Quo vadis travel distribution – fvw online discussion

Quo vadis travel distribution – fvw online discussion

01.07.2020

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On behalf of QTA, Dr. Fried & Partner conducted an online survey on the topic of reorientation of travel sales with almost 6,000 QTA travel agencies. To present the partial results for the first time, fvw invited QTA’s management team, including Thomas Bösl (RTK), Lars Helmreich (Reiseland and TUI Travel Star), Rainer Hageloch (AER), and Ömer Karaca (Head of Technology at Schmetterling), as well as Dr. Markus Heller, Managing Partner of Dr. Fried & Partner, for discussion.

In essence, the study comes to two conclusions:

  • Almost all respondents (97 percent) believe that the additional expenses caused by the tour operator are only unsatisfactorily or insufficiently remunerated.
  • Almost all respondents (96 percent) see a very high or high need to change the current commission logic and incentive models.

Commission models 2021

In order to ensure a future in travel distribution (travel agencies, OTAs, tour operators) that is satisfactory for all, the study shows that intensive thought must be given to new models of earnings. So far, only a few medium-sized tour operators, such as Schauinsland, have presented their commission models and offer sales in uncertain times some planning security. Overall, however, newly conceived earnings models are needed in order to ensure that the interaction between tour operators and travel sales continues to be secure – Dr. Fried & Partner is already developing sustainable models which include aspects such as an overall shrinking market for package tours, the withdrawal of market participants, the localization of customer value approaches and dealer-oriented margin approaches.

Service and consulting fees

In addition to the current tour operator commission, a number of travel agencies are already charging customers for services and advice.

For example, the survey conducted by Dr. Fried & Partner revealed that 74 percent of travel agencies see the possibility of charging service fees as a matter of principle. These can be charged for additional activities in connection with the actual holiday booking (e.g. visa arrangements, seat reservations, etc.). Of these, almost half of the respondents estimate that they can levy service charges in at least one in four booking transactions. Just under a third consider it realistic that service fees can represent an element of merit in every second or third booking.

A good half of the respondents see an opportunity to levy a consulting fee. More than a third of the travel agencies see themselves in a position to charge a fee for at least every fourth booking. 14 percent believe that a consultation fee can also be charged more frequently. Consultancy fees can be charged for advice and the preparation of an offer and can be credited if the booking is successful. During the discussion it became clear that the acceptance of an additional consulting fee depends largely on the quality of the consulting and the complexity of the trip.

All in all, when levying service and consultancy fees, it is primarily all the self-confidence of the travel agencies with regard to their services and good communication with the customer that are crucial. More and more travel agencies are already reporting positive experiences and understanding of the customer.

In order to achieve decision-making reliability when determining service and consulting fee levels and to quantify the aforementioned (additional) expenses of travel sales against the background of the existing commercial agent status, the entire industry needs clarity about its processes, structures and expenses. In this respect, a process cost analysis is recommended, as has been carried out several times by Dr. Fried & Partner in the past decades.

Collective agreement

At the end of the online discussion, Thomas Bösl praised the positive public image of travel agencies. Thanks to the demonstrations of the last few weeks and the tireless work, a more positive image has established itself in society than ever before. For this reason, too, now was the right time for necessary changes. He explained that the QTA is currently working on a possible collective agreement as well as on the coordination of current commission systems.

See the recording of the online discussion here:

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