Loads of talk from well qualified suppliers, including Robert More and the inimitable Martin Wiest at TDM about rates and their place within our industry.
I would, however, seek to bring discussion, focus if you will, to the reality of ‘overpriced’ Southern African product and properties that believe that we as professional, determined and hugely experienced and knowledgeable proponents of exceptional itinerary flows should be saddled with lower margins.
So the days of 40% commission from rack are gone? Why? What added-value aspect have you (the property) slotted into the moment of clients’ experience that takes our STO rates down to 20% or 30%? What added-value experience is our client to receive from you that is to cost us our margin? Is it that you as a property are unable to manage your scope of exposure to the divergent market inputs (trade, last minute, corporate, direct, OTAs, OTWs, plus alternative disrupters and all who attempt to swim in our pool) and would go for the simple solution of reducing our incomes to allow you the financial latitude to accommodate the alternatives?
It may well be the appropriate moment for the professional (and I emphasise professional here) wholesale tour operators (WTO) to move from sourcing our entire income from the properties we use/recommend/select for our inbound clients to a regime where appropriate costs are shared?
You, the supplier, appear to want to minimise your cost structure to our profession to allow an income flow to cater for the reality of the divergent marketing/sales energies we are all experiencing. So, how would we (WTOs) feel in spreading the income load between supplier and traveller? Twenty percent (and maybe lower in certain circumstances) from the selected property and 6.3% from the traveller.
Inbound WTOs have never walked the path of charging the traveller/agent for our utterly unique, solid and client-focused services for fear of ‘losing’ business. Right? Dead right, but I would hazard a well-based guess that this form of decision comes from fear of loss rather than an indefatigable belief in self…
Cut my margins, dear suppliers, and I may lose interest in your property or destination, as a collective of many hundreds of threads across the globe. This may not be what you as property owners and managers would wish to experience in a market where loyalty is doggone, where relationships are as deep as the margin and the hand of business is becoming a sleuth rather than a reality.
Time, I feel, to spread the cost structure to all who benefit from our position as sounding boards, a resonance, a guiding light of each client’s needs, wishes wants and travel dreams (NWWD ) into Southern Africa? Who would care to chat through this concept?