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Independent business travel agents have plenty to gain from British Airways’new payment system – as long as they keep their costs under control

Norman gage

It would be easy to harp on about the whys and wherefores of Project D – otherwise known as the ‘British Airways Fresh Approach to Travel Agency Remuneration’ – which came into effect yesterday.

For those of us who believe in the butterfly theory of chaos, ‘The Fresh Approach’ could represent the emergence of the butterfly.

However, we at Advantage Travel Centres have already moved on into the next phase and are helping members to engineer the way they communicate and deal with their clients. And if they get it right, I believe that independent agents have a lot to gain. But it needs stressing, they need to get it right.

One thing that we are particularly interested in is also looking into the cost of sale – or in other words, how much it costs an agent to sell a ticket.

We’ve got to get this right, because if the cost of sale is understated, agents may not be retaining the profit they deserve. If it is too high, the transaction fee they are charging may not be price attractive and they stand to lose business.

In all of this, independent travel agents who have got it right stand to benefit from the ‘churning’ of clients who are reluctant to accept the one and only offer from their multiple competitors.

Independent business travel agents’ strengths include offering real choice, designing a transaction fee programme that can be individual to their clients’ needs. Independents, by virtue of their size, can react to situations more quickly.

Looking into our Advantage crystal ball, we see a pathway leading to the next step. While it is cloudy, the spectre of doing away with commission altogether looms large.

But as my mentor, Carlson Wagonlit Travel executive vice-president operations and regions Richard Lovell always says: “Every challenge is an opportunity”.

To realise that opportunity, business travel agents will need to invest deeper in technology and work together more closely to achieve common objectives.

Investing in a good back-office or mid-office system will not only enhance the service levels on offer, but the buying power of a travel agent as well. It also results in great gains in staff productivity.

The need for technology cannot be underestimated because it will enable an agency to run smoothly and efficiently.

In the past we have tended to compile figures on the back of cigarette packet, but with BA’s ‘Fresh Approach,’ it requires a fresh approach from agents when it comes to technology. The path becomes even more unclear as we try to view the reaction by other segments of our profession.

Yes, I said profession – no longer barrow boys operating a trade, nor an industry manufacturing goods. The cascade effect into the car-rental business and the hotel sector still seems some way off.

What will our friends in the leisure sector make of it? At the Advantage Conference in Majorca, they clearly did not like the travel agent controlling the final price to the consumer in a very price-sensitive market.