How to get where you’re going

The corporate travel market, through travel agencies, is worth around R25-billion and is continuing to grow at a faster rate than the leisure travel market, according to Flight Centre South Africa. This growth, coupled with the need for businesses to re-examine their travel budgets to ensure that they are as competitive as possible in the sticky financial climate, is bringing about change in corporate travel solutions.

Increasingly companies are able to choose from a variety of different options — in-house, agency and self-service — that can be tailored to match budgets and corporate climates. The various options for travel are easily defined. In-house services are those provided by a specialist consultant or dedicated staff member who works in the offices of the business concerned. An agency is a business dedicated to travel solutions, such as Flight Centre, and self-service usually refers to using online or direct supplier contact to resolve all travel requirements without any external or professional assistance.

Andrew Shaw, solutions manager at Amadeus Southern Africa, which provides information technology services to the travel industry, said: "The total size of the South African market is 10 to 11-million flight bookings and we estimate that a minimum of 70% of these are for corporate travel. For large corporates 80% to 90% use travel agents.

"In-house and specialist make up the balance. With SMEs the use of travel agents isn't as high, but still account for at least 60% to 70% of bookings. The rest would be done internally or by the traveller going online themselves."

Specialist choice

Corporates want solutions that are competitively priced, convenient, flexible and transparent.

Michelle Caldeira, managing director of Blue Moon Corporate Communications, is committed to the agency route for these very reasons. "They save us time, money and brain damage. Our producers do not have the time to deal with the many changes that occur when planning schedules in travel arrangements and so [using] a travel agency takes the sweat out of it for us," she told the Mail & Guardian.

Iain Meaker, executive manager for travel at Comair and, said: "We have witnessed trends within our corporate customer base around the tight management of their travel expenses in the best possible way. The rise of the travel management specialists has certainly helped meet corporate needs.

"Businesses openly pay for these services and the agents themselves are moving from being remunerated by the supplier to being remunerated by the corporate traveller. "The commercial emphasis has shifted to supplying the best deals and efficient systems to bring down the cost and improve the efficiency," he said.

Elian Wiener, managing director Epic Communications, said that, "Due to the complexities sometimes involved with international travel, there is quite a lot that can go wrong in terms of flights and accommodation. "We therefore entrust [our travel arrangements] to an expert travel agent who can advise on visas, desirable areas to stay and other useful information."

Wiener found that it could be quite time consuming to manage travel arrangements in-house and, because travel arrangements were not usually the primary role of the person responsible for making them, the risk of mistakes occurring was quite high.

"We have attempted to manage international travel arrangements in-house, but for these reasons we now prefer to [use] an expert."

Portia Mtsila, key accounts manager at XL Embassy Travel said that working with an agency "means you get to your destination in the shortest time, because we take care of your flights, accommodation, transport and visas. This leaves you free to sort out your business programme without any stress. Having a travel agent means you get [the] answers [you need]; sometimes when you book through the internet communication is difficult and getting what you need becomes a lengthy process which leaves you frustrated."

The online option

Online booking may have its down sides, not least of which is discovering that you have somehow booked a three-day layover at Cairo airport with no accommodation and no visa. Yet many companies prefer an online solution to their business travel needs.

For local travel, Wiener uses a staff member to source the best travel and accommodation solutions for employees.

"We compare flight prices — either directly from the individual airline websites or through aggregator sites — and for accommodation we have set deals with various hotels that offer discounts due to the high usage by our staff.

"Our experience is that it is cheaper, when planning local travel, to go directly to the airlines and hotels than to use a travel agent," said Wiener.

"Cost is a major motivating factor. Our perception is that outside travel agents don't always source the most cost-effective options. "We prefer to know that we are getting the best deal possible by going directly to the airlines, car rental companies and hotels."

An independent survey by Synovate showed that booking flights online was cheaper than using a travel agent as often as 90% of the time. The concept of an online travel agency in South Africa is still fairly new when compared with mature markets in America and Europe, Stephan Ekbergh, founder of Travelstart told the M&G.

"However, the shift to online travel shopping here is increasing as an ever-expanding web savvy audience turns to the internet in an effort to gain control over their own travel arrangements."

Certainly competition between online and agency remains fierce and is likely to increase as more South Africans become adept at booking and searching for travel solutions online.

In an analysis of the South African travel industry, the National Youth Development Agency (NYDA) said that "an important threat to the traditional travel agency comes from website operators that let customers make their own bookings online.

"Airlines, buses, tour operators and hotels are all keen to encourage direct contact with their customers, as this saves them paying a fee or commission to a travel agent."

Amadeus's Shaw told M&G: "The internet has contributed to people's need for instant gratification. Everyone wants to be able to go online and get information immediately. In the same way, corporates want information at their fingertips. More corporates are moving towards online solutions in an attempt to better communicate with staff travelling on business trips and manage travel spend."

The online environment fulfils the corporate need for flexibility and control, reduced costs and the chance to tailor-make the travel experience to suit the business. Other advantages of online booking compared to traditional travel agencies are that it is available 24 hours 7 days a week, the process is transparent with no hidden fees, and the booking process is quick and easy with convenient payment options.

That said, however, once an itinerary is booked online it is very difficult to alter it if there are changes to the traveller's meeting schedule, and this may incur additional costs. A survey carried out by ICM Research in November/December 2012 on behalf of Amadeus Business Travel UK showed that most business travellers were demanding increased flexibility. Many of them needed to change their itinerary after booking — an astounding 51% had to alter their travel plans in 2012.

"Corporates want more control over these processes and travel agents add a great deal of value and expertise," said Shaw. "They are particularly important when it comes to the complex travel requirements of corporates, as well as changes to travel bookings."

Andrew Stark, general manager: corporate at Flight Centre South Africa, said there has been a migration back to the traditional travel management company. "A number of our clients have tried the online model and converted back again. It seems the specialist agency is here to stay. Our offices in Australia, the UK and USA are still growing and they are a very relevant indicator as those markets are far more advanced in the global online space."

Blue Moon's Caldeira has found that, "online is often time consuming, even though it is sold as easy, and we find the specialist option ideal for our business. It allows our producers to focus on doing their jobs while travel specialists can apply their minds to finding the best solutions to our scenarios."

Personalised option

In a case of the shoemaker making his own shoes, Comair has a personalised corporate travel solution.

"We have a detailed understanding of its mechanics and manage our own corporate travel needs. We have built an online travel business with our own systems and inventory connectors, giving direct access to the supplier inventory needed to fulfil our needs," said Meaker.

This strategy uses Comair's own expertise to deliver a retail solution and has been designed to bring down the cost of travel for its staff. The company has then taken this internal solution and used it to create revenue producing opportunities that help to grow the business. These opportunities further cross subsidise the cost of travel for its staff.

"We maintain a direct relationship with [our] corporate [clients], often signing specific, direct commercial agreements with their own procurement teams. As systems improve with integration and connectivity between suppliers, so will more and more innovative solutions appear, enhancing the corporates's ability to manage and reduce the cost of travel," said Meaker.

Cost remains a driving factor in most corporate travel solutions and requirements, but so are innovation and value.

"Customers are very focused on value items. Companies are now looking at the value-added services and what travel management companies can bring to the table over and above value-for-money pricing," said Stark. "Our Corporate Traveller brand has seen a 45% turnover growth year on year for the past three years, and a 100% growth in market share. These figures show that innovation and value-added propositions are clearly a step in the right direction. Corporate Traveller has implemented several of these, including free after-hours service and a free SMS functionality."

And what of the in-house specialist? Realm Digital, itself an online solutions company, prefered an in-house option, said Simon Bestbier, account director at the company.

"We use an in-house person to organise corporate travel. We find that in-house is more customised, personal and efficient. An external agent has no knowledge of our clients and what clients we are pursuing, so when it comes to suggesting meetings of opportunity they are at a disadvantage, whereas our in-house person can suggest these as she has prior knowledge and understanding of our business."

Realm Digital found that having an in-house person saved it time and money. It has also given the company flexibility, which was vital to the business.

"It often requires some serious calendar juggling to maximise the return on investment for our trips, and this is hard to achieve with an external agent. The convenience of talking face to face makes life a lot easier than trying to juggle everything over the phone."

Shaw said corporate focus has shifted to controlling travel spend and improving transparency. "Many businesses are looking for ways to reduce travel costs in a fragile economy by better managing their travel policies and processes. Far more corporations want their own online travel solutions that can be integrated with their IT and enterprise resource planning systems. We have also seen that in-house is growing, particularly regarding hotel and airline bookings," he said.

No single solution

It seems that there is no one specific solution that wins the battle for control of corporate travel. Instead, businesses are picking the options that best suit their business requirements and tailoring them to fit. While the larger enterprises continue to use the agency as their primary source of travel solutions, they are putting pressure on these agencies to deliver travel itineraries that are more cost effective, transparent and offer additional value.

The ease of self-service travel sites has made it easier for corporates to ditch the travel agent and do their bookings themselves. But there comes a point when the knowledge and facilities of a specialist corporate travel agent can make the difference between getting to your destination ready to work or spending 10 hours in Madrid airport.

Although this article has been made possible by the Mail & Guardian's advertisers, content and photographs were sourced independently by the M&G supplements editorial team. It forms part of a larger supplement

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Tamsin Oxford
Tamsin Oxford
I am a professional editor, journalist, blogger, wordsmith, social junkie and writer with over 19 years of experience in both magazine publishing and Public Relations.

Related stories


Subscribers only

Q&A Sessions: George Euvrard, the brains behind our cryptic crossword

George Euvrard spoke to Athandiwe Saba about his passion for education, clues on how to solve his crosswords and the importance of celebrating South Africa.

Poachers in prisons tell their stories

Interviews with offenders provide insight into the structure of illegal wildlife trade networks

More top stories

No one should be as rich as Elon Musk

The reactions to Elon Musk’s billionaire status are evidence that far too many South Africans have not fully grasped the destructive consequences of inequality. Entrepreneur...

Department of basic education edges closer to releasing matric results

The basic education department has said that it is almost done with the marking process and that the capturing of marks is in progress.

The rare fairytale of Percy Tau

Through much hard work and a bit of good fortune, the South African attacker has converted a potential horror story into magic

Somali troops may have been drawn into Ethiopia’s civil war

The Mail & Guardian spoke to Somalis about their relatives who disappeared after signing up for military training and fear they may have been killed

press releases

Loading latest Press Releases…