASATA could not regulate prices in itself and that the marking up of surcharges was in direct conflict with the CPA. As a result it was agreed that ASATA would outlaw this and amend its Constitution and Code of Conduct, introducing a special purpose audit that would ensure that members did not contravene this.
After months of lobbying, the Immigration Regulation deadline arrived and the tourism and travel sectors began to grapple with the fallout of the “unintended consequences” that the legislation had on the industry.
Travel CEOs took to the streets and braved the bitter Jozi cold to join the CEO Sleepout initiative, helping to raise over R250m for Boys and Girls Town.
In June, Lufthansa Group announced it would charge a booking fee for reservations made through the GDS. ASATA expressed its disappointment that the airline could find no other methods of absorbing their distribution costs and sought legal opinion on the legitimacy in this market of such a measure.
ASATA also refuted Cabinet’s assertion in June that immigration regulations had had “unintended consequences” following the announcement that Cabinet would establish an inter-ministerial team to examine the consequences of the immigration regulations.
ASATA launched its Demystifying Travel marketing campaign and its slogan “Travel with Peace of Mind”, creating a range of Facebook and Twitter posts for leisure and corporate travel agents to help demystify some of the ‘travel funnies’ that our customers come up against.
ASATA’s Member Advisory Forum on ITCs met for the first time to work on a definition and framework for the ITC model in the South African market and to understand all the roles and responsibilities in the entire value chain. It was agreed that further MAF meetings would be held to define a framework that would protect all members of the chain.
Government announced it was creating a new government supplier database on which ASATA-accredited travel agents and TMCs would feature. This was the direct result of months of engagement between ASATA and National Treasury to define terms against which government would procure travel in future.
SA Tourism and ASATA also began discussions to help inspire South Africans travel around their country and encourage a culture of domestic travel. ASATA and SA Tourism will be working together to find opportunities for ASATA members to promote domestic travel. Otto de Vries jointly won the Business Traveller Africa Business Travel Personality of the Year award for the “tireless work” that was done in challenging the changes to SA’s immigration regulations.
Finally, Lufthansa launched its much-contested Distribution Cost Charge for every booking on an LHG airline processed by a GDS.
The newly appointed ASATA board took the reins to future plan, and future proof the industry by providing a strategic framework for governance in the travel sector through the implementation of 15 key projects.
At the Annual General Meeting, several changes were made to ASATA’s constitution, including the implementation of a special purpose audit to eradicate mark ups on third-party taxes, as well as ensure that the booking class on charged to the customer matched the booking made and that the invoice issued to the customer was a valid tax invoice in terms of the criteria required by SARS Section 20(4) of the Vat Act. Marking up of surcharges, including taxes, airport taxes and other fees imposed on airlines by government authorities is in direct conflict with the provisions of the Consumer Protection Act.
After months of development, ASATA’s new consumer website, aimed at educating the public at large and corporate and government customers about the benefits of using an ASATA member, was launched. A new members-only site is currently under development.
Also new to the block was dynamic industry go-getter Kim Koen who joined ASATA as its GM in October. Kim was instrumental in developing and drafting the travel procurement strategic framework between industry and government.
The New Distribution Capability (NDC) report was released to outline how travel agents could successfully use NDC in future. ASATA members’ views were incorporated in the international study released by WTAAA.
ASATA attended the annual GBTA conference with Otto de Vries profiling why corporate customers should entrust their travel management to ASATA-accredited TMCs.
IATA launched its changed IATA BSP ZA financial criteria in November – criteria that was proposed by the Agency Programme Joint Council (APJC) for BSP Southern Africa. Following concerns raised by ASATA and its members that the timing of the extraordinary financial assessment was far from ideal, IATA agreed to extend the implementation of the local financial criteria for BSP South Africa (ZA) to 1 March 2016.
After years of discussions, the Default Insurance Provider was also approved. The success of the take up and deployment of the DIP was directly aligned with the approval of IATA’s new financial criteria for BSP ZA.
ASATA welcomed the announcement that the Inter-Ministerial Committee around South Africa’s immigration regulations issued recommendations to mitigate the impact that this legislation had on the tourism and travel sector.
Otto de Vries attended the 3rd Summit of Travel Agencies Associations to present several papers to delegates, including the WTAAA report on NDC and outcomes of ASATA’s 21st Century Travel Agent research initiative.
In a bid to raise the profile of ASATA and its members among corporate customers, ASATA attended the African Business Travel Association (ABTA) conference in Cape Town with Kim Koen providing insights into ASATA’s participation in lobbying against the immigration regulations which have had a detrimental impact on the tourism and travel sectors.
The implementation of the changes to South Africa’s immigration regulations began to roll out, including the introduction of biometric visas on arrival and the future inclusion of parents’ names within the passports of children under 18 to dismiss the need to carry unabridged birth certificates.
The USA Government voted to overhaul its Visa Waiver Program (VWP), preventing anyone that has travelled to Iraq, Syria, Iran or Sudan in the past five years from using the programme to enter the United States, while the European Union was in discussions regarding passport-free travel across EU states following the Paris attacks.
Modest increases in global travel prices and a travel management environment that is coming to grips with evolving disruptors appear to be on the cards for 2016, according to the American Express Global Business Travel Forecast 2016 (the “Forecast”).
The report which predicts air, hotel and ground transportation pricing trends, as well as makes related travel management programme recommendations, says that in Africa, airfares are expected to increase slightly in 2016 as a result of protectionist policies impacting intra-regional flights and higher infrastructure costs.
Given Africa’s limited ground infrastructure, air travel to and from the continent continues to be the most convenient method of travel. However, high operating costs, a lack of low-cost carriers (outside of South Africa), and stringent intra-continental regulation are expected to support fare increases within the region.
“While we expect modest increases in global travel prices heading into 2016, travel managers are operating in an era of new challenges and evolving disrupters,” said Caroline Strachan, Vice President, Consulting, American Express Global Business Travel. “In addition to handling tasks such as measurement and compliance, new factors such as the sharing economy and mobile booking channels are becoming increasingly popular for business travelers. In order to thrive in this digital era, travel managers need to be aware of and dynamically adapt to these forces across a variety of geographies.”
Read about global pricing trends here.
Don’t you just hate them? Those self-entitled Generation Y whizz kids who are taking the workplace by storm and spend half their lives on their phones. It’s the generation everyone loves to hate. But if there is one important thing we can learn from them, it’s their ability to place importance on and find a healthy work-life balance.
And of course nothing impacts on a healthy work-life balance quite as much as business travel. As a business traveller, you’ve probably racked up those miles flitting from airport to airport, continent to continent on behalf of your company.
You cross time zones, get barely any sleep, gain a little weight while eating on the go and give up your precious weekends for that deal that nobody else could seal. While you’re making these sacrifices, most companies are focusing their attention on tightening their travel policy to save costs, sometimes leaving you wondering if they truly understand the hardships of corporate travel.
Cost-saving measures are often thought about in a rather one-dimensional way. Simply put, by reducing supplier costs, requiring you travel in Economy Class or booking at lower graded hotels.
But what about the hidden costs that arise as a result of introducing a travel policy that cuts costs to the bare bones. The serious impact on your productivity after 14 hours spent with your knees around your chin in economy class. The dissatisfaction you may feel at being forced to travel in this way and your propensity to stay engaged, involved and in fact employed at that company.
Do you feel unappreciated? Are you headed for burnout as you rack up those miles? And are you looking for other opportunities at a corporate whose travel policy takes into account your business travel wellness or one where you wouldn’t have to travel at all?
All is not lost though…Your first course of action should be to talk to your travellers and ASATA TMC to assess the hidden costs your travel policy could have if it is not taking into account the wellness of your business traveller.
Your travelling employees are a valuable tool to your firm’s productivity and a traveller-friendly policy that reduces travel friction as much as possible within a reasonable cost framework can be a win-win for all parties. Let your ASATA TMC show you how…
IATA has announced proposed Local Financial Criteria (LFC) applicable to BSP South Africa; criteria that was proposed by the Agency Programme Joint Council (APJC) for BSP Southern Africa (Incorporating South Africa, Lesotho, Swaziland, Namibia and Botswana) and endorsed by the 38th sitting of the Passenger Agency Conference (PAConf/38).
Why did it need to change?
The changes to the LFC were a culmination to a lengthy consultative process between Airlines and Agents on the APJC to meet the constantly changing business environment. In addition to being one of the oldest BSP operations in the world, the current LFC had not being updated in over 15 years. APJCs must meet at minimum once a year and review the Local Financial Criteria.
What is the APJC?
The APJC comprises five airline and five agency representatives. Agents are selected from the agent community and this is coordinated by ASATA, which participates only as an observer at the APJC. IATA acts as the secretariat. The role of the APJC is to develop the Local Financial Criteria (LFC) and it may also consider all aspects of the Agency Program in the country or area and make recommendations in the form of agenda proposal to the Passenger Agency Conference.
What is the deadline?
According to IATA, the effective date of the new Local Financial Criteria will be 1 February 2016, and as a result all Accredited BSP Agents will be required to ensure compliance before the said date.
What is the next step?
In December 2015, IATA will undertake an extraordinary financial assessment applying the new local financial criteria against the current audited financial statements as held by IATA. The assessment will be based on the twelve (12) months sales period between 1st December 2014 and 30th November 2015.
The result of this assessment will be communicated directly with each accredited BSP agent with a compliance date of 01st February 2016 as a deadline to provide the requested Financial Security.
Where can I find more information?
The new Local Financial Criteria applicable for BSP ZA can be viewed here.
IATA has also produced a list of FAQs for agencies that includes information on the key LFC changes, how they will affect your business and key changes that are expected in future.
Please forward any questions you may have around the LFC to firstname.lastname@example.org.
It’s no secret that for many airlines’ profits come from their ancillary product sales.
According to the research paper conducted by IATA and WTAAA, NDC: Travel Agencies’ Enabler to Success, on average 76% of travel agencies book airline ancillary products.
TMCs are the most likely to book airline ancillaries for their travellers, with nearly nine in 10 doing so. TMCs’ primary audience, corporate travellers, may have travel policies that allow them to buy these products.
Airlines’ websites offer the most complete selection of ancillary products – no doubt the reason why agencies use them most to book ancillaries.
To do this, though, may require an agent to toggle between a GDS, where the agent books the flight, and an airline website, to book the ancillaries. The process is inefficient, reducing agent productivity, driving up agency costs, and frustrating travel agency executives – and, by extension, the travellers the agency serves.
Agency executives don’t like this fragmentation. Agencies view having to use multiple channels to book air and ancillary products as counterproductive, and aren’t pleased with the additional effort required to integrate non-GDS transactions into their mid- and back-office systems.
This is why the researchers believe in the critical nature of NDC to the global airline industry. With NDC, airlines can, at last, help evolve the traveller’s purchase decision in indirect channels from being based strictly on price, rendering airlines as substitutable commodities, to overall value based on factors such as airports, schedule, amenities, journey cost – not to mention the value of the brand. Price will always be a decision-making criteria, but it need no longer be the lead or sole criteria.
What to learn more about NDC? Visit IATA’s NDC page for details.