TravelBulletin for July 2021 - To fee or not to fee, cruising Europe with Celebrity, summer cruise by Travel Bulletin

JULY 2021

TO FEE OR NOT TO FEE...

Like Hamlet’s deep pondering, whether to charge service fees is a question that all agents will need to reckon with soon

PLUS CRUISING EUROPE IN SUMMER WITH CELEBRITY

CONTENTS

Norwegian Coastal Express

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COVER STORY

Hurtigruten Digital Magazine

10 To fee or not to fee While some players in the market see the current COVID-19 disruption as the perfect opportunity to shift the paradigm, others are firmly of the belief that commission is here to stay. Like Hamlet’s deep pondering, whether or not to charge service fees is a question that all agents will need to reckon with. Bruce Piper investigates.

MONTHLY 02 State of the industry 06 Issues and trends 18 Cruise 26 Last word

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travelBulletin JULY 2021

STATE OF THE INDUSTRY

From the publisher Bruce Piper

THE angst over the country’s current lockdown frenzy and COVID-19 immunisation rollouts is masking some statistics hinting things are actually not as bad as they are being portrayed. A fact not being widely promulgated is that Australia’s COVID-19 vaccination rate is actually over 60% – at least when it comes to the vulnerable over70s population. And wasn’t that exactly the point of the phased rollout of the coronavirus jabs – to protect those most likely to end up in hospital or dead? As I’ve said before, despite the sensational daily reporting of case numbers – many luckily asymptomatic! – the key number we should be focusing on is hospitalisations and deaths. Just over 900 Australians have died with COVID-19 since the pandemic’s onset – and 852 of them were in the 70-plus cohort. Getting the oldies vaccinated was always a key focus, and it has worked. As we have seen from recent clusters, vaccinated people are simply not affected by COVID-19, and we are already approaching herd immunity levels of vaccination in the people most likely to die from this modern-day plague. By contrast, other statistics

not being reported much at all are the latest updates on suicide. The Health Department notes that 3,000 Australians end their lives each year – that’s about eight every day on average. More than are killed on our roads, and many many more than are dying from COVID-19. And that’s based on prepandemic data. Within the travel and tourism sector we all know that the mental health toll continues to be huge, but figures on industry distress aren’t something that get shown on the nightly news. Another statistic that is of keen interest for travel and tourism is a recent University of Melbourne study reported by the Australian Financial Review which found 75% of Australians want overseas travel to resume for fully vaccinated people. But before we crack the bubbly, the poll also found significant resistance to vaccination, despite 60% of the 24,000 respondents wanting unrestricted travel to return once jab rates approach 80%. We can only hope that the current lockdowns stir the country to recognise that it is possible – nay, inevitable – to live with COVID.

assumed the organisation will take a minuscule clip from the transactions which will in turn help underpin its longterm viability, making it a very clever deal indeed.

EK, Sabre stalemate SABRE-CONNECTED travel agents can no longer sell, book or service Emirates flights, after the 30 June expiry of the distribution agreement between the carrier and the GDS provider. After more than a year of talks, Emirates last month told its agent partners: “due to Sabre’s lack of progress in these discussions we would like to inform you that Emirates is now operating on the basis that no distribution agreement will be in place between Emirates and Sabre effective 1 July 2021”. EK, which in October last year launched its new NDCbased Emirates Partners Portal and subsequently imposed fees of up to US$25 per sector for traditional travel agent GDS bookings, said it “remains open to constructive and solutionoriented discussions” to find a path forward with Sabre.

CATO comes of age

IN BRIEF

TravelPay, CATO replace eNett THE travel industry was rocked early last month when the new owners of longstanding B2B payments platform eNett announced it would close down its Electronic Funds Transfer remittance system. eNett, which was acquired by WEX last year, had undergone a business review, which found that after 15 years “the technology has become outdated

travelBulletin JULY 2021

and requires significant investment”. A three month deadline was imposed, leaving the industry scrambling – but a lightning quick response by TravelPay has seen an alternative launch in double-time. The Council of Australian Tour Operators (CATO) has also been involved in the project, with its members having a keen interest in ensuring its success. No details have been provided on the financials of the CATO connection, but it’s

NEW OWNER FOR MARY ROSSI

AN EXTRAORDINARY General Meeting convened by the Council of Australian Tour Operators last month saw the organisation unanimously support the adoption of a new national structure as a “not for profit company limited by guarantee,” along with a new constitution which will see CATO launch its own accreditation program and

“

Due to Sabre’s lack of progress in these discussions we would like to inform you that Emirates is now operating on the basis that no distribution agreement will be in place between Emirates and Sabre effective 1 July 2021

”

Emirates

THIS month marks the start of a new era for Sydney’s Mary Rossi Travel, which has transitioned into the ownership of Penny Spencer and Sharyn Kitchener and their spouses, Edwin Spencer and Mike Goodall, who also own the nearby Mosman Travel. The move sees Mary Rossi Travel move out of family ownership after 51 years, with Claudia Rossi Hudson and co-owner Roger Hudson handing over the reins of the agency founded by Claudia’s late mother in 1960. Mary Rossi Travel will continue to trade from its Neutral Bay location, and remain a proud member of Virtuoso and Magellan. The deal’s sign-off (pictured) was celebrated by Mary Rossi Tavel Manager Michael Schischka with Penny Spencer, Sharyn Kitchener, Mike Goodall and Claudia Rossi Hudson.

explore solutions around consumer protection. The changes “better reflect CATO’s status as a national body and enable it to move forward with progressive initiatives,” said MD Brett Jardine, with a subsequent Annual General Meeting confirming the re-appointment of incumbent Chairman Dennis Bunnik for a further two years as well as a contested election for Board positions resulting in Brett Mitchell from Intrepid, Julie King of Julie King & Associates and The Travel Corporation CFO

James O’Donnell taking up positions as CATO directors. The new constitution includes a CATO Member Code of Conduct and “removes the requirement for members to be ATAS accredited,” Jardine added.

Three more months... HEALTH Minister Greg Hunt last month predictably extended the Federal Government’s Human Biosecurity Emergency period through until 17 September, meaning Continues over page

travelBulletin JULY 2021

STATE OF THE INDUSTRY

AA follows QF down

ABERCROMBIE & Kent (A&K) last month confirmed the departure of its long-time Regional Managing Director Australia Asia Pacific, Sujata Raman, after more than 30 years with the business. Raman has “resigned to pursue other interests,” the company said, paying tribute to her contribution which has seen A&K Australasia “now recognised as the leading luxury travel business in Australia”. Raman’s threedecade tenure also saw the company’s DMC inbound and domestic business grow significantly, while A&K has become one of the region’s largest cruise ship handlers.

MAIN DOMESTIC ROUTES

VISITOR ARRIVALS

Top 10 domestic city pairs, April 2021

City pair

Passengers Passengers % change YE Apr 20 YE Apr 21 (000) (000)

Melbourne-Sydney Brisbane-Sydney Brisbane-Cairns Brisbane-Melbourne Brisbane-Townsville Gold Coast-Melbourne Gold Coast-Sydney Adelaide-Sydney Ballina-Sydney Adelaide-Melbourne ALL CITY PAIRS

7,994.2 4,254.2 1,147.5 3,179.8 920.6 1,864.7 2,426.0 1,639.8 .... 2,222.6 54,283.1

1,351.8 893.5 765.0 613.4 520.5 499.8 482.2 450.7 438.1 423.6 16,350.3

RESIDENT RETURNS

Top 10 destinations, April 2021 Country of residence

April 2019

New Zealand USA UK Vanuatu Tonga Philippines China India Singapore Solomon Islands All visitors arrivals

-83.1 -79.0 -33.3 -80.7 -43.5 -73.2 -80.1 -72.5 N/A -80.9 -69.9

119,220 60,830 59,150 1,410 1,040 15,820 96,240 30,920 29,850 530 700,400

April 2020

April 2021

370 16,320 180 880 140 660 0 420 40 360 80 320 50 310 80 280 60 230 0 180 2250 22,610

Top 10 destinations, April 2021

% change - original Apr 19/ Apr 21 -86.3 -98.6 -98.9 -70.4 -64.9 -98.0 -99.7 -99.1 -99.2 -66.4 -96.8

Source: ABS

Country of stay

April 2019

New Zealand 129,210 India 30,270 USA 81,130 Papua New Guinea 7,990 Pakistan 3,690 China 63,540 UK 35,670 Singapore 38,900 UAE 5,970 Indonesia 108,010 All resident returns 916,400

April 2020

April 2021

850 10,250 2,530 670 900 600 210 500 650 440 380 340 1,540 330 240 250 140 180 760 170 17,050 16,990

% change - original Apr 19/ Apr 21 -92.1 -97.8 -99.3 -93.7 -88.1 -99.5 -99.1 -99.4 -97.1 -99.8 -98.1

Source: ABS

Source: BITRE

+3 33 -8 .3 % 7.

DOMESTIC AIR MARKET April 2021

Total pax carried Revenue pax km (RPK) Available seat kms (ASK) Load factor (%) Aircraft trips (000)

Apr 20

Apr 21

0.15m 0.16bn 0.56bn 28.2 8.2

3.52m +2,310.4 4.00bn +2,438.9 5.67bn +914.8 70.6 +42.4* 42.7 +418.2

.9 %

”

Joel Katz, Managing Director, CLIA Australasia

End of an A&K era

DATA ROOM

-88

AMERICAN Airlines has confirmed that, like its alliance partner Qantas, it will reduce base commission for Australian travel agents. The move is effective 1 July 2022, with AA telling travelBulletin that reducing base commission would “enable American to continue operating services to connect countries and those customers eligible to travel in these challenging market conditions”. Just last March American Airlines and Qantas were

“

After months of discussions with government the suspension has been extended again without any clear route towards a careful and responsible resumption of cruising

re-authorised by the ACCC to cooperate on transPacific routes for a further five years, with the pact explicitly permitting them to “collaborate on distribution strategies, including travel agency arrangements”.

3% .2% -96 .8% -88

existing restrictions on outbound international and cruise ships in Australian waters will have been in place for a full 18 months. Hunt cited “specialist medical and epidemiological advice” for the move, with the Chief Health Officers from Australia’s states and territories concluding that the international COVID-19 situation “continues to pose an unacceptable risk to public health”. AFTA said the decision once again reinforced the need for wider, ongoing support for travel agents and businesses, with Chairman Tom Manwaring also urging the adoption of “commonsense positive measures to get Australians travelling again...we need greater clarity on the decision triggers for Government on re-opening our international border”. With no accompanying road

map for a return to normality, CLIA Australasia MD Joel Katz expressed his utter frustration. “Our industry needs some certainty, but after months of discussions with government, the suspension has been extended again without any clear route towards a careful and responsible resumption of cruising,” he fumed.

-90.7%

Continues from previous page

Growth % Year end Year end Apr 20 Apr 21

Growth % 54.28m 16.35m -69.9 63.36bn 18.45bn -70.9 79.74bn 29.33bn -63.2 79.5 62.9 -16.6* 579.2 264.6 -54.3

-9 7.9 %

*Percentage points difference

Source: BITRE

-9 5

.2 %

-95.2% -96.4%

INTERNATIONAL AIR MARKET SHARE Share of passengers carried – April 2021

HEADLINES 01 Jun 02 Jun 03 Jun 08 Jun 09 Jun 09 Jun 10 Jun 10 Jun 11 Jun 17 Jun

Travello’s millenial push Former CATO chair dead eNett EFT shutdown TA urges ‘COVID-normality’ Melb lockdown hits travel hard HLO cuts COVID flexibility AA follows QF comm cuts Travel ban extended Emirates/Sabre stalemate QF adds more Embraers

travelBulletin JULY 2021

INTERNATIONAL AIR ROUTES

Others, 11.8%

17 Jun 21 Jun 22 Jun 22 Jun 23 Jun 23 Jun 24 Jun 25 Jun 25 Jun 28 Jun

EK’s first loss in 30 years No grant relief for multis ETG independent model CTM maps growth plan AFTA reports $2.1m loss $80 billion tourism hit TravelPay, CATO EFT solution Shares for Flight Centre staff New HLO Head of Retail and Commercial CATO’s “Watershed moment”

Top 10 city pairs, year end April 2021

American Airlines, 1.6% Etihad Airways, 1.7% United Airlines, 2.0% China Southern Airlines, 2.2%

City pair Air New Zealand, 39.6%

Jetstar, 4.0% Emirates, 4.6%

Qatar Airways, 7.0%

Singapore Airlines, 9.5% Qantas Airways, 16.1% Source: BITRE

Auckland-Sydney Doha-Sydney Auckland-Brisbane Auckland-Melbourne Guangzhou-Sydney Doha-Melbourne Singapore-Sydney San Francisco-Sydney Doha-Brisbane Dubai-Sydney Top 10 City Pairs Other City Pairs ALL CITY PAIRS

Passengers YE Apr 20

Passengers YE Apr 21

1,382,503 494,278 834,211 1,083,960 313,458 304,772 1,363,242 302,193 6,309 692,562 6,777,488 30,373,333 37,150,821

65,734 55,060 39,732 39,240 34,917 34,050 29,118 28,203 27,336 26,608 379,998 452,082 832,080

% of total % change 21/20 7.9 -95.2 6.6 -88.9 4.8 -95.2 4.7 -96.4 4.2 -88.9 4.1 -88.8 3.5 -97.9 3.4 -90.7 3.3 +333.3 3.2 -96.2 45.7 -94.4 54.3 -98.5 100.0 -97.8

Source: BITRE

travelBulletin JULY 2021

ISSUES AND TRENDS

AFTA VIEW Tom Manwaring, Interim Executive Chair Australian Federation of Travel Agent

NEW WHOLESALE OPTION FOR AGENTS FLIGHT Centre last month unveiled an aggressive ramp-up of its The Travel Junction wholesale operation, including a new technology platform designed to improve flexibility for travel agent partners. One of the benefits of the revamp for agents sees deposits refunded and booking amendments made without fee if suppliers don’t charge, as well as the provision of COVID credits for when agents and their clients need them. While Flight Centre’s predecessor brand Infinity Holidays has now been retired, the move indicates a clear intention to distribute products on behalf of its suppliers right across the industry – not just to its in-house retail operations. The move is being viewed by some industry observers as opportune, given the fierce reaction to new policies being introduced by Helloworld’s Viva Holidays, Sunlover, Asia Escapes and other wholesale brands, which effective this month are reverting to pre-COVID conditions. Helloworld agencies were livid when the move was made last month to retain deposits, with the company’s head office emailing resellers to chastise “a small number of agents” who they claim had been making fake bookings for the future to take advantage of the deposit transfer. Meanwhile, the pandemic-led pivot to domestic has also providing opportunities for newcomers like Holidays of Australia, as well as industry stalwart Simon Bernardi’s Australia and Beyond Holidays business – not to mention a host of other niche domestic players.

travelBulletin JULY 2021

AS WE reach the end of the financial year, and 16 months of living (or surviving!) with COVID, it’s timely to reflect. We can and should be extremely proud of the way our sector has come together so successfully to push for support. While these times have, and no doubt will continue to be testing for us as individuals, as businesses and across our sector and beyond, we have achieved much. Our combined effort from members meeting with parliamentarians in their electorate offices through to AFTA’s ongoing direct lobbying and engagement has meant that now more than ever before our decision makers and policy makers know we matter. AFTA has directly, and in collaboration with other groups, made sure our needs for ongoing support are heard. So far we have secured $258 million in Federal Government support. We are very grateful for this and for the ongoing ear of The Hon Dan Tehan, The Minister for Trade, Tourism and Investment. We continue to advocate daily for ongoing help. Until international travel resumes, that aid is critical for so many of our travel businesses and the skilled travel professionals who work within them. As the rapid spread of the Delta strain in recent days has shown, elimination of this virus, at least in the immediate future, is simply not going to happen. Vaccination of most of the population is at the heart of our ability to function and travel normally. We look to the precedent our near neighbour Singapore is setting. Singapore’s roadmap to return to normalcy is based on the reality that two-thirds of the community will have received at least one vaccine dose within weeks and be fully vaccinated by early August. Singapore intends treating COVID like the flu, with an end to quarantine, an end to close contacts of cases having to isolate and a transition to self-administered tests. There’s no doubt that we need more of the Australian community vaccinated. We need incentives to lift the current 4.7% of the population vaccinated to over the majority. We need as many Australians as possible to be travel ready so that we can all get travelling again.

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ISSUES AND TRENDS

AFTA BRUISED BUT NOT BROKEN BY COVID LAST month’s release of the Australian Federation of Travel Agents Annual Report provided stark confirmation of an annus horribilis as the organisation grappled with the loss of two CEOs, minimal revenue due to the suspension of membership fees and a decimation of staffing levels – all at the same time as taking the plight of the industry to Governments across the country. As with the rest of the travel sector, the COVID-19 pandemic looks likely to force AFTA to reinvent itself, with some of its previous initiatives now irrelevant or unsustainable in the new world in which we find ourselves.

“

As with the rest of the travel sector, the COVID-19 pandemic looks likely to force AFTA to reinvent itself, with some of its previous initiatives now irrelevant or unsustainable in the new world in which we find ourselves

”

AFTA’s top line loss of $2.13 million was shocking enough, but it was the detail behind the numbers that really caused readers to draw breath – almost $600,000 in termination payments and redundancies, $450,000 for consultancies, $150,000 in legal

travelBulletin JULY 2021

fees and more than $50,000 on entertainment. Even more concerning was confirmation that the most recent AFTA CEO, Darren Rudd, actually resigned on 01 April this year – after the balance date for the Annual Report, meaning any payout he received will have not been reflected in the figures. Cash flow appears to have been a key concern, with over $3.4 million withdrawn from the AFTA “financial instrument” nest egg accumulated with the 2018 sale of the Federation’s Sydney office, meaning there was just $1.8 million remaining in the fund. The AFTA Travel Accreditation Scheme (ATAS), carefully created and nurtured over many years to build confidence in the industry, remains in “monitor and support mode” – meaning that effectively it is not an accreditation scheme at all. The AFTA report confirmed that key provisions of the program, relating to requirements for participants to undergo financial assessments and prove they are not operating insolvently, are not being implemented, while the ATAS Complaint Appeal Committee (ACAC) has had its operations suspended until

31 October this year, when a further review will take place. In fact AFTA’s Consumer Liaison Manager responsible for managing complaints brought under the ATAS charter resigned in September last year and was not replaced, the report confirms. Also on life support is the AFTA Chargeback Scheme, the innovative, member-owned Mutual Fund that protects travel agents from debit and credit card chargebacks resulting from end supplier insolvency. Future coverage was suspended from 1 May 2020, and it’s now clear that the insurance arrangements which backed the program are no longer viable in a post-pandemic environment meaning ACS will be wound up. AFTA Chairman Tom Manwaring said it had been “a year like no other, of collaboration and pulling together for the greater good,” with the impact of the pandemic resulting in a marketplace the industry could never have imagined. “While our balance sheet is diminished, it remains strong and AFTA is well-placed to continue to provide support for the post-COVID rebuild,” he concluded.

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COVER

TO FEE OR NOT TO FEE... The services provided by a professional travel agent are clearly valuable – but despite repeated calls over the years, the industry as a whole has never really managed to come to grips with remunerating advisors for their advice. Last month’s Qantas commission cut announcement renewed the push for industry businesses to pivot to a service fee model, and while some players in the market see the current COVID-19 disruption as the perfect opportunity to shift the paradigm, others are firmly of the belief that commission is here to stay. Like Hamlet’s deep pondering, whether or not to charge service fees is a question that all agents will need to reckon with. Bruce Piper investigates.

HILE not exactly unexpected, the move by Qantas to slash travel agent base commission on international flights from 5% to 1% from July next year has been widely seen as kicking the industry while it’s down. The carrier says the move will save it tens of millions of dollars a year, and is part of moves to secure its future by cutting $1 billion in annual costs. Whatever the rationalisation, the bottom line is that, as the carrier’s Executive Manager of Global Sales & Distribution, Igor Kwiatkowski said, “it is expected this change will likely accelerate the growing industry trend towards a ‘fee for service’ model that has already taken place in many markets overseas”.

travelBulletin JULY 2021

COVER

Qantas’ move to cut commission will save the carrier “tens of millions of dollars” and likely accelerate the trend towards a fee for service model for the industry.

Indeed some agents in Australia are already successfully bolstering their bottom lines with service fees – but the “acceleration” referred to by Kwiatkowski has so far really happened at a glacial pace. Those with long memories will recall that the last time Qantas cut commission – about 15 years ago – there was plenty of weeping, wailing and gnashing of teeth, and AFTA actually operated a national roadshow and training program to help the industry shift to a feebased model. Indeed some industry veterans remember suggestions for this change to happen as far back as 1990. And here we are, more than 30 years on, with seemingly minimal progress made. It’s absolutely true that travel agents in other markets – particularly those with wellheeled, demanding clients – have been successful in extracting recognition of their expertise in the form of service fees. As Qantas noted, a fee for service model “compensates travel agents for

travelBulletin JULY 2021

the added value and bespoke service they provide customers beyond the logistics of booking, particularly for managing complex itineraries”. However the Australian retail market is markedly different to most other countries, with the approach and dominance of one of our major players perhaps limiting what the rest of the industry has been able to achieve on this front. And that’s because the bottom line is that, when it comes to leisure travel, Flight Centre simply does not believe that service fees should be part of the equation.

SKROO’S VIEW FLIGHT Centre Travel Group co-founder Graham Turner is adamant that commissions will continue to be the main way that travel agencies are remunerated for their work into the future. While noting that corporate travel is generally transacted on a fee for service basis, Turner told travelBulletin “in leisure – air,

packages, hotels, tours, cruise – as far as we’re concerned, it works on a commission basis. If suppliers want the business, they should pay a fair return on that”. He admitted that in the Australian domestic aviation market, where Qantas is dominant, that may be an issue given the QF approach. “But there is competition, and we’ll be surprised if competitors like Virgin, Rex, Alliance Airlines, don’t pay a reasonable margin for us to supply them with sales,” he said. And when international travel finally returns, “if Qantas doesn’t pay agents, then their competitors certainly will,” he said. “International routes are going to be very competitive – all airlines, whether from the Middle East, Asia or America – will want the business. I think our margins will actually tend to go up as the market comes back,” he optimistically opined. Turner noted that for the mass market Flight Centre brand, effectively the company’s main

competitors are the suppliers themselves. “We wouldn’t want to be charging a fee to book a flight with an airline, when that carrier is offering the same price for the ticket,” he said. “We don’t want a situation where we are more expensive than the airlines themselves.” However for highertouch clients, perhaps through the Travel Associates brand, sometimes fees are appropriate. “For the high-end customers sometimes our consultants do extra work like booking restaurants, which aren’t commissionable, so fees are sometimes charged then. For the mass brand it’s normally commission, unless we’re doing something unusual for our customer”. The Flight Centre MD is confident that the company’s global distribution network is something that suppliers will want to access, and therefore pay commission. “Some suppliers are happy to target direct bookings, and that’s fine if you’re happy not to work through

the distribution system. But if you do want the business that travel agents can deliver, you have to pay for it whether you like it or not.”

THERE’S VALUE IN EXPERTISE WHILE the bottom line price of a flight will always be an issue for some consumers, the current COVID-19 situation is being seen by many travel agents as providing a unique opportunity for recognition as the professionals that they are. The changing landscape of travel is likely to mean organising international trips becomes significantly more complicated, requiring vaccine passports and the navigation of perhaps rapidly changing restrictions and rules to ensure clients get where they need to be. There are plenty of clients who are prepared to pay for this expertise, and the experience of travel agents has them ideally placed to capitalise on this shift. Richard Taylor from The Travel

The approach of major player Flight Centre has potentially limited what others in the industry can achieve with charging service fees, as Flight Centre maintains that a commission basis will be what leisure travel will work on.

“

Some suppliers are happy to target direct bookings, and that’s fine if you’re happy not to work through the distribution system. But if you do want the business that travel agents can deliver, you have to pay for it whether you like it or not

”

Graham Turner, Managing Director, Flight Centre

Graham Turner, Managing Director, Flight Centre Travel Group

travelBulletin JULY 2021

COVER

L-R: Ann-Catherine Jones, Jones & Turner Travel Associates, Shelley Brice, Shelley Brice Travel, Sonia Jones, Sonia Jones Travel

Community Hub (whom we have to thank for the ingenious “to fee or not to fee” title of this story) has been convening regular webinars to help the industry share ideas, with a high-powered triumvirate of participants providing advice from the front lines. Ann-Catherine Jones, Shelley Brice and Sonia Jones are all from different types of travel agencies, and have generously provided their input to

several recent heavily attended online sessions. Ann-Catherine Jones from Jones & Turner Travel Associates in Paddington, NSW, told travelBulletin “my experience over the past 12 months has led me to believe that certain sectors of the marketplace and certain clients are ready for fees”. She said customers were asking more and more “what is your schedule

Many travel agents with well-heeled, demanding clients have been successful in charging service fees.

travelBulletin JULY 2021

of fees?”, “how do I pay you for your service?” and “I am happy to pay for your advice”. However if advisors are still working in a ‘price beat’ style of environment, where they are competing against OTAs and trying to lure do-it-yourself clients with a deal, the situation is more difficult because travellers simply see them as a transaction facilitator. “There is always going to be a sector of the market that is price-focused, and that is not the type of traveller who will be happy to pay service fees,” she said, adding that individual agents will need to work out how to navigate this for their own businesses. “Transparency is the key to building trust and acceptance around fees. For too long we, as an industry, have hidden behind the commissions we’ve earned and buried our fees in the product, rather than listing our fees up front and having honest conversations with our clients around how we earn our money. Without being honest and upfront with regard to this, we are leaving ourselves wide open to the PR nightmare of 2020 when we were all tarred as ‘rogues’ and ‘rip off merchants’

in the future, and even worse, working for zero money again,” Jones said. “As we move to noncommissionable product over the next few years (and I believe that is coming), we need to see the silver lining that having a fee structure will mean that only clients that respect your value will use your services – and clients who can’t see your value will be left navigating the wilds of the internet and OTAs themselves.” Shelley Brice, who runs Shelley Brice Travel in Perth, agrees that the time has come to take the step towards service fees. “Now is the perfect time to flip the narrative. Pre-COVID the landscape was dog-eat-dog – all price driven by the customer. Now it’s up to you how you choose to move forward. I urge everyone to question time versus reward – the landscape has changed in terms of what we need to navigate in terms of booking someone’s arrangements, changes, border closures, entry passes – so getting paid zero commission will make you resentful to assist, whereas if you

were confident in explaining what comes with the fees then the work would come from a level of service to your client,” she said.

“

For too long we, as an industry, have hidden behind the commissions we’ve earned and buried our fees in the product, rather than listing our fees up front and having honest conversations with our clients around how we earn our money

”

Ann-Catherine Jones, Jones & Turner Travel Associates

But there’s also a mental toughness required. “Don’t whinge about doing the work and

Being up front about fees, as well as being willing to lose clients who aren’t prepared to pay for your expertise is an important part of introducing services fees.

not getting paid for it – the ball is in your court as an individual and as a business owner to lay the foundations to rebuild... stand proud of your experience, connections and ability to navigate this period,” Brice told travelBulletin. “Get used to people saying no to you – that is not a reflection of you, but simply that they don’t value service and paying for it, and that is OK. It’s time to raise the standards of our industry and our profession, and I believe that starts with fees”. The third member of the trio, Sonia Jones, operates Sonia Jones Travel in north-west Brisbane, and is also an advocate for the introduction of fees, urging agencies to “redefine what your business is – or who you are as a travel professional”. “Demonstrate your worth, knowledge, connections and experience,” she told travelBulletin. “Many travel professionals are fearful about the reaction that they may get from their customers by introducing fees. Be prepared to lose some customers over it – but

Gil McLachlan, CEO, McLachlan Travel Group

travelBulletin JULY 2021

COVER

Ari Magoutis, Executive General Manager, Express Travel Group

you will gain some too.” Jones said travel agents should use fees as a way to value their worth, knowledge connections and experience – “all the reasons your customers book with you in the first place!” Another long-time advocate for service fees reflecting the industry’s professionalism is veteran Gil McLachlan from McLachlan Travel Group in the Sydney suburb of Manly. “Our very strong position is that fees have no connection whatsoever with commission levels,” he said. “The fee is a private arrangement between the advisor and the client, and is applied to cover services and benefits considered by the client to be of high value. It is not applied to make up for inadequate commissions,” he told travelBulletin. “The commission is a separate arrangement between the agent and the supplier.” Like Flight Centre’s Graham Turner, McLachlan is clear that commissions are reflective of the support provided by travel agents when they make a sale of a supplier’s product. “If the supplier reduces commission, to retain support it would need to

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provide an alternate commercial benefit that equals or exceeds the benefit previously provided through commission,” he suggested Express Travel Group is also on board, with Executive General Manager Ari Magoutis telling travelBulletin “in an environment where all moving parts of the travel value chain are rationalising costs, where there is complexity in booking and “un-booking” travel (as we have seen extensively last year and is still continuing), there should be no doubt at all as to the importance of a professional travel advisor in this process and their right to charge a fee for this service.” Magoutis said the question should not be “to fee or not to fee”, but rather, how much is an adequate rate for service. “At ETG we have always advocated for fair and reasonable fees to be charged considering the expertise of our members in planning and booking travel for their clients. An open conversation about these charges during the travel planning process should alleviate any client concerns or surprises after the event,” he added, noting

the group also provides a generic Terms of Trade document, should members require a reference point as to how to include fees in their own agency terms.

FLEE FROM THE FEAR LIKE many in the industry, MTA Travel co-founder Karen Merricks is somewhat bemused at the longstanding reluctance of many agents to charge fees. But she acknowledges that historically there may have been a good reason. “Sometimes ‘mark-ups’ were included in parts of travel itineraries – in essence service fees by another name. These were often not disclosed to the customer and incorporated in an overall price – possibly to avoid having to justify or discuss the ‘fee’ with the end customer. One of the fears that result in fees being hidden is that they get found out and customer distrust is the result,” Merricks told travelBulletin. “In the past agents had been nervous about charging a service fee for fear that they wouldn’t be

competitive with an agent who didn’t charge service fees. Additionally, while agents understand the need to charge a fee for services provided, it’s the ‘how’ that becomes the challenge,” she said. “Fears such as what happens if the customer says no are common. Am I able to confidently communicate my value proposition (do I in fact know what my value proposition is?) – and am I willing to let the customer go if they decline to pay the service fee?” Merricks noted that in the MTA model, advisors are continuing to move away from single transaction customers in favour of highly valued repeat clientele. “It is necessary to know your customers and segregate your customer base to ensure that you are spending more time with people who value and are willing to pay for your expertise...if you are spending large amounts of time on a transactional type customer you are perhaps reducing the amount of time you can work on your high-value customers and potentially placing your business at risk.” She said ultimately the choice regarding fees is up to an individual agent – noting that “often we have found that the fear of introducing a service fee is often greater than the actuality”. Rival home-based network TravelManagers has also facilitated the charging of fees by its members, having provided training on the topic for many years. “TravelManagers is a long-time advocate for charging a fee for service where commissions are not applicable, or not at a level to cover the cost of consultation,” according to TravelManagers Executive General Manager Michael Gazal. “This applies whether it is a ‘plan to go’ or ‘commitment deposit’, right through to providing a full schedule of fees covering services

“

Often we have found that the fear of introducing a service fee is often greater than the actuality

”

Karen Merricks, co-founder, MTA Travel

such as frequent flyer redemptions, amendments to bookings and any other non-remunerated services advisors offer their clients”.

UNITY IS STRENGTH - BUT IS ALSO VERY UNLIKELY GIVEN the crossroads that the industry finds itself in at the moment, some have made the eminently sensible suggestion that a standardised form of service fees could be introduced by the Australian Federation of Travel Agents. If, as MTA’s Merricks has suggested, reluctance to introduce service fees comes from fear that a rival agent will then be able to undercut and steal a client, having a universal table of recommended charges would surely facilitate this “new” way for the industry to have a viable income stream. However unfortunately there are many issues with such a suggestion – not least of which is that as noted earlier, Flight Centre doesn’t see service fees as a way forward. With Flight Centre MD Graham Turner being vice-Chairman of AFTA, and the

organisation also holding another board seat, it’s extremely unlikely that a unified voice on this issue will be achieved through the industry peak body. And in fact if Flight Centre sees airlines as its direct competitors and doesn’t want to be undercut by them, then the same principle would definitely apply to rival travel agencies. AFTA Chairman Tom Manwaring, who heads up Express Travel Group, noted that “service means respect – and you pay for service” but also highlighted the “diverse” views within the AFTA board. The Australian Competition and Consumer Competition has long prioritised the interests of consumers, and it’s extremely likely that standardising service fees would be seen as anti-competitive and require an exemption from competition law – something that AFTA in its current form is unlikely to seek. So in the end it is up to each individual agency – but given the massive amount of expertise and experience in the Australian travel industry there’s absolutely no reason that consultants should not be confident to charge for their professional services.

travelBulletin JULY 2021

CRUISE

CRUISE’S SUMMER SEASON ON A KNIFE’S EDGE By Myles Stedman WITH 2021’s Kimberley cruise season lying bleeding in the moonlight, the sniper that is the Australian Government’s total apathy toward the cruise industry has now turned its scope towards the summer season. Early last month, Cruise Lines International Association’s local Managing Director Joel Katz was bold enough to praise new Federal Minister for Tourism Dan Tehan for his enthusiasm regarding the restart of the cruise industry at a forum held by News Corporation on Sydney Harbour. However, little more than a week later, with barely the time for the smile to subside from cruising’s proverbial face, Federal Minister for Health Greg Hunt had once again handed down an extension of the human biosecurity emergency period for a further three months, until mid-September. It was akin to Mr Bumble laughing in Oliver Twist’s face when he dared to ask for more. Not long afterward, one of the Kimberley’s final holdouts, Silversea Cruises, confirmed the cancellation of its heavily booked season in the region, citing factors “outside of its control”. Whose control these factors are under is unclear – after all, in the United States and Europe, where the coronavirus situation is far more acute, there are plenty of virus-free cruises being operated, and many passengers lining up to board them. Nevertheless, the tap-out from Silversea left Ponant as the last

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remaining overseas-based cruise line “planning” to sail in the Kimberley this year, with APT, Coral Expeditions and Island Escape Cruises still operating in the region. With other cancellations including Carnival Cruise Line, which scuppered cruises through to midNovember, and Holland America Line, which cancelled Oosterdam’s departures in Australia through to late December, the Grim Reaper is now on its way to the summer season’s front door. What’s more, politicians no longer have any excuse not to be aware of the state of affairs faced by the cruise industry. Not only have Members of Parliament been doorstopped in Canberra by cruise bosses on multiple occasions, but more than 40,000 emails have been sent to state and federal MPs via the Ready, Set, Sail campaign

CORAL EXPEDITIONS UNVEILS 2022 SAILINGS

launched by CLIA. It is hard to believe that the crusade, which has exceeded even the expectations of Katz, has missed even one state or federal electorate among the 40,000 pleas sent. However, with the campaign now around two months old, and the cruise industry having heard nothing but another “no” from the Federal Government since, it is hard to envision when, if at all, cruising in Australia will restart this year.

AUSTRALIAN small ship cruise operator Coral Expeditions is reaping the benefits of its local flagging and small size and has announced its full schedule of sailings for 2022, including beefing up its Kimberley departures in response to demand and releasing its 2023 dates as well for that region. Coral has replaced a number of its international voyages for next year with domestic departures, due to the ongoing uncertainty of border restrictions, with highlights of the schedule including Australia’s Great Southern Coastline exploring the Southern Ocean and Great Australian Bight, and Across the Top which visits

Australia’s most remote coastal regions from Cairns to Broome. In the Kimberley, the ten new dates announced in 2022 will add over 1,200 berths from April to June next year and according to Coral Expeditions’ Commercial Director Jeff Gillies, will give Australians more of a chance to explore this region which has proved very popular with travellers this year and next. The cruise line has threaded the needle carefully on Australia’s rigorous cruise regulations with extensive COVID-19 protocols and a SailSAFE plan and is set to be one of the few operators who will be sailing the Kimberley this season.

“

Politicians no longer have any excuse not to be aware of the state of affairs faced by the cruise industry

”

Vandekreeke hangs up her cruise shoes AFTER 13 years at the helm of the Carnival Cruise Line business in Australia, President and General Manager Australia Jennifer Vandekreeke will leave the company to take up a yet-to-be announced role within the local travel industry. “After 13 fun-filled years of waterslides, cucumber sunrises and the occasional sing-along with [shipboard cruise band] Music Manila, I will

be leaving the Carnival team to take on a new challenge,” Vandekreeke told travelBulletin. “I am leaving the brand and the business in the very best of hands with the local Australia team, and I can’t wait to see where they take our fun brand next.” Carnival Cruise Line is yet to announce who Vandekreeke’s replacement will be.

Australian ports may remain empty for another summer season

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CRUISE CDC rules struck down THE Centers for Disease Control & Prevention’s (CDC) cruise rules have been struck down by United States District Judge for the Middle District of Florida Steven Merryday. The national public health institute will not be able to enforce its Conditional Sailing Order from 18 July, which includes a mandate of a 95% vaccination rate of crew members and passengers. The CDC can propose “a narrower injunction” by 2 July, the ruling stated, in order “to further safeguard the public’s health while this action pends”.

MSC Explora brand A NEW luxury cruise brand, Explora Journeys, has been unveiled by MSC Group, with guests to travel to lesser-sailed harbours to enjoy a “more authentic experience” and a “slower pace of travel”. Explora will offer guests exclusive access to the destinations it visits, through non-conventional arrival & departure times and overnight stays, with trips starting at seven nights.

Hurti adds Galapagos HURTIGRUTEN Expeditions is continuing its expansion, introducing exclusive Galapagos Islands expedition cruises from January 2022, in partnership with Ecuador-based Metropolitan Touring. The cruise line will expand the breadth of its Expeditions destinations to include 10-day adventures in the archipelago, on board the fully upgraded 90-guest Santa Cruz II.

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CLIA VIEW

Joel Katz, Managing Director CLIA Australasia

BREAK THE CYCLE OF INACTION AROUND the world, close to 600,000 people have now sailed aboard cruises that operate under the strict new health protocols our industry has created in response to COVID-19. Country by country, these measures are being carefully implemented in close collaboration with health authorities, allowing travellers to return to sea while at the same time maintaining health and safety as the top priority. Hundreds of cruises have sailed since operations first resumed last year, and the list of locations is growing all the time. Places like Taiwan and Singapore were early pioneers, followed by several major EU countries, the United Kingdom, parts of the Caribbean and now the United States. Frustratingly, no global cruise lines have sailed in Australia and we are now the only major cruise market in the world where governments have made no progress towards a resumption of cruising when health conditions allow. Despite an enormous amount

of lobbying by our industry over many months and significant achievements overseas, the Australian Government recently extended its cruise suspension without any firm plan for moving forward. The extension itself was not unexpected, but the lack of a clear framework for the future is deeply concerning. CLIA’s Ready, Set, Sail campaign has generated more than 40,000 emails to Australian MPs so far, voicing support for cruising from thousands of travel agents, tourism operators, cruise line suppliers and the travelling public. There can no longer be any doubt about the size of Australia’s cruise community and the number of local businesses that have been devastated by the ongoing suspension. Cruising is worth more than $5 billion a year to the Australian economy and supports more than 18,000 jobs. We need to break the cycle of inaction in Australia and join the rest of the world in progressing responsible plans for cruising’s revival. Visit www.cruising.org.au to find out more.

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EUROPE

MAKE YOUR EUROPE ADVENTURE CRUISEY

Left: Relax and unwind as you explore destinations in Europe such as Italy with Celebrity Cruises ©Celebrity Cruises Top: Take in the colourful buildings of Portofino when sailing from Rome to Barcelona. Right: Indulge in local produce in Palma.

With Australians itching to get overseas and start exploring the world, seeing Europe on a cruise is the perfect way to safely pack in multiple destinations to your next adventure, discovers Myles Stedman.

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USTRALIANS are no strangers to travel in Europe, with the continent one of the main destinations for travellers from Oz in 2019. When it comes to options for exploring the continent, planes and trains often top the list, but come with multiple pain points (who wants to queue in an airport), whereas a cruise around Europe can be a great way to see

everything you want to easily. That said, when it comes to cruising in Europe, it’s important to be discerning about the cruise line you choose to sail with. Operators, like Celebrity Cruises, who offer port-intensive itineraries are perfect, allowing you more time to explore the destinations you want to see. For travellers wanting to experience the quintessential trio of European summer destinations

– Italy, France and Spain – Celebrity Cruises’ seven-night itinerary from Rome to Barcelona certainly hits the spot, immersing you in the destinations both on board the ship and ashore. Travellers will get the chance to see Portofino, Florence, Ajaccio, Cannes, and Palma, and as with all European cruises with Celebrity, excursions play a big part in the itinerary. While the ship visits the paradise

of Mallorca, guests can throw themselves into the culture of the island and accompany one of the ship’s chefs as they journey into the heart of Palma, visiting the famous Mercat de l’Olivar, followed by a stroll to Es Rebost Restaurante to savour local sausages and cheeses. After sampling all the delicious produce ashore, guests will then meet back on the ship for a tour of the galley, followed by

an intimate chef-hosted dinner featuring some of the flavours and ingredients they already spotted and sampled in Palma. If island-hopping in Greece has been what you’ve been dreaming of during the cold months of lockdown over the past two years, Celebrity Cruises’s 10-night Greek Islands and Malta cruise might just be what you’ve been waiting for. Valletta, Santorini and Mykonos are all highlights, as are the calls

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EUROPE into Olympia where you can explore the home of the original Olympic Games, Rhodes and Athens. In Santorini, make sure you embark on the Sailing at the Caldera excursion, which takes you to discover the island’s hidden marvels and stunning scenery onboard a unique catamaran. Soak up the sun as you take in the caldera or Volcano Island and as you venture to the private bay of Saint Nikolas, fill up on delicious BBQ pork, chicken or souvlaki and wander the streets of the island’s capital, Fira. And don’t worry about the ship leaving without you. In fact, Celebrity Cruises allows you to maximise your time in port, with the ship staying late in Mykonos, Santorini and Valletta, allowing guests to experience more of these incredible destinations.

EUROPE If cooler climes are what you’re looking for on your European sojourn, cruising Norway’s coast is a perfect way to take in the incredible scenery this area has to offer, as well as visiting charming and varied ports including Molde, Alesund, Haugesund, and Stavanger. The cruise sets sail from and finishes in Amsterdam and Celebrity Cruises offers predeparture shore tours including the Accessible Amsterdam and Van Gogh trip which takes travellers through Dam Square, the De Wallen, Nieuwmarkt, and the spectacular Van Gogh Museum.

WHY CELEBRITY? APART from the extra time Celebrity Cruises offers in port, with its destination-immersive itineraries,

next year Celebrity Cruises will be sailing its three Edge class ships in Europe, including the two newest builds, the recently debuted Celebrity Apex, and the upcoming Celebrity Beyond, as well as the class’s eponymous ship, Celebrity Edge. These three vessels are the newest to join the Celebrity fleet, and have been uniquely designed to blur the lines between guests, the sea and the world beyond, with spaces that bring the outside in, and expanded open-air venues. On board Celebrity Beyond, the popular Rooftop Garden has been redesigned to offer more spaces for guests, while the Sunset Bar is now two storeys. The Edge class ships all feature the revolutionary Magic Carpet, the world’s first cantilevered floating platform 13 storeys above

the sea, which offers guests breathtaking views, as well as a full bar and space for live music performances. On board Celebrity Apex, there is a huge variety of accommodation, with the ship offering the widest range of staterooms in the Celebrity fleet. Apex’s Infinite Verandas on its Edge Staterooms allow guests to bring the outside in with a touch of a button. Or why not relax in the incredible venue, Eden, as you sail between European destinations. Eden has more outward-facing glass than any other dining venue at sea, and travellers can indulge at the café, restaurant, or bar with three levels of cosy nooks, lounge seating, and lively entertainment as well. All in all, the Edge class ships allow you the perfect way to experience Europe, bringing the outside in when you’re on board, and allowing you more time to explore the unique destinations the cruise visits.

Top: Experience the two-storey Sunset Bar on board Celebrity Beyond. Bottom: Celebrity Cruises’ Edge class ships are designed for travellers to forge close connections between themselves, the sea and the destinations they visit. All images ©Celebrity Cruises.

To find out more about Celebrity Cruises’ 2022 European sailings CLICK HERE.

Left: The beautiful port of Alesund is a highlight on the Norwegian Fjords itinerary. Top: The Infinite Veranda allows guests to bring the outside in at the touch of a button ©Celebrity Cruises Bottom: Spend more time in ports like Santorini with Celebrity ©Celebrity Cruises

travelBulletin JULY 2021

Well

IT BEGINS WHEN YOUR CLIENTS STEP ON BOARD

A WELLNESS JOURNEY, BEYOND .

Our new Celebrity BeyondSM expands our focus on wellness, with Destination Treatments, Women in Wellness, first-at-sea fitness programmes—everything to nourish minds, bodies, and spirits. Plus, AquaClass® Sky Suites provide every luxury of The Retreat®. LEARN MORE AT THECELEBRITYCOMMITMENT.COM.AU OR CALL 1-800-754-500.

Health and safety protocols, guest conduct rules, and regional travel restrictions vary by ship and destination, and are subject to change without notice. Due to evolving health protocols, imagery and messaging may not accurately reflect onboard and destination experiences, offerings, features, or itineraries. These may not be available during your voyage, may vary by ship and destination, and may be subject to change without notice. travelBulletin JULY 2021

Did you know?

LAST WORD

SUDOKU

Easy

The aim of Sudoku is to complete the entire grid using the numbers 1-9. Each number can only be used once in each row, column, 3×3 box.

www.sudokuoftheday.com – visit them and get a new Sudoku every day!

We’ve trawled through the Travel Daily Window Seat archives to give you a blast from the past. Here’s a gem from 20 August 2014:

Travel & Cruise Weekly produces a weekly consumer magazine called Keep Dreaming, full of destination articles, cruise stories and more to inspire.

NOT many roles exist where if you fall asleep on the job, you are doing your duties well. However, the official bed tester at Dubai’s Burj Al Arab has that exact responsibility. Part of housekeeping manager Robert Uy’s role is to ensure every bed in the hotel is up to scratch prior to being installed. Uy makes sure the bed meets a strict list of criteria including being soft on the head, medium on the body and firm at the legs. He also oversees special bed making requests such as for a guest who wanted his sheets ironed on the bed, not before.

Even better, it’s specially designed for agents to send their clients - giving you a reason to reach out to your database who are ready to travel.

WHERE IN THE WORLD

Funnies Flashback

THIS stadium is one of the highest in the world, located at 3,600m above sea level. The air is so thin that even spectators can find it difficult to cheer their team on if not acclimatised to the altitude, and players have been known to be sick on the pitch because of the stadium’s height. It is the country’s largest sports complex and is the home ground for three of the nation’s major league football clubs. Do you know where this stadium can be found?

Click here for a toolkit to help you share it with clients

Answer: Hernando Siles Stadium, La Paz, Bolivia 26

travelBulletin JULY 2021

CALLING ALL SUPPLIERS AND TOURISM BOARDS

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