Asata’s 2020 summit entitled ‘Travel Reimagined’ opened on Day 1 with Otto De Vries, Asata ceo speaking on the industry’s necessary journey from survival to reinvention, set against the scenario of the undoing of every aspect of travel.
Otto said it’s time for agents to make the shift from the immediacy of survival (from the initial onset of the pandemic and lockdown - the refunds, rescheduling, angry clients, cancellations, changing government policies, dealing with unresponsive suppliers, dealing with staff issues and having no revenue stream), to coming to terms with having to reinvent their businesses.
“The immense amount of work and pressure that the travel industry has had to endure, and the value you have shown to your customers at this difficult time, with little-to-no reward, has shown the value of having a travel agent on your side. I am so proud of this sector and what you have achieved.”
Otto referred to five ‘Rs’ (from the McKinsey article, Beyond Coronavirus: the path to the next normal) as a useful framework on which to act across five stages to lead your business from survival to the ‘next normal’.
- Resolve – determine what the challenge is and ensure everyone onboard is prepared for it.
- Resilience – guard near-term cash flow, create more runway, prepare for impacts in your business and in the greater industry.
- Return – create a detailed plan to return to scale. Flexibility is the key.
- Re-imagine – reinvent your business to suit the ‘next normal’. Be prepared for the ‘discontinuous shift’ in the expectations and preferences of staff and consumers. Identify opportunities in the new landscape.
- Reform – get clarity on the shifts in the regulatory and competitive environment, and prepare your business to give clients the comfort and reassurance they need to have the confidence to engage with you, follow your advice and safely travel.
Otto discussed Asata’s agent-advocacy engagements with Iata, the SAA business rescue practitioners (BRPs), DIRCO (concerning repatriation flights), and other governmental agencies. Asata is presently proposing a Covid-appropriate policy on Iata bank guarantees and has requested a postponement in Iata annual financial reviews. Regarding SAA refunds, Otto said that once the business rescue funds are made available to the airline, he hopes agents may start applying for refunds. “The BRPS have committed to protect vouchers and refunds,” he said.
Otto outlined some points around the new normal:
*The role of agents will be to instil confidence in travellers, by working only with suppliers who have the right protocols in place. Suppliers will also have to reinvent themselves and agents need to think about whom they are happy to work with especially regarding hygiene policies and flexibility of policies. Consolidation of suppliers will result in less choice for clients.
*Be sure you know what you are offering - know the Ts & Cs between agent and supplier and between agent and consumer.
*Understand the need for new products for these new travellers. Agents’ offerings must match travellers’ thinking.
*There will be less travel - The ease of travel has been removed by Covid protocols. Simultaneously virtual meetings have replaced many face-to face interactions which would previously have required travel. Corporate travellers are reluctant to travel and corporates are reluctant to allow them to travel and there will be strict management of corporate travel from both a Duty of Care aspect and a financial control sense. Leisure travellers will be reluctant to travel and for leisure they will want trips closer to home
*Flexibility of bookings and cancellation and change policies throughout the chain need to be inspected. “The current status quo is unacceptable and untenable’” said Otto. “For travel to be attractive, consumers need to know their deposits and payments are safe. Sellers’ refund, cancellation and exchange policies need to be addressed.”
*This is the end of 30-day credit, according to Otto. Card payments will trump cash. “We need to rethink how we do business, said Otto. Some clients have refused to pay their agencies’ 30-day accounts, in order to offset refunds which suppliers refused to make.
*The ‘dated’ BSP airline settlement model is a threat to the airline/agent relationship. Otto said it’s time to re-think this relationship. He is part of a risk management working group aiming to shift more of the risk management from agents to airlines.
*In terms of the new travel demand, Otto expects agents will have to adapt to international trips converting to local trips and local trips converting to local VFRs.
*Staff cutbacks will see a proliferation in ITCs.
“We will never return to normal”, said Otto, “but out of every crisis, comes opportunity. It’s possible that the days when travellers want to arrange their own travel are in the past.” He believes we will see a return to the travel agent. During the onset of the crisis, consumers, having to deal with cancelled flights, refunds, vouchers from airlines, by themselves, became very aware of the value of having a travel agent on their side. “Spotlight the true value proposition of a travel agent. As risk-averse travellers enter the market there will be an increased reliance on the retail travel industry for their guidance, advice, expertise and insights,” said Otto. “As Asata, we’re on that road with you and will doing everything in our power to provide you with the support you need to be as effective as possible to ensure your business survival and reinvention.”
