Finding your way through the great air fares jungle
| Pages | 22-22 |
| Date | 01 October 1980 |
| Published date | 01 October 1980 |
| DOI | https://doi.org/10.1108/eb057154 |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Finding your
way
through
the great
air
fares jungle
An
essential guide
for business men
by Ray Byerley,
Marketing Director,
Hogg Robinson Travel
IN the current economic
cli-
mate, the need to control over-
head costs is of paramount
importance to management.
Few areas give more cause for
concern and arouse so much
emotion as overseas travel
expenditure and, in particular,
air fares. The businessman is
disgruntled because he feels he
is subsidising the holidaymaker
and getting little extra in terms
of service benefits for his sub-
stantially higher fare.
What steps, therefore,
should a company with subs-
tantial overseas travel take to
ensure their expenditure is cost
effective? In today's confused
and highly competitive
market-place, I firmly believe
it makes more sense than ever
to use the services of a profes-
sional travel agent - not only
with the necessary resources to
provide an efficient personal
service, but also the expertise
and purchasing power to
ensure you receive value for
money. He has no vested inter-
est in any one airline or hotel
and his job is to act as a
"broker" by offering expert
advice on the full range of fares
and services that are available
on the market and at no extra
cost to you.
The economic plight of most
airlines, coupled with the trend
towards "deregulation" of air
fares in many areas of the
world,
particularly North
America,
has resulted in an air
fares "jungle". The complexity
of the market makes it
extremely difficult for travel
agency
staff,
however efficient
they may be, to keep abreast of
a multiplicity of different fares
and regulations that are chang-
ing almost daily.
In an attempt to combat the
situation,
my company set up
an "Air Broking Unit". It is
staffed by fares experts who are
fully conversant with and alive
to the opportunities that exist
in the changing market-place.
Their sole responsibility is to
provide a support service for
our operational personnel by
ensuring the numerous cost
saving opportunities are fed
through them as they arise -
they in turn advise their clients.
Savings in excess of 50% of
normal fares are often possible.
It has been suggested to me
that it is not in an agent's inter-
est to offer cheaper fares since
it reduces his commission. In
today's climate any company
that adopts this short-sighted
policy is doomed. The agent
must be innovative and fulfil
the function of travel consul-
tant in the full sense of the
word
—
he can no longer afford
to simply act as an order-taker.
Since the prime objective of
most companies is to ensure
their personnel reach their des-
tination as quickly and as com-
fortably as possible and in a fit
state to conduct business, it can
be false economy to allow cost
to be the overriding factor. It is
equally important, therefore,
for the agent to point out the
restrictions and possible pit-
falls of using a cheaper ticket -
this is particularly relevant to
companies who purchase
'"bucket shop" tickets (dis-
counted tickets sold through
non-licenced agencies). No
responsible company can take
the risk of having their execu-
tives inconvenienced and
perhaps forced to spend addi-
tional nights en route. This not
only defeats the original cost-
saving objective, but also
causes frustration and the
potential failure to meet busi-
ness commitments.
I would now like to turn to
less tangible, but nonetheless
equally important areas of
cost-effectiveness. Staff time
costs money and too many
companies use their own staff
to perform functions that to my
mind should be performed by
their Travel Agent. Apart from
providing tickets, a truly pro-
fessional travel company will
arrange regular ticket
deliveries, make hotel and car
hire bookings worldwide, work
out complicated itineraries,
obtain passports, visas, cur-
rency and travellers cheques,
provide a 24 hour emergency
reservations service and many
other ancillary services -
gen-
erally, free of charge. Several
companies also have depart-
ments that specialise in making
travel arrangements for trade
fairs, exhibitions, study tours,
organising conferences in the
U.K. and overseas and setting
up incentive travel program-
mes. However, it is important
to satisfy yourself that they
have the necessary experience
and infrastructure to perform
effectively in these specialised
markets.
If the level of expenditure is
sufficient, a travel agent may
consider installing an expri-
enced member of his staff on
the company's premises to per-
form the function of travel
co-ordinator or work under the
control of
the
company's travel
manager.
The professional travel
agent will endeavour to establ-
ish a close rapport with his
client so that he has
a
complete
understanding of his require-
ments. By maintaining close
liaison and discussing forward
travel plans and objectives, he
should be able to make
con-
structive recommendations on
cost effectiveness. This is
where the function of a travel
co-ordinator is so important
because to achieve this cost
efficiency generally requires
some degree of internal educa-
tion within the client company.
Progressive agents are
already investing heavily in
technology to take advantage
of the rapid development of
sophisticated communication
systems.
The TRAVICOM air-
line reservations system, for
example, is undoubtedly the
most revolutionary piece of
equipment to be introduced
into travel agencies. It affords
direct access to the reservation
systems of over 20 major air-
lines through one visual display
terminal,
providing instant
availability and confirmation
of seats, hotels and ancillary
services. Automatic ticket
printing machines form part of
the software. It enables the
agent to provide a far more
streamlined and efficient ser-
vice.
I have constantly referred to
the professional travel agent,
but it would be naive of me to
suggest that the truly profes-
sional approach is widespread.
Unfortunately, this is far from
true. When there is a downturn
in the holiday market, numer-
ous companies set themselves
up as business travel experts
without the necessary
resources and expertise to pro-
vide anything more than
a
basic
service - often the same staff
are expected to sell holidays on
the counter. Unfortunately,
many client companies have
come to accept this basic level
of service as the norm.
The travel industry, like
many others, is going through a
period of tremendous change
and there will be many casual-
ties. The companies that will
survive are the ones that are
innovative and can anticipate
and cater for the changing
needs of the business traveller.
This will require a highly pro-
fessional approach and a sub-
stantial investment, particu-
larly in the areas of technology
and staff
training,
to ensure the
level of expertise and standards
of performance are of
the
high-
est order.
I am convinced if
a
company
appoints a travel agent with
this professional approach and
sufficient influence and pur-
chasing power in today's
rapidly changing market-place
and at the same time fully
util-
ises the full range of services
that the agent can provide, it
will result in meaningful sav-
ings on both his direct and
indi-
rect travel overhead costs.
22 INDUSTRIAL MANAGEMENT + DATA SYSTEMS
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