Australian Travel Agent Barometer 2014 Survey Highlights

Australian Travel Agent Barometer 2014
Simon Bernardi Consulting
October 2014
www.australiantravelagentbarometer.com
www.australiantravelagentbarometer.com.au 1

Contents
Highlights – p4 - 5
Key competitive threats – p6
About the survey - p8 – 10
AFTA / ATAS – p12 – 15
Confidence levels – p16 -17
Buying groups – p19 – 22
Online – p24 - 28
Consultants, appeal of home based model,
remuneration structures – p30 – 32
Most important suppliers – p33
Investing in technology – p35 - 36
Easiest cruise lines to do business with – p37- 38

Highlights of the survey and key competitive
threats

Highlights of the survey
Strong Optimism
There is a strong feeling of optimism in the industry and whilst this was the case last year, many
agents this year have developed plans for selling through new channels such as online.
82% of owner managers said they will be operating their business in 5 years time
Endorsement of AFTA and support of ATAS implementation
There is support for the role AFTA is playing on behalf of the industry and support for the new ATAS
system where training is being implemented by agents and this is acknowledged at consultant level.
Many believe suppliers should not deal with non accredited agents and that insolvency insurance
should be included as part of ATAS
Move away from traditional wholesalers
There appears to be a shift away from traditional wholesalers as agents access new suppliers to
ensure competitiveness and ease of booking. The type of suppliers benefiting from this include GTA ,
Travel Cube, Expedia TAAP, Orbitz, Excite, and Ready Rooms.
Nearly 80% of consultants have used an OTA to make bookings
Many agents are also using DMC’s (Destination Management Companies) to make bookings outbound
Agents investing in technology
Agents are intending to invest in technology in the next 12 months
Many are developing online capabilities
Most have decided which buying group to belong to
80% of owner managers said they will remain in the buying group they are in and are not intending
moving

Highlights of the survey
The overwhelming majority of owner managers are optimistic about the outlook of the
Australian retail travel industry
80% of Agents either had a online business strategy or were developing one.This is a
turnaround on last years Barometer results where only a minority of agents had or were
developing a plan
84% of agents were not considering changing buying groups
75% of respondents agree AFTA is doing a good job in its advocacy of the industry
68% of respondents have implemented the ATAS accreditation scheme in their business
48% of respondents said that suppliers should not deal with unaccredited agents vs.
32% who said they should
35% of respondents said they were covered by their buying group for insurances
36% of agents said they do not intend to take out further insurances i.e. airline failure,
end supplier insurance
Qantas and Qantas Holidays continue to be the most important suppliers for many
agents

Key Competitive threats
Online competition is the major concern of agents today linked with the perceived
strength of Flight Centre Group
Many agents also expressed concern about new untrained agencies entering the market
and undercutting pricing as well as giving agents a poor reputation, especially agents
that were not members of AFTA or ATAS
Lack of trained staff was mentioned by some agents but not as big an issue as in past
surveys
Commission reductions by suppliers was also a major concern by most agents
Most travel agency owners and managers agreed that the key competitive threats to
their business were
1. The internet and online competition
2. The Flight Centre Group is seen as a major competitor to most agents
3. Suppliers offering customers direct better deals than they can get through a travel agent

About the survey

About the survey
The survey was conducted in October 2014
The Australian Travel Agent Barometer is independently operated by Simon Bernardi
Consulting www.simonbernardiconsulting.com
Just under 300 participants took part in the survey. All participants were either Australian
travel agency owner managers or were consultants
All major buying groups and most states were represented
Owner Managers Consultants

Owner Manager Demographics
35% were male and 65% female
80% of the respondents were city based
63% were between 46 and 65 years
90% are AFTA members and 69% were ATAS accredited
30% have turnovers annually over between $5 million to $10million +
55% of agents were leisure based
34% were Helloworld agents

Consultant Demographics
19% male and 81% female
89% were city based
60% were leisure consultants
Over 70% had been in the industry for in excess of seven years and 46% had been
consultants for over 15 years
37% were between 36 – 45 years of age and 32% were between 46 and 65 years of age

AFTA & ATAS and industry optimism

AFTA doing a good job and over 70% have implemented ATAS into
their business
The majority of all agents (67%) agreed that AFTA was doing a good job as an advocate
for the industry and 74% of AFTA members surveyed
46% of agents thought that insolvency insurance should be part of the ATAS
scheme,16% were unsure and 38% said it should not be part of the scheme
48% of agents surveyed said that suppliers should not support agents that were not part
of the ATAS scheme and 21% were unsure
77% of agents have implemented the ATAS requirements in their business
Most agents are not taking out additional insurances as they say they are covered by
their buying group

ATAS members
65% of ATAS members surveyed thought that suppliers should not support unaccredited
agents
35% will not take out insolvency insurance as its covered by their buying group

Some training still required at consultant level to fully implement ATAS
There is still some training required to ensure ATAS is being fully implemented to
consultant level with 15% of ATAS accredited agents consultants saying they have not
been advised of the requirements and 27% unsure

Consultants view
62% of consultants worked in an ATAS accredited agency and 32% of
consultants were not sure if their agency was accredited
Of all consultants surveyed 35% had been advised of the ATAS code of
conduct

There is a great deal of optimism and confidence amongst agents
Over 90% of travel agency owner managers rated the confidence level in the industry as
either Ok, good or excellent
84% of respondents believed they would be operating their business in five years time
Some of the reasons are given below (A sample of actual respondents quotes)
In the end and perhaps for the next five years, smarter agents will still be here with creativity and most of all
by offering service. The other reason for the optimism is to have a broad range of products to sell, not just
air travel. Smarter agents should consider Events, Conferences, Incentives, Inbound Travel (Leisure and
Incentives). This will allow agent to survive should any one of the product mix suffers temporary downturn
ATAS is elevating industry standards and providing a fresh opportunity for the future
lots of great experienced agents out there consumers need to be educated on importance of an agent or
wholesaler
Buoyant market conditions in mid to high end leisure and other niche activities
There are a lot of initiatives out there to get people travelling, and when people do travel they realise how
great it is, and people will continue to travel again and again and discover the world.
There is a lot of new technology on its way which will give us an edge. so much new product and easy
access to booking it - especially cruising. With the world political situation, using a TMC is an additional
level of security for travellers.
I feel there is a quiet confidence about the service we provide is always going to be required in this busy
age, however you can't help to be cautious given the purchasing trend online
Confident, professional operators create confidence for their clients. We must believe in ourselves.

There is a great deal of optimism and confidence amongst agents
(continued)
Whilst most were positive there were still some areas of concern and caution, as shown
below with some actual respondents answers.
Too many online providers, online sites and operators taking away from the job of a agent, airlines
taking commission away form agents but reduced commissions and online bookings direct to
customers
Difficulty in recruiting staff, high salary expectations from inexperienced consultants, international
fares are more complicated than ever (due to private fares)
I feel that agents are being pushed out by airlines and hotels by trying to gain clients direct. I can
compete with the online market because we offer personal service but how do you compete with a
huge marketing machine like Qantas or any other airline with a huge database and they are
targeting directly. I also feel that AFTA don't support agents but are more interested in supporting
the airlines and themselves.
Public have perception that agents are more expensive than going direct. Many Australian's are
taking a "do it yourself" approach and booking with online overseas agents. No incentive for them
to support local businesses.

Buying group issues

Owners feel buying groups are not delivering on lead generation or
getting their members online
Agents valued overrides, training, support and marketing from their buying group
Agents surveyed said their group did not support them with getting their business online
or generating sales leads to the extent they would like
Agents were supported by their groups in margin and commissions, education and
training and support services

Most agency owners say they are happy in the buying group they are in
now
90% of agents surveyed said they were not considering changing buying group
20% of agents surveyed had changed buying groups in the last 12 months
Agents that did change (from a small sample) indicated the main reason for change was
lack or transparency and that remuneration levels were better in a new group
85% of owner managers said they were not considering changing from their existing
groups

What travel agents most value from their buying group
Agents valued their buying group membership to give them;
Access to overrides and contact with major suppliers
Recognition through a strong brand supported by marketing
Access to other agents with a similar mindset
Assistance with insolvency insurance
Support advertising and communication from suppliers
Help desk offering
A future strategy
The major support given to agents by buying groups are the overrides and commission
incentives and marketing
There was some frustration expressed as few received support to become online
enabled

How buying groups influence their members to sell preferred products
Most agents will sell their preferred products as a first option
Agents support preferred relationships and these relationships are the main
reason they join a buying group
Agents are critical of members of their group not supporting preferred as it has
an impact on all in the group

Agents competing online

Online competition and participation dominate as biggest industry issue
Most agents believe they are competitive with the web and most are developing a web
strategy
30% of agents now have their own transactional site with their individual branding
As most agents believe that their buying group doesn't assist them in getting their
business online. Many agents are independently of their buying group developing their
online strategy
Most agency owners and consultants feel that they are competitive with the web
Owner Managers Consultants

Traditional wholesale models are becoming less relevant
The traditional wholesale model is less relevant as agents and customers require more
dynamic pricing and online platforms can provide direct connectivity to suppliers
Agents said that traditional wholesalers were sometimes competitive with online
suppliers and 15% said they were not.These attitudes are reflected in the growth of the
number of agents using OTA’s where previously they used wholesalers
Most agents have used OTA’s to make client bookings
Consultant views of wholesaler competitiveness

Retail agents are using new channels to remain price competitive
More channels than ever before exist for agents to remain competitive with online
pricing.
Other than the options shown below agents said that;
If unable to find a competitive price on an on-line product they will book it and charge a service fee,
tell the customer to book it themselves online
Some agents said they would match the price and add commission to another part of the booking
to cover the earnings shortfall
Speak to the supplier for a price match
Often consumers obtain a cheaper rate online which is NOT what they originally requested and we
try to make them understand that and more than often if we use dates/times of services offered to
consumer at a cheaper rate, we find we are just as competitive
Owner managers Consultants

Expedia TAAP program as well as Travel Cube are the most popular
among the online operators that travel agents are using.
Agency Owner Managers

Expedia TAAP program as well as Travel Cube are the most popular
among the online operators that travel agents are using.
Travel Consultants

Consultant training, remuneration models,
appeal of working from home and most
important suppliers

A significant number of consultants are considering becoming home
based
50% of consultants surveyed were either unsure or were considering becoming home
based in the next 5 years
The main driver for consultants wanting to work from home was flexibility of hours.

Consultants remuneration models have changed and employers are
becoming more flexible
In addition to the categories below a number of consultants worked for a
commission share or commission split

Consultants continue to value educational and product training the most
Over 75% of consultants surveyed rated their training as good or excellent
On an annual basis 65% had participated in a supplier educational’s, 45%
had been provided sales training and 82% had participated in product
training from suppliers
The most valued training courses for consultants is shown below;

Who are the most important suppliers to consultants
The following were the most important suppliers due to the large number of transactions
performed on each due to the product offering.
Commission and override
Overall relationship
Customer preference
1. Qantas Airways
2. Qantas Holidays
3. Travel Corporation
4. Singapore Airlines
5. Emirates Airlines

Owners considering investing in technology,
best cruise lines to deal with
www.australiantravelagentbarometer.co
m.au 34

Nearly 50% of owner managers are considering investment in
technology for their business in the next 12 months
(Actual Agent Responses)
A practical, down to earth, stable and easy to use system..... remember what GDS
stands for? When it was invented, it was one set of entries for every airline, not 100
different systems for 100 different suppliers .
I have seen the forthcoming Amadeus platform due to be released mid 2015, which is
very exciting and I am very much looking forward to this, as it will help speed up
numerous processes
Mobile apps
Ways to increase productivity; Easy access to multiple channels.
One screen shop - it appears that consultants have to work harder for the same dollar.
would be fantastic to compare all operators and providers in one area
more integration with online booking engines, CRS etc. So many sites to sign in /out to
compare pricing - time consuming.

Nearly 50% of owner managers are considering investment in
technology for their business in the next 12 months (Contd..)
(Actual agent responses)
Better accounting options for smaller business
Easy on line booking and quoting systems, short video links. Tourist and destination
video links
The ability to have an interactive site that promotes our business module.
Far better accounting package to control client management
Assistance with converting our existing platforms to be compatible with the changing
modes required by the changing technologies
Better back office integration and better reporting.
Better client facing reporting, Consultant reporting on preferred suppliers being utilised
per Consultant basis

Consultants rate Princess Cruises the easiest to do business with and
Silverseas provide the best overall commission

Owner managers rate Silver Seas as the easiest to do business with
slightly ahead of Princess Cruises and Royal Caribbean

Australian Travel Agent Barometer 2014
For further information contact
Simon Bernardi;
Mobile: (+61) 418111484
simonbernardi@theaustraliantravelagentbarometer.com
To have a product specific or destination study developed for your organisation
or to partner or co sponsor a Barometer study please contact the author
directly at the above contacts.

Australian Travel Agent Barometer 2014 Survey Highlights

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