I received a message from an ex colleague asking me” what are your views of the world of travel, tourism, airlines & hospitality post covid 19? Do you think it will be business as usual once we press the reset button? And my response was “I hope it is not business as usual” Surely we cannot afford not to take lessons from the ongoing crisis and blue sky about business as usual. If we do so, it will be a loss of a huge opportunity.
One good thing about a crisis is that it brings people together, leads to creation for a common cause. I believe the sheer magnitude of Covid 19 will divide modern world history between two time zones BC & AC. The beauty is BC is "Beyond Control" and AC is what we will " All Create". From my point of view we have a huge opportunity to make a better world in every sense.
Speaking of travel, We all recently saw adverts from a couple of Indian airlines offering super saver fares for future travel. These drew a lot of flak including from myself as I let off some steam on twitter because it was/is a suicidal move that can encapsulate the concerned airline and its peers.
Cartelization is a bad word but its high time a regulator is appointed by the Ministry of Civil Aviation in India to monitor commercial activity of airlines and lay down some basic operating standards after all air transport is an essential service so passenger and distributor rights must be protected. We don’t need predatory pricing by over eager salesmen and saleswomen at this time of a colossal global health emergency. We need a mature approach.
This is not the time for Indian aviation enthusiasts to draw parallels with China and US etc. fleet size and passenger volumes vis a vis population. Capacity should match demand…we can no longer afford chest thumping senior executives speaking about pumping capacity on routes with marginal demand increase simply to drive competition out of market and thereby placing mega aircraft orders. These are overly aggressive moves which should have no place in near future. Fleet expansion plans must be approved basis a viable business plan. Fares must be offered at price points which cover cost of operation and perhaps certain routes need to be allotted to specific airlines so there is semblance of sustainability for all. We need a measured response at least in the near term until we turn the corner as an economy and as a country.This may sound protectionist but so be it.
And the Indian carrier in my view which understands this better than any other is IndiGo – Super professional management with huge aviation experience. So lead IndiGo.
TCS must be deferred indefinitely.
GST on air tickets must be reduced to a flat fee of maximum of 2-3 % and input credit must be disallowed. GST reconciliation is a monstrous task to administer and implement for the travel agencies and the Airlines and it involves substantial avoidable cost. Such a move will also reduce the cost of air travel and improve overall efficiency of travel agencies. More importantly it’s on record that the government has no way to determine whether purpose of travel is business or pleasure or if even necessary. It is also confirmed that the government does not have any access to relevant data nor does it store such data of millions of transactions each year so best to do away with input credits and lower the cost of air travel for the general public.
Once the world recovers , sooner rather than later, Inbound tourism to India is set to get a big uptick because the Indian way of life is being appreciated and the better than average results in fighting covid should generate a huge interest in India from the affluent travellers in the next winter. Ministry of Tourism needs to prepare for a strong marketing campaign as soon as possible for Q3 and if India can improve hygiene standards in public, India will see exponential growth in foreign tourists towards the later part of the year and for years to come. Even the average Indian holiday maker or MICE movements may be inclined more towards Indian venues.
With regards to distributors, in my humble opinion, the immediate steps the distributors need to take are as follows:
Establish a portal to post any defaults by customers – be it agent or corporate or individual passengers? No Ticketing Agent, Tour Operator or Non Ticketing Agent should deal with defaulting customers. This will ensure fair play and very quickly customers will begin to comply with payment deadlines. If airlines can ban passengers for misconduct & IATA can declare defaults , why can’t the agents and operators do it? The trade associations need to define default criteria and implement it immediately as administrators.
TIDS numbers must be made mandatory to access content for all Non Ticketing Agents. I believe this will weed out the fringe players who are not professionally qualified travel counsellors.
TAs should accept back end incentive targets from airlines on nett ticketed volumes – not on flown revenue and payable quarterly on a pro rata basis. Flight cancellations by airlines for whatsoever reasons must be discounted for calculating target achievement. This must be non negotiable
Do ask for hotel & car bookings each time you book a ticket but do not buy prepaid hotel rates. Book on GDS at commisionable rates. Give customer card as a guarantee and let customer’s pay@hotel. Like Airlines, Hotels & Car Rental companies including aggregrators can also load private rates on GDS for you. In the long run and for risk mitigation, commissions are far better than mark ups and global TMCs normally follow this policy for good reasons.
Focus on smart contracting with suppliers. Contracting has to be by far the most crucial function especially now.
GDS companies need to keep a sharp focus on Non Air bookings and facilitate growth of this segment with more local content and subscriber awareness programs. Non Air bookings on GDS can be a very effective source of ancillary revenue for the travel agent
I have no doubt that the industry will survive with resilience and If the leadership in the Indian industry unites to tackle the new reality with patience and teamwork, mountains can move.
As data points emerge in the coming weeks & months, we will take stock and hopefully see the silver linings.
Until then God Speed
Seema Luthra - Aspiring for The Travel Agent