Hotel booking agents
“ Nowadays almost everyone has made a hotel booking online and
found it pretty easy. Any HBA or TMC looking to make money out of an automated process will fi nd their days are numbered
” ➔ He believes that corporates should focus
on engaging a hotel specialist with the broadest choice of hotel content, quality and price. “There’s nothing to stop a multinational insisting on having HRS content in the online booking tool and available to the TMC,” West says. His opinion is shared by Simon McLean of
Click Travel. “It simply doesn't make sense to split out hotels into separate contracts anymore. Any perceived or real advantages have been eroded by the TMC community. Companies are inviting HBAs and TMCs to pitch for their business so they must perceive that TMCs have the capability to deliver,” he argues. So how can traditional HBAs protect their positions? When it comes to separating the men from the boys, Parnham believes that buying power is a big advantage. “With buying power comes better rate parity, better terms and conditions and better security for customers. But smaller, boutique agents still have a part to play, especially where corporates have a niche or personal requirements that they understand and can meet,” he says.
Business models The BSI/Expotel merger has also re-ignited the debate surrounding the so-called ‘free service’ promoted by HBAs and its alleged lack of transparency. Opinions amongst corporates and agencies alike are remarkably aligned on two points. Firstly, that any corporate who actually believes the service to be ‘free’ is deluded, and secondly that the current choices of business model are fit for purpose. “Buyers are well aware that HBAs don’t
provide a free service,” says Inntel's O'Neill. “Those agents who are open about how and what they earn will thrive, but bigger agents risk falling backwards into non- transparency when sales and marketing agreements lead to agents prioritising certain chains in their client proposals.” The HBAA's Parnham says, “Cost trans-
parency is one of the HBA’s strongest propositions. Travel management companies have a myriad of charging mechanisms to compare pricing and do this quite deliberately because they are fulfilling demand for a commodity at the best price.” Many agents share their commission earnings with clients and, as another buyer points out, offering a free service doesn’t mean all of that agent’s clients adopt that model. “We know there are commissions and that they are being collected,” she says. “We know there’s no such thing as a free service and counter the issue of biased choices with our preferred programmes.” Pat O'Brien, an industry veteran of over
30 years and owner of Prestige Hotel Reservations puts it another way. “Today’s corporate customer expects not to have
to pay. And if there is a charge, then that needs to be as low as possible.” HRS’ Jon West takes the argument one
stage further. “In the leisure market, if you want to book a hotel you would not use a website that charged a fee. Nowadays almost everyone has made a hotel booking online and found it pretty easy. Any HBA or TMC looking to make money out of an automated process will find their days are numbered. However if the booking is being delivered via call centre, that is a value add in itself and there should be a fee.” Moving from commission to fee-based pricing models has been a slow process, and yet another which demonstrates the great industry truism that one size doesn’t fit all. Commission and transparency are clearly aligned because corporates working on management fees where commission fees are rebated insist that these are robustly audited. Issues still remain, however, as Simon
Thompson of ConferencesGroup points out. “There are still a large number of companies who are happy to work with an agency offering a free service. Although we pride ourselves on providing unbiased choices it pains me to see large agencies force feeding clients venues in which they generate a higher commission or marketing fund rather than the unique or quirky venues that might be more suited to the client’s requirements.” Pat O'Brien echoes Thompson’s sentiments.
“Looking after the client’s requirements comes first, every time,” she says. “Today’s corporate client also knows more about the choice of hotels available to him or her, and knows where he or she wants to stay. So as an agent we have to deliver a service of the highest calibre.” O'Brien continues, “It’s the agent’s job to
meet that need and not to try and persuade the traveller to stay at another hotel a few miles down the road that might offer the agent more commission. I do not allow switch-selling in my business, regardless of the commission involved.”
More to come? TMCs have been trying to get into HBA territory for a long time and some may see the BSI/Expotel merger as an easy route into this market. Trevor Elswood refuses to second guess how TMCs (or HBAs) will respond, but says there are barriers to others wanting to follow in his footsteps. “The problem with growing organically is achieving the necessary scale to deliver the level of investment in technology and buying power to meet customers’ expectations. BSI and Expotel were also the leading brands in the market. Any new consolidation would not enjoy the same recognition.” Simon McLean of Click Travel doesn’t buy the specialist-within-a-generalist concept.
30 THE BUSINESS TRAVEL MAGAZINE
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