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A united call for better commissions

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L-R: Hector D’Souza, Ajay Prakash, Iqbal Mulla, Heena Munshaw and Karl Dantas

In the wake of the recent order passed by the Supreme Court directing airlines to not charge transaction fee in any form while selling tickets on both domestic and international sectors, the Indian travel associations have decided to approach the apex court shortly to seek a review on the directive. A round table panel discussion recently organised by Express TravelWorld witnessed heads of travel associations voice their opinion on the matter and discuss reasons as to why issues raised by the travel agents’ fraternity were not taken seriously by the government. The panel discussion on ‘Travel agents: A survival story’ moderated by Reema Lokesh, editor, Express Travel World and Express Hospitality had members like Iqbal Mulla, president, TAAI; Ajay Prakash, immediate past president, TAFI; Karl Dantas, president, ETAA; Hector D’souza, president, L’Orient Travels and Heena Munshaw of Beacon Holidays.

The need for unity among travel agents to fight for better commissions was the common consensus among the panelists. Responding to the question raised on whether the scenario of the travel agents would change in the future considering that a lot of discussions have been seen in the past, Mulla replied, “The existence of the travel agents is at stake as agents are not being remunerated for their services appropriately. This unfair decision needs immediate clarification from the apex court on the directive passed recently. And I am optimistic that we will find a way forward to survive.”

Agreeing to the view, Prakash strongly opined, “Mere talking with the government will not solve the issues on commission/transaction fees. Nobody cares about the travel agent anymore. It is imperative that the travel associations gear up and increase their membership and be united if they want to be heard and taken more seriously. I think it is foolish to approach the government to clarify the remuneration issue, as the time for talk is over and more action is needed. A fair remuneration/commission should be asked by the government.” Supporting Prakash, Carl added, “Why are we blaming the government as it is important to first get our act correct as there are issues within the industry.”

Giving a different perspective, D’Souza said, “Unity is a big thing for the industry. According to certain 2011 reports, about 74 per cent of international bookings were done by retail agents and 60 per cent domestic. If you are looking at statistical facts it has been proven that agents have a higher share, hence it is imperative that we get remunerated fairly. Legalities of the order passed needs to be understood.” Prakash rued, “Unfortunately the government passes orders and then back tracks. The recent order passed by the Supreme Court is on wake of the DGCA circular dating December 12, 2012 which traces back to March 5, 2010 mandates commission as the legal remuneration instead of transaction fee. But the regulator itself failed to enforce and implement their own order. The apex court had directed the DGCA to examine the tariff structure of the airlines in the view of their wide range of base prices for air tickets. Despite the provision to not charge transaction fee, the DGCA failed to enforce its own direction. The airlines cannot charge transaction fee from customers.”

Munshaw pointed out that one platform is the need of the hour for the fraternity to express their issues. “But there should be unity among the members to be heard. A lot of homework is needed to be done to enhance the skills of employees in the travel industry. If one does not take on the responsibility to train staff then there will be undercutting,” she warned.

Ethical practice

The industry representatives also discussed the need for professionalism and code of ethics to help enhance, and not undercut each other’s businesses. “As everyone is vying for the same pie of profit in the industry today, we are surrendering our weakness to the clients. Forging unity among travel agents will be difficult at this stage as there are few associations in Maharashtra itself. Everybody wants to be the head of the association,” said Mulla. “Agents themselves need to behave more professionally and there has to be a code of ethics. We are so fragmented, we can’t even lobby and nobody is taking us seriously,” added Prakash.

On the change in market dynamics, D’Souza added, “It is only commission that will give us a level play to be at par with the online travel agents as technology is changing rapidly, and it is important to be updated with the latest trends. We need to go back to commissions. Consumer behaviour has changed due to inflation, economic slowdown. How do we adjust to this consumer change is the way forward. Travel agents need to realise this and adjust with the changing market trends.”

Agents have been lately looking at diversifying their business offerings. “Travel agents will survive with or without commissions. You can’t promote tourism without travel agents. There is a lot that goes into finding the correct travel package as per the needs of the market. We need to bring out the value of the travel agents in the market and take pride on what we do. This is an important aspect that the association needs to showcase,” said Prakash adding that, “As lobbying is essential, it is known that travel associations abroad talk to the governments on a weekly basis to be updated of the current trends and demands. But here since we are so fragmented, we need to put figures in place of who we are for the Indian government to take notice of us.”

As the business cannot survive without travel agents, “Online travel agents cannot provide the personal assistance as what we retail travel agents can provide. In our business there is competition which has a lot of potential. But we have only created consolidators. However, a reasonable commission needs to be decided upon urgently,” opined Carl.

Summing up the discussion, Munshaw said that it is important to unify if a change is needed and issues need to be heard by higher authorities.

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