Portal preaches online benefits to rival segment

PUBLISHED : Monday, 10 April, 2006, 12:00am
UPDATED : Monday, 10 April, 2006, 12:00am

The Asia-Pacific small and medium enterprise (SME) corporate travel market offers opportunities and challenges for traditional travel agents who use online booking tools, according to new research commissioned by online travel portal Cendant TDS.

However, hard-pressed bricks-and-mortar travel agents might think twice before implementing the report's suggestions.

It is hardly surprising that Cendant is looking at this sector, to find out where online travel booking meets resistance which can be converted into future business for itself. But it poses the question of just why is an online travel portal doing research that purports to help its competitors, in this case the corporate travel agents?

The good news for traditional travel agents is that SMEs still rely heavily on them for flights (60 per cent in Singapore and 56 per cent in Hong Kong), and to a lesser degree, for hotel bookings also.

No clear trend emerged on the perceived price competitiveness of corporate travel agents, with about 30 per cent of companies believing they offered the lowest prices, with the internet the cheapest alternative.

'Beyond pricing, travel buyers listed several key benefits as being most important for the travel agents to possess, including personal service, fast supply of air tickets and flexibility,' the report said.

These are after all the accepted attributes - and competitive advantage - of a traditional travel agent.

The survey claimed that travel buyers had a poor understanding of the 'benefits' of online tools. A clear opportunity exists for the travel agent to communicate to the buyers that online applications can provide improved productivity and more flexibility, Cendant said.

'Contrary to the perception among the buying community that an online application may create additional work for employees and management alike, online tools actually do the research for the buyer and work within the parameters of the corporate policy,' said George Harb, Cendant TDS marketing director for Asia.

This is all very debatable. The strength of a traditional travel agent is still their ability to offer tailored services and complex routings with several airlines. Online agents are still grappling with the technology that allows them to sell the complicated itineraries that business travellers so often need.

Cendant claims that online allows business travellers 'more control over their bookings and online tools always find the right lowest price, rather than the lowest price which may not fit the traveller's needs'.

'In educating the corporate SME about the benefits of online booking tools, the travel agent is able to add increased value to their customers at the same time as driving greater efficiencies,' Mr Harb said.

This all sounds suspiciously like the online portal advising traditional travel agent turkeys how best to prepare for Christmas.

Money no option

At the other end of corporate travel are the international bankers and city boys, with their annual bonus cheques burning holes in their Armani pockets.

'Since the City got their bonuses earlier in the year, we've seen a spending increase, especially on 'boys toys',' says Aaron Simpson, co-founder of the worldwide private concierge club Quintessentially.

The latest fad for the super-rich is a personal submarine. 'These have suddenly become the ultimate symbol of status and wealth,' says Mr Simpson.

Paul Allen of Microsoft has two beneath his boat, and Chelsea Football Club owner Roman Abramovich has also purchased one.

'Recently, a member requested we find him a submarine to buy - we managed to locate one, capable of taking 10 passengers and costing almost GBP10 million to build and GBP100,000 a year to maintain,' says Mr Simpson.

More predictably, spending on flash cars such as Bentleys, Aston Martins and the latest Jaguar XK or XJ cars has also revved up.

One member travelling to South Africa recently had his Aston Martin shipped over from London - just for the weekend. Still short of ideas for squandering the next bonus?

There's always the GBP77,000 'Flight of Fantasy World Air Cruise' - the ultimate in luxury travel, with a private jet taking in five-star hotels at the world's trendiest spots including Rio de Janerio, Buenos Aires, the Rockies, Beijing, Cape Town and Cairo.