The Age of Zero Commission and Zero Guarantees

The “Zero Commission” ruckus has been ratcheted up another step, by the travel agents. As per various recent news reports, “in a move aimed at forcing airlines to revoke their decision to withdraw the five per cent commission, previously built-in to the ticket prices, and paid to the travel agents, over 2,500 travel companies, including IATA travel agents and online travel agencies (OTAs) like Makemytrip, Cleartrip, Yatra and Ezeego, have decided to stop selling Jet Airways and Jetlite tickets from December 4.”

The Jet decision was taken at a meeting of the six associations – Travel Agents Federation of India (TAFI), Travel Agents Association of India (TAAI), IATA Agents Association of India (IAAI), Indian Association of Tour Operators (IATO), Association of Domestic Tour Operators in India (ADTOI) and Enterprising Travel Association of India (ETAA) – which cumulatively account for nearly all of the 2,800 IATA agencies, apart from numerous OTAs.

A previous decision by the agents to boycott Kingfisher Airlines and Kingfisher Red, was withdrawn at the last minute.

The three Indian full service airlines and several international carriers stopped paying 5 per cent commission on the ticket prices to travel agents from November 1. The agencies have had around 10 meetings with airlines to make them withdraw their decision but that has not worked. The airlines, in turn, have asked the agents to levy a transaction fee of Rs 350-10,000 per ticket in lieu of the commission.

Like it or not, we are living in an age of “zero guarantees”.

Customers are increasingly demanding better value for their money spent. In these hard economic times, my customers are demanding that I cut costs, improve service, and be available to them when they need me. In return I am guaranteed nothing. Just an opportunity to do business, not even the business itself, just the opportunity.

Any entity in business, survives only due to the value they add in the supply chain. The day someone or something else can improve the value chain, existing links will be re-aligned. It applies equally to professional relationships as it does to products. An employer looses employees the moment the value chain is superseded by another, and vice-versa. I may be as bold to say, that this is extending to personal relationships as well, but that is another topic of debate.

As you recall from the news reports, The three Indian full service airlines, and several international carriers stopped paying 5 per cent commission on the ticket prices to travel agents from November 1. If anything, I am incensed at the airlines, for not lowering their fares by the 5% commission they used to pay the travel agents. In effect, a fare increase has been hoisted on us.

I also invite your attention to the fact that the boycott is only of the two private full-service carriers, Jet and Kingfisher. Air India is the “mai-baap” (God) of travel agents, and they will not risk their existence, by antagonising them. The travel agents have also brought on board various politicians to bring pressure for restoration of the 5% commission.

These actions of the travel agents are based on one flawed fundamental premise — that have the god given right to be protected from the changing business environment.

Over the years, technology has caught up with the agents. Today, customers, are perusing the internet, making phone calls, and obtaining the best value for my money, just as we do for any other product or service. During this time, many travel agents became air-ticket churning machines, falling in to complacency and sloth, showing an amazing lack of business foresight that borders on outright incompetence.

Most did not bother to live up to their name TRAVEL agents. Air passengers constitute less than 1% of the total passengers who TRAVEL everyday — in trains, buses, hotels, taxis, and yes, even planes.

During my days of super-hectic globe-trotting, I used to call my favourite airline, Singapore Airlines, directly. Choose the routing, make the booking, seating, meals, etc., myself. When all was done, my travel agent would be called in to just issue my ticket. I used to take back all, but 0.5% of the commission, my travel agent earned, as a discount, since I did all the work. In short my travel agent did not EARN the commission they were getting.

Corporate customers, are no different. In return for their large business volumes, they take discounts in the form of lines of credit, free airline tickets, and other such incentives.

In effect, travel agents were already operating in a “zero commission” regime. The recent actions of the airlines have only formalised the reality.

Despite my suggestions to the contrary, my travel agent never bothered to diversify in to other travel related services. As a passenger, I need to get visas, health and travel insurance, car transportation, hotel accommodation, foreign exchange, holidays, tours, and a whole host of other allied services. Services for which I would gladly pay for. Even today, customers will gladly pay the travel agent for services rendered, but it is incumbent on the agent to add value. Travel agents have to EARN their income, and justify their existence. As with any other business, their survival is not guaranteed.

As customers, the same travel agent will joyfully squeeze the last drop of blood, from his supplier of copier or printer paper, tea/coffee, or other office needs. Do they guarantee the business and survival of their vendor ?

My local bookstore is not insulated from competition by Amazon or Barnes and Noble online, and should Penguin, MacMillan, or any of the other publishers start selling their books online, no one has guaranteed the survival of Amazon, Premier bookstore, Gangarams, or any other sales channel. Similarly, my newspaper vendor is not guaranteed his livelihood by the numerous newspapers who now publish e-papers for all to read on the internet.

I know that the age of zero commission will hurt many travel agencies, and many of them will perish, but I remind them, the horse buggy perished in the face of the car, and we have a stronger transport system, the ocean liners perished in the face of the inter-continental airplanes, and they adapted in to holiday cruises and opened up a whole new industry.

These travel agents are smart people, and there are opportunities galore, both within and outside the air and travel sector. It does not take keen eyesight to see the daylight, nor does it take keen listening to hear the thunder, imagination and innovation coupled with swift thinking and even swifter action will differentiate the winners.

I do not know if I would call everything happening today, progress, but it is reality. As much as I do not like saying it, the faster the travel agents face the situation, the better off they will be.

Choosing a Good Travel Agent

Planning a vacation can be a very difficult and confusing process. This is why it is important to get a good travel agent who will help guide you right through from the start till the end. Even if you do want to travel within your country, it is always advisable to speak to those who know and are familiar with the travel industry.

Steps

Choose a travel agent online. Unlike In the olden days, travel agents are not as considered as before due to the internet. But however they are still considered a good source of information which will help you in a great way.

Make a list of things you want when choosing a travel agent

For this you will need to know your date of travel and place as well as the price range. You will also need to make a list of different travel agencies in your area and some questions to ask.

A good travel agent will ask you to outline your trip. He or she will ask why you are going to your intended destination as well as how long you plan on staying there. He or she will also ask what your travel budget is, and for all these you have to be open and honest. A good agent will be able to put together a number of packages and available transport as well as accommodation together with their estimated costs. He or she will also get you cheap Flights.

Make sure that you recognize your needs. Although your agent may ask you these rather confidential questions you should not take them as a bad sign, it is just standard procedure to help set a package that is within your means. Feel free to speak out your mind.

* Clarify and outline the main purpose of your trip
* Decide on the places you want to visit and with that making sure that the plan fits and suits everyone
* Choose your mode of transport, be it rental car, airline or boat cruise. If there is a specific airline you prefer do inform your agent about that.
* Choose a package that is reasonable and one that will not leave you broke, especially in a foreign country.

Take time to review your offer and compare with other travel agencies. It’s basically a shopping experience and just like you would do when shopping for your auto insurance you should do the same when it comes to a travel agent.

If the agent is online based, try reading reviews and asking different people about the service. If on the other hand it is a traditional one, do likewise and make sure you get something that makes you comfortable and happy.

Tips

* Make sure that the agency you are dealing with belongs to a body such as IATA and or is certified by some means.
* Do not be quick to rush and get a deal without comparing with other deals
* Beware of some fraudulent sites that may rip you off

Doing all these will certainly help you enjoy your trip.

Do You Have a Passion For Travel?

Do you have a passion for travel? Is it in your blood and you’re always looking for new places to travel and visit? How about helping others travel? Do you love sharing your trips with people in hopes they go there as well? Have you ever helped someone plan a trip? If you answered yes to any of those questions, then this article is for you.

Travel is my passion; I’ve lived in 12 states, visited 25 countries and am looking for new experiences every day. I one day decided that I really ought to turn this passion for travel into an income stream. If I’m going to be looking at travel websites, suggesting places and clipping cool places to visit from magazines, what’s stopping me from turning this great hobby into a business.

So I checked out different companies that help you become a travel agent and found a great one that fits all my needs. You have to pay a nominal fee to get started, but with that fee you get a website like Travelocity, customer support, travel agency insurance, access to travel agent rate trips, good research, back-end booking tools, internet links to include in my blog postings and Facebook page and lots of training. (Fortunately training is more like fun to me, so bring on the training).

If you desire to take your passion for travel to the next level, check out the many internet companies that enable people to become travel agents. Be wary of any hype you see and be wary of any warnings you see. There are many internet travel agencies out there and they all like to ‘bash’ each other on the internet, so don’t believe what you read from third parties. Go directly to the different companies websites and learn what you can learn.

European Car Rental – Top Ten Tips for Europe Travel – Tip #3: Insurance

Car rental insurance has to be one of the most widely misunderstood phenomena of the 21st century. In the 3+ years I have worked in this industry, close to 25% of all the issues that arise have to do with deductibles, authorizations, refunds and the geocentric validity of insurance. These situations tend to come about once a client has dropped off their vehicle and are presented with a bill that makes their eyes pop out of their head. Today we will discuss methods of avoiding this type of ocular discharge.

Let us first go over the types of insurance you will most likely be presented with when deciding what to rent for a car. There are five major types and a million different minor types, and new ones are being invented everyday. The ones you will have to keep an eye out for are:

1. Collision Insurance – Also known as CDW or LDW, collision insurance covers the body of the vehicle in the event of an accident. Please keep in mind that the last sentence is an exact measure of what it covers and when. In no case does CDW cover damage to windows / windshields, tires, roof, mirrors, interior, headlights, blinkers or undercarriage. On top of that, it only covers for an accident, not vandalism, and sometimes not for single party accidents (i.e.- running into something that isn’t another vehicle). Make sure you ask about these things when booking you reservation.

2. Theft Insurance – Simply put, it covers the car in the event that it is stolen. In order for this insurance to be valid you have to fill out a police report and alert the rental company (and credit card company if you are under their policy) within 24 hours or you will be liable for the price of an entire car.

3. Liability Insurance – Also known as Third Party or TPL, liability is almost always included in a European rental. This will cover any damages incurred to things outside of the vehicle, such as people, buildings, property, etc. So when you happen to crash it through the front window of a crowded shopping mall, you can at least be thankful you don’t have to pay for it (unless your liability insurance has a ridiculously low limit, most have unlimited coverage).

4. Personal Accident Insurance – Or PAI, this covers medical expenses for people in your vehicle in the event of an accident. Typically this type of insurance can be circumvented with a good health plan here stateside and will almost always only cover you up to a few thousand dollars, up to 20 or 50 thousand dollars in the case of death or dismemberment, but we’re all hoping that doesn’t happen anyway.

5. Personal Effects Coverage – Covers your belongings up to a predetermined amount. Usually is not valid unless you can prove the items were in the car (so take pictures of your stuff while you are there if you want this insurance).

Keep in mind that if you are cited for negligence or drunk driving, most of these insurances will be null and void. So if you are going out for a night or several of partying, it’s best to leave the rental at the hotel and take alternate transportation.

Rental companies will always try to convince you that you need to take their insurance, but this isn’t always true. In fact, if you have a US or Canadian issued credit card, it very may well have collision and theft insurance already covered for you. Most gold and platinum cards have decent coverage policies, with little to no deductible. The cards that may cover abroad are American Express & Visa (up to 30 days continuous), Mastercard (15 days continuous) and Diners Club (usually 30 days but varies). Under no circumstances should you try to use a Discover card overseas. Though you may be told by your representative that they cover the insurance, you can bet that it will not be accepted at the rental counter.

Also, don’t expect to use your stateside car insurance policy in Europe. It won’t work. Even policies that you purchase stateside with the sole intention of covering you for car rental overseas will generally not be accepted at the counter. Sometimes you can get a policy that will reimburse you for expenses related to car rental accidents, but these are treated separately since they do not directly involve the rental company.

There are exceptions to this rule, particularly in Ireland, where currently the only coverage accepted is Mastercard Platinum. It can be assumed that in the future there may be more than one country that accepts only a certain type of card so make sure you mention to your credit card company where you are picking up the car before taking their policy at face value. Get a copy of the policy in writing. Not only is this a good safety measure but it will speed up the process at the counter if the agent argues the validity of your coverage. Also, make sure to inquire into the claims procedures that your credit card company uses to enact coverage and recoup deductibles in the event of an accident. Usually there is a lot of red tape involved, but in the end if you decide to use your credit card coverage you can save anywhere from 50 to 500 dollars for a single week’s rental!

As there is an upside (saving money) and a downside (filing extensive paperwork) to using your credit card coverage, the same is true of taking the insurance from the rental company. The downsides are that you have to pay the premium to begin with, and then if you get into an accident, there is usually a deductible between $200 to $2000 or more depending on the type of car that you will be liable for. In theory you are only supposed to pay for the amount of damage done but somehow the rental companies can make a dented bumper work out to cost $2000. The unfortunate thing is that you can’t really stay to contest it. Normally you have to jump on a plane to your next destination! The upside of this is that you can walk away without having to do anything else. That block on your credit card will become a charge and that’s the end of it, until the bill gets to your house of course.

Understanding the insurance limitations and capabilities can be a mind-numbing practice. However it is one of the most important parts of the car rental experience, so it is better to be safe than sorry. Considering that the rental companies make a good portion of their profits on unused insurance, you can see why they would intentionally make it time-consuming and confusing to approach it any other way. God forbid you ever have to really apply this information to your car rental. The more prepared you are, the less you have a chance to lose during your experience. In the next chapter we will talk about how to prepare for the fun part: the actual driving.