Price increases likely, predicts Amex Forecast

Modest increases in global travel prices and a travel management environment that is coming to grips with evolving disruptors appear to be on the cards for 2016, according to the American Express Global Business Travel Forecast 2016 (the “Forecast”).

The report which predicts air, hotel and ground transportation pricing trends, as well as makes related travel management programme recommendations, says that in Africa, airfares are expected to increase slightly in 2016 as a result of protectionist policies impacting intra-regional flights and higher infrastructure costs.

Given Africa’s limited ground infrastructure, air travel to and from the continent continues to be the most convenient method of travel. However, high operating costs, a lack of low-cost carriers (outside of South Africa), and stringent intra-continental regulation are expected to support fare increases within the region.

“While we expect modest increases in global travel prices heading into 2016, travel managers are operating in an era of new challenges and evolving disrupters,” said Caroline Strachan, Vice President, Consulting, American Express Global Business Travel. “In addition to handling tasks such as measurement and compliance, new factors such as the sharing economy and mobile booking channels are becoming increasingly popular for business travelers. In order to thrive in this digital era, travel managers need to be aware of and dynamically adapt to these forces across a variety of geographies.”

Read about global pricing trends here.

Cheaper ain’t necessarily more cheerful…

Don’t you just hate them? Those self-entitled Generation Y whizz kids who are taking the workplace by storm and spend half their lives on their phones. It’s the generation everyone loves to hate. But if there is one important thing we can learn from them, it’s their ability to place importance on and find a healthy work-life balance.

And of course nothing impacts on a healthy work-life balance quite as much as business travel. As a business traveller, you’ve probably racked up those miles flitting from airport to airport, continent to continent on behalf of your company.

You cross time zones, get barely any sleep, gain a little weight while eating on the go and give up your precious weekends for that deal that nobody else could seal. While you’re making these sacrifices, most companies are focusing their attention on tightening their travel policy to save costs, sometimes leaving you wondering if they truly understand the hardships of corporate travel.

Cost-saving measures are often thought about in a rather one-dimensional way. Simply put, by reducing supplier costs, requiring you travel in Economy Class or booking at lower graded hotels.

But what about the hidden costs that arise as a result of introducing a travel policy that cuts costs to the bare bones. The serious impact on your productivity after 14 hours spent with your knees around your chin in economy class. The dissatisfaction you may feel at being forced to travel in this way and your propensity to stay engaged, involved and in fact employed at that company.

Do you feel unappreciated? Are you headed for burnout as you rack up those miles? And are you looking for other opportunities at a corporate whose travel policy takes into account your business travel wellness or one where you wouldn’t have to travel at all?

All is not lost though…Your first course of action should be to talk to your travellers and ASATA TMC to assess the hidden costs your travel policy could have if it is not taking into account the wellness of your business traveller.

Your travelling employees are a valuable tool to your firm’s productivity and a traveller-friendly policy that reduces travel friction as much as possible within a reasonable cost framework can be a win-win for all parties.  Let your ASATA TMC show you how…

Cheaper ain’t necessarily more cheerful…

Don’t you just hate them? Those self-entitled Generation Y whizz kids who are taking the workplace by storm and spend half their lives on their phones. It’s the generation everyone loves to hate. But if there is one important thing we can learn from them, it’s their ability to place importance on and find a healthy work-life balance.

And of course nothing impacts on a healthy work-life balance quite as much as business travel. As a business traveller, you’ve probably racked up those miles flitting from airport to airport, continent to continent on behalf of your company.

You cross time zones, get barely any sleep, gain a little weight while eating on the go and give up your precious weekends for that deal that nobody else could seal. While you’re making these sacrifices, most companies are focusing their attention on tightening their travel policy to save costs, sometimes leaving you wondering if they truly understand the hardships of corporate travel.

Cost-saving measures are often thought about in a rather one-dimensional way. Simply put, by reducing supplier costs, requiring you travel in Economy Class or booking at lower graded hotels.

But what about the hidden costs that arise as a result of introducing a travel policy that cuts costs to the bare bones. The serious impact on your productivity after 14 hours spent with your knees around your chin in economy class. The dissatisfaction you may feel at being forced to travel in this way and your propensity to stay engaged, involved and in fact employed at that company.

Do you feel unappreciated? Are you headed for burnout as you rack up those miles? And are you looking for other opportunities at a corporate whose travel policy takes into account your business travel wellness or one where you wouldn’t have to travel at all?

All is not lost though…Your first course of action should be to talk to your travellers and ASATA TMC to assess the hidden costs your travel policy could have if it is not taking into account the wellness of your business traveller.

Your travelling employees are a valuable tool to your firm’s productivity and a traveller-friendly policy that reduces travel friction as much as possible within a reasonable cost framework can be a win-win for all parties.  Let your ASATA TMC show you how…

IATA launches Local Financial Criteria for ZA

IATA has announced proposed Local Financial Criteria (LFC) applicable to BSP South Africa; criteria that was proposed by the Agency Programme Joint Council (APJC) for BSP Southern Africa (Incorporating South Africa, Lesotho, Swaziland, Namibia and Botswana) and endorsed by the 38th sitting of the Passenger Agency Conference (PAConf/38).

Why did it need to change?

The changes to the LFC were a culmination to a lengthy consultative process between Airlines and Agents on the APJC to meet the constantly changing business environment. In addition to being one of the oldest BSP operations in the world, the current LFC had not being updated in over 15 years. APJCs must meet at minimum once a year and review the Local Financial Criteria.

What is the APJC?

The APJC comprises five airline and five agency representatives. Agents are selected from the agent community and this is coordinated by ASATA, which participates only as an observer at the APJC. IATA acts as the secretariat. The role of the APJC is to develop the Local Financial Criteria (LFC) and it may also consider all aspects of the Agency Program in the country or area and make recommendations in the form of agenda proposal to the Passenger Agency Conference.

What is the deadline?

According to IATA, the effective date of the new Local Financial Criteria will be 1 February 2016, and as a result all Accredited BSP Agents will be required to ensure compliance before the said date.

What is the next step?

In December 2015, IATA will undertake an extraordinary financial assessment applying the new local financial criteria against the current audited financial statements as held by IATA. The assessment will be based on the twelve (12) months sales period between 1st December 2014 and 30th November 2015.

The result of this assessment will be communicated directly with each accredited BSP agent with a compliance date of 01st February 2016 as a deadline to provide the requested Financial Security.

Where can I find more information?

The new Local Financial Criteria applicable for BSP ZA can be viewed here.

IATA has also produced a list of FAQs for agencies that includes information on the key LFC changes, how they will affect your business and key changes that are expected in future.

Please forward any questions you may have around the LFC to natalia@bigambitions.co.za.

 

Airline ancillary sales a key focus for NDC

It’s no secret that for many airlines’ profits come from their ancillary product sales.

According to the research paper conducted by IATA and WTAAA, NDC: Travel Agencies’ Enabler to Success, on average 76% of travel agencies book airline ancillary products.

TMCs are the most likely to book airline ancillaries for their travellers, with nearly nine in 10 doing so. TMCs’ primary audience, corporate travellers, may have travel policies that allow them to buy these products.

Airlines’ websites offer the most complete selection of ancillary products – no doubt the reason why agencies use them most to book ancillaries.

To do this, though, may require an agent to toggle between a GDS, where the agent books the flight, and an airline website, to book the ancillaries. The process is inefficient, reducing agent productivity, driving up agency costs, and frustrating travel agency executives – and, by extension, the travellers the agency serves.

Graphs NDC

Agency executives don’t like this fragmentation. Agencies view having to use multiple channels to book air and ancillary products as counterproductive, and aren’t pleased with the additional effort required to integrate non-GDS transactions into their mid- and back-office systems.

This is why the researchers believe in the critical nature of NDC to the global airline industry. With NDC, airlines can, at last, help evolve the traveller’s purchase decision in indirect channels from being based strictly on price, rendering airlines as substitutable commodities, to overall value based on factors such as airports, schedule, amenities, journey cost – not to mention the value of the brand. Price will always be a decision-making criteria, but it need no longer be the lead or sole criteria.

What to learn more about NDC? Visit IATA’s NDC page for details.