Disintermediation – if you can even pronounce the word – means ‘cutting out the middle man’ and, according to Tourvest Destination Management CEO, Martin Wiest, it’s “A key concern for the global travel and tourism industry.
“Increasingly, suppliers are opting to market to overseas tour operators and consumers directly, and Tourvest Destination Management (TDM) has responded by adapting its strategies to ensure it remains relevant in this new age.”
During this year’s Indaba, I asked him about it.
“Historically the travel channel went from consumer to overseas retail travel agent to overseas wholesaler to inbound wholesaler to product – so the value chain had four components and the distribution channel,” he said.
“Logically, then, the consumer has the perception that if he cuts out anything in the middle he’ll get a price advantage.
“In reality that’s really not the case because larger businesses like ourselves have enough buying power through the consolidation of many booking channels in many countries of the world that allows us – even in an environment where the consumer seeks to go directly to the product – to remain competitive.”
So where does that leave the internet?
“I’m sure for a lot of stay put destinations – which for me are largely beach holidays – and for primitive product – flights and car hire – the internet forms a material threat.
“I think in a round trip destination like South Africa or Namibia, though, the internet currently still doesn’t have the solution in terms of creating trips and managing them. The term is ‘research on line / book off line/ (ROBO), and I think that’s here to stay for a very long time.
“In our case, less than 2% of our turnover is generated through the internet, even though we’ve got our own portal – journeys2africa.com.
“What the internet does do is create rates transparency, which then causes us problems in our normal distribution channels. The customer has a price value proposition as a result of domestic specials advertised on suppliers’ web sites or specials advertised with very different terms and conditions than those that apply to us, but that becomes his price value proposition, and that’s what we have to battle with.”
And how is TDM handling this?
“Well, we’ve got two people who do nothing else but watch the internet and bed-banks such as hotelbeds.com to see what price developments are doing in that environment, so that we can react through our central booking environment; (b) we’re obviously steering as much turnover as possible into as few partners as possible so that we have enough power to look after ourselves in terms of volume discounts; and (c) we are developing our own technology to be able to play in that space once the market switches.
“I think that currently we have a resurgence of traditional booking channels as a result of many of the global catastrophes that happened over the last year.”
But there is a strong argument against booking via the web.
“Last year, when they had the ash cloud and most of the European flights were grounded, nobody looked after the people who booked through the internet: they were stranded, and had to sort themselves out – and they didn’t have the knowledge of how to do so.
“People who booked with tour operators were looked after, rebooked, alternatives made, etc.
“People remember that.
“If you’re on the internet you’re on your own – no consumer protection mechanism looks after you, and you’re booking under the legal framework of a different country.
“When an overseas customer books with a South African entity via the internet, which law applies? Cyberspace? The product’s own laws? Consumer protection laws don’t apply, so there are many flaws for the consumer.
“In the end, the price advantage is outweighed by those disadvantages.”
HEADS UP 1.0
Stormsriver Adventures has been nominated for an award for the the Best Recognised and Acclaimed Proudly SA member company.
The Proudly South African Homegrown awards are held to recognise companies for their contribution to job creation and the growth of the South African economy.
Winners will be determined by public voting only – so please vote for Stormsriver Adventures on www.proudlysa.co.za/homegrown or www.facebook.com/proudlysa
Voters can win daily prizes and voting runs until August 16.
You should also like Stormsriver Adventures on Facebook: www.facebook.com/tsitsikammacanopytours
HEADS UP 2.0
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