The current economic climate of South Africa is driving pressure on travel policy and corporates are essentially spending less each year as they find measures to control their costs, with travel being a massive focus. Travel management companies are having to get creative to keep and attract clients. Claude Vankeirsbilck, Chief Sales & Marketing Officer at Tourvest Travel Services, sheds some light on the industry and its challenges.
Q: What’s your view on the state of the SA travel management industry?
A: When reviewing the current state of the travel management industry one has to segment the market into corporate – corporate business travel – and public sectors – all government entities, including local, provincial, national and state-owned enterprises (SOE’s). In the corporate segment we are seeing a very depressed market environment that has been under pressure for a number of years. Tourvest has identified a massive opportunity as a TMC where we have developed a market-leading online travel management solution to assist the corporates in meeting this massive need to control and manage this expenditure. We have seen massive savings results with most of our corporates who have implemented the travel management solution – over 20% savings in most cases. When it comes to the public sector we have seen a more moderate decline in expenditure over the past couple of years, although in the past couple of months we have experienced significant pressure in cost containment measures here and believe that our online solution will assist the public sector in containing its travel expenditure. We have demonstrated our capability to assist the public sector effectively manage and better control its travel management costs. Taking the two segments into account, the travel management industry is under massive pressure and only those who have invested in technology solutions will survive under these pressures.
Q: What do you believe are the most pressing issues?
A: The most pressing issue at the moment is the sustainability and viability of South African Airways as a key national supplier to all TMCs and customers alike. We desperately need a fully-functional and viable national carrier. Exchange rate fluctuation pressures on our economy and the level of the oil price always have a big impact on the various industry sectors which ultimately impacts most travel programmes. Our lack of skilled, experienced and qualified travel consultants is an ever-increasing concern to our industry.
Q: How has the role of the TMC changed in the past 10-15 years?
A: The TMC business model has had to change from a pure transactional focus to that of offering a value-based travel management solution with technology being the driving force of the solutions offered.
Q: Having developed your TravelIt offering, what’s the next step to ensure Tourvest stays abreast of technological change in the TMC space?
A: Tourvest Travel Services Online Travel Management solution – TravelIT – is an ever-evolving end-to-end online technology solution. Much work has been done in developing a market-leading travel technology solution but that’s not where it ends. We are focusing much of our efforts on further enhancing our content as we believe that content is king when it comes to developing travel technology solutions. We have also invested in further developing our travel expense solution of the technology, where clients have shown massive interest in this capability. Added to this we are very near to launching our mobile application to support this market leading travel management technology solution.
Q: Are you under pressure from clients to justify your fees, and if so, how are you responding?
A: Penny wise and pound foolish can never be truer than when it comes to running an effective travel programme. We strive to deliver the most cost-effective, value for money, end-to-end travel solutions backed up by world class online and offline support. Whilst fees may start off being a discussion driver, our clients very soon appreciate the value we deliver to enable us to meet their travel management objectives.
Q: How have the demands and needs of business travellers changed in the last 10-15 years?
A: Business travellers ultimately want everything they need in the most accessible and quickest time. And it is only with technology development that we have been able to satisfy this need. The ability to offer everything through a mobile device is where this industry is moving and those TMCs that have the investment capability to provide technology solutions that meet this need will survive in the future.
Q: Are there any international trends in the TMC space that you feel are worth noting?
A: Technology is certainly driving the value proposition at a global level. There is, however, a growing need to support technology with value-based personalised service as well.