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     Issue: July / August 2005

COVER STORY: Effective negotiations

TMCs still offer value
By Prudence Lui

Travel management companies (TMCs) are confident they can survive the onslaught of airline and third party websites, despite the growing trend of Internet air fare sales. Those BTN Asia-Pacific spoke to said human contact was still important when it came to travel buying.

PC Tours account director, Mr Cary Chiu, said the subject was not new. He said: “Business travellers enjoy the convenience offered by the Internet, especially when they shop around and compare prices.

“However, TMCs still have a role to play because many people prefer talking to people instead of doing business with a computer.

“This applies particularly if they have to make changes to their trip...we hear reports all the time of cases where online bookings go unrecorded and clients find this out only at the point and time of travel.

“What can they do? Who can they talk to for assistance?”

In an interview with TravelMole, BTI UK managing director, Mr Mike Platt, said an airline’s toughest competition was its own website and yields would go down because business travellers were getting access to (discounted online) fares they did not previously have access to.

However airlines contacted by BTN Asia-Pacific did not agree.

Cathay Pacific general manager of sales in Hong Kong and China, Mr Clement Lam, said although direct Internet ticket purchases were growing, they were still a comparatively small part of total sales.

He said: “Cathay Pacific’s website fares are no different from those that can be obtained in the open market.

We don’t, in other words, offer special Internet-only fares. Our website doesn’t undercut ourselves or travel agents.”

Mr Lam pointed out the big issue regarding ticket purchases made through TMCs or any other distribution channel had to do with who provided the best value and service to customers.

Meanwhile, Virgin Atlantic said although Internet bookings by leisure travellers were definitely on the rise, it did not see the figure growing as fast for the business sector where users were usually SMEs and not MNCs. Virgin marketing manager, Ms Angelina Wong, explained: “Large MNCs usually have global contracts with airlines and hotels in Hong Kong...In addition, they will include a travel agent in the contract since the agents’ role is that of an operator who handles bookings and looks after travellers’ special needs. An airline website is an extra sales channel.

“Virgin does not offer discounts on Upper Class Suite online on a regular basis.

“We don’t see business travellers booking direct online as a problem (for our yields).”

FCm Travel national leader, Mr Jonathan Kao, said the practice of cost-cutting was encouraging more companies to recommend their employees travel in economy class.

“People do take advantage of special promotions.

“Because of the aggressive marketing by agents and airlines, the leisure fares are publicly available and now there is more and more pressure from the clients to the extent that some business travellers are buying leisure packages to take advantage of the discounted pricing.”

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