ROUNDTABLE: The big Doha travel agent debate

In the first-ever Arabian Travel News roundtable debate to be held in Qatar, Monika Canty met up with three Doha-based travel consultants last month in a bid to shed some light on the burning issues facing the travel trade in Qatar

Qatar has been centre-stage since winning the World Cup bid, but what impact if any has this had on the travel trade? An eye-opening discussion reveals the real issues — from ADMs to the need for client education and agent insurance.

Qatar is primarily viewed as a business travel destination. What is the potential for leisure tourism in Qatar and what are the challenges associated with bringing leisure visitors to Qatar?
Darim: In terms of the opportunities Qatar has, they are huge. But in terms of what there is for a tourist to do here, the tourism sector is still in its infancy. If you look at someone flying in on Qatar Airways and doing a stopover — there are the usual desert safaris, there is a new water park which has opened, but there are still very few things to do here in terms of tourism and even the Qatar Tourism Authority has recognised that. It is still more of a business destination.

The government is now pushing ‘Destination Qatar’ through its 48-hours in Doha campaign, so it will develop. It’s a natural progression that it will grow especially given the number of expats living in Qatar currently, and that number is continually growing.

You’ve got some wonderful things here such as the Islamic Museum, and you’ve got some great hotels. And there are more hotels opening up this year. But in terms of getting access to things that tourists can do outside the obvious ones — there is not really a lot of information available.

And when it comes to the infrastructure such as the ground handling, and the facilities for tourists coming in, in terms of getting access to a local destination management company to say ‘I want to do a tour into the desert or a dhow boat cruise or some water sports’…these sort of things — it’s not really available.

Khurshid: These kind of activities are not easily arranged here. I would say that the leisure market needs to be developed much more. Compared to our neighbouring countries it’s still quite far behind in terms of what you can do.

Does the local travel trade need to be more proactive about developing the destination for the leisure market?
Khurshid: Everybody is ready to support the development of leisure tourism, but we never get many enquiries from leisure tourists because there is not really much to do. And people who have visited here are not 100% satisfied with it as a leisure destination.

We also have just a very short window to cater to the leisure market due to the climate conditions — the season starts in October and runs only until March when we can handle leisure guests.

Do you face any issues with visas in Qatar? Could the destination loosen up its restrictions in terms of visas in order to support tourism?
Khurshid: Yes for inbound visas we face a lot of problems. I think the airlines really need to support this more — especially Qatar Airways. Look at the way Emirates supports the issuing of visas in Dubai — that would really help encourage tourism here.

What are the biggest challenges you have faced as travel trade since the introduction of zero commission?
Khurshid: The airlines dictate certain terms so we have to work according to them. We work as a sandwich — in between the consumer and the airlines. At the end of the day we are squeezed with our profits.

Our commission is decreasing and our expenses are increasing so on both sides we are being squeezed. The only thing we can do being a service agent is to improve our services and try to generate more volume.

Is it a challenge to convince your clients of the value of your service fee?
Khurshid: Yes of course there are lots of challenges. Especially with this being a small market and there being so many agents here. It becomes a very price-driven market.

In the days when we used to have commission I would see travel agents then who were giving out all their commission and just working with the minimum. These days it doesn’t make much difference in the commission level but the market has become a lot more stretched.

Darim: It comes back to what is the client looking for in terms of service from the agent — does the agent just offer a ticketing service or does the agent offer added value as well?
That’s really where an agent could potentially make a lot of money, from the added value that they bring to a client. Whether it’s offering ancillary services, or booking hotels which still generates quite nice commissions. It’s also in terms of the reporting you can give your clients, reconciliation of credit card statements, offering different forms of credit cards statement.

So there is a lot of added value that we can bring to the table as a company if a client is looking for a travel management company rather then just a travel agent.

In your experience are companies here willing to pay for that ‘added value’ for a professional travel management company — or do agencies here still act as ‘ticket bookers’?
Darim: It depends on the client and how you are coming across to your clients. Some do and some don’t. It also depends on how you pitch yourself to your clients.

You’ve got companies here that just want tickets and then there are those companies that have the experience of working with a TMC on a global level who say, I want to work with this agency because they are affiliated to this brand and we want to feed off that.

Khurshid: It all depends on the clients and your relationship with them. I still feel that even if the clients know there is a service fee involved in the transaction; most customers are willing to pay the fee because they get that consultancy service. I try to act as a travel management company first and then as a travel agent.

We are no longer an order-taker — I think we are more a consultancy company. We need to bring to the table all the added value for the service fee they are willing to pay us.

What we see in the market now is that the global travel management companies are pitching up in Qatar and they are doing very well because they are able to bring great value to most of the big corporates as they have a global contract. It’s the same with most of the hotels —they are able to negotiate global contracts and can get good value for that.

What do corporates value more, service levels or price?
Khurshid: It goes hand in hand. I’m sure we all are sitting here from different travel management companies and we have our yield, and the level of service goes hand in hand.

Darim: It’s also about educating the client — there are a lot of corporates in Qatar who are still in the dark ages, and that’s putting it politely.

Do you think standards in this market need to be improved?
Khurshid: Yes, a very good example is with hotel bookings — if you go to the UK the TMC will understand the difference between a corporate deal and a leisure deal.

So I cannot sell corporate travellers a leisure rate — but in this market, they are not able to identify the difference. They just think, what is cheap we will sell that.

For corporate travellers I would always apply a business traveller rate to a particular hotel — but a smaller travel agent would just take the leisure rate and quote them that so we lose the business. There is a huge difference sometimes.

I think this market needs to become more educated in many ways.

Purakot: It’s also a very late booking market. We have clients who come in and say — book the hotels, the flights, but get me the best deal, and when are you planning to travel? Tomorrow! That’s a big problem.

What about payment terms — what issues do agents face with corporate clients here?
Khurshid: Corporates here are always comparing agent to agent in terms of the credit periods offered so we feel the need to compete with each other on this — offering customers credit of 30 days, 60 days, 90 days. They compare our commission levels as well, and what we are going to charge for a management fee. It’s too much.

The problem is the corporates here don’t look at the larger picture. When the tender goes through they look at the service fee but they don’t look at the larger picture in terms of, at the end of the year what is that TMC going to bring for that client.
I think we really need to educate our customers and talk to them about what we can really bring to the table as TMCs.

Darim: It’s also educating the customer about using credit or lodge cards such as American Express or Diners. These payment methods are used commonly throughout Europe and the US, but here in the Middle East people are scared about using plastic whereas there’s actually huge benefits for a corporate to use those here.

Is it unusual for companies to pay agents on credit card here in Qatar?
Khurshid: Yes, it’s very unusual. Just one or 2% of the corporates here are really working on introducing these payment methods currently.

Darim: But if you just cross the waters into Dubai a lot of companies actually use credit cards as a form of payment for travel — but here locally in the market we can all agree that there is still that stigma of ‘what if the agent goes off with my credit card?’

Companies still haven’t got to grips with the idea that they are still in control and are not liable for it if incorrectly charged. And for us as agents to be able to have payment through a credit card or lodge card would hugely improve our cash flow, because ultimately we are almost acting as banks — but we are not charging interest!

Khurshid: That’s true; we are facilitating finance to our customers for months at a time and it could be for much longer than 60 days. You have summed it up in one word — we are behaving like banks.

Could travel agencies here impose some standardisation as far as credit periods are concerned? Won’t this help to improve your cash flow?
Khurshid: That’s a very good idea. I think it’s been thought of many times here but it’s not going to work in this market.

This is such a challenging market that I don’t think any agent can afford to lose any account. If one agent puts their foot down on this the corporate would go straight to the next agency. If it’s a matter of offering them 30 or 60 days credit; still the account has been a good source of revenue. So at this stage unless the account is really bad then the agent cannot really afford to lose it.

Agency Debit Memos (ADMs) have been highlighted as a major problem for travel agents in this region — is this a problem you face here in Qatar and how are you tackling this?
Darim: It is a practice that’s abused by airlines. I think the question is — are they justified?

If you look at the proportion of some of the ADMs compared to the actual issue that caused the ADM, some have been completely out of proportion. When you look at the mistake that’s been made the value of the ADM is completely exponential compared to what the actual cost of the ticket originally was; or what the re-issue of that ticket originally was. There are certain airlines out there that are just abusing that ADM process.

Purakot: This has happened to me. I received a debit memo from British Airways for US $5,492 (QAR 20,000) and the reason for it was that the deal code was mentioned in the wrong box. The value of the ticket was $1,373 (QAR 5,000).So I entered a code into the wrong box and for that they fined me four times the amount.

And there was no room for dispute. I just had to pay it. I even went to Dubai to meet the British Airways trade sales manager but she refused to see me. Since 2006 it has been debited from my salary and I am still paying it now.

Are these kinds of situations common in Qatar? Is it standard practice that airlines would refuse to communicate with the trade on such issues?
Purakot: Yes these situation are quite common here.

Khurshid: A minimum of three months to three years is what we normally see it taking to resolve issues with airlines.

There are some issues we can resolve in three months, but some time they go up to one year, then three years, and some things like this they just close the door and we cannot do anything. Normally if there is an ADM you have 15 days to find the cause and dispute it with the airline. But airlines take their time to get back to us and inform us — can it be resolved or not solved and what their response will be.

How would you like to see the ADM system be made fairer for all parties concerned?
Darim: Having worked in the UK for over 10 years and going on my personal experience with ADMs there, agents have been screaming about this for years and British Airways in particular was the biggest culprit because it is the flag carrier in the UK.

But the main issue that I think we’d all agree on as the travel trade is that airlines definitely abuse the process of ADMs whether it is in Qatar, whether it’s in the UAE, whether it’s in the UK, or elsewhere because they have the ability whereby they can issue an ADM and it’s up to them whether they accept your reasoning behind the justification of cancelling it or not.

It is a completely one-way street and it is unfair on travel companies who are saying — hold on a second airlines can’t just issue an ADM as and when for amounts which can be extremely unreasonable just to help their bottom line.

But agents have been screaming about this for years, saying it’s unfair and IATA should change the rules but at the end of the day who does IATA really work for — the airlines or the agents?

Khurshid: We don’t get enough room to dispute the ADMs initially because they go through the BSP [Billing and Settlement Plan] and we can’t default on the BSP or we will be blacklisted. We just have to let the amount go and then start communicating with the airlines. We are on the receiving end. We have to accept whatever the airlines say and whatever they say goes.

Purakot: But in my case now I have waved my debit note to all my colleagues and nobody sells BA. BA is actually losing. For QR 20,000 I can say they have lost more than QR 2 million because my colleagues all ask me have they cleared your debit note yet? I say no.

So they say okay we don’t say BA. They have lost, they are still losing and they will continue to lose.

What changes would you like to see introduced to the industry in Qatar to improve standards in this market?
Purakot: We should have some sort of discussion like this but bring in the airlines too, to help improve standards overall. This would benefit the agent and the agency. We don’t have a travel agents association here in Doha unfortunately.

Khurshid: I would like to see a lot of changes in this market. There are a lot of situations where the money ends up coming out of our pocket just to keep up the customer and keep up our brand.

ADMs are one side of it which comes from the airline but we also have to bear the cost when it comes to mishandlings; visa issues; problems at the airport. Short collections are very, very common — if you quote the wrong fare you cannot go ask the customer again. The minute you have something quoted in black and white you cannot go back to the customer. So just to keep up our regular customers you need to honour them.

The idea of having a professional travel consultant insurance is a very good one. If the company was able to insure and protect its agents for a particular amount they would certainly see the value in this.

Darim: They have this in the UK, it’s called professional indemnity insurance. It’s not just for travel agents but for other industries too. Basically it covers staff when they make an error. If it’s a legitimate error the company can then claim back the costs for that and recover those. Most companies that are covered are those such as lawyers and accountancy firms — they have to have professional indemnity insurance otherwise they can’t trade.

Do you think travel agents here would be willing to pay for such an insurance scheme?
Khurshid: If the company receives a lot of ADMs I definitely think the company would be willing to pay to insure their individuals against these errors.

Purakot: There are many other situations where we might have to pay out of our own pocket. I have a colleague who made a reservation at the RitzCarlton in Bahrain, and after one month got a massive debit note.

What happened was he got the quote in Bahraini Dinar, but he thought it was Qatari Riyal. The quote was for US$ 87,518 (BHD33,000) but he collected just $9,062 (QAR 33,000). The customer said sorry if I had known it would be such a big amount I would not have stayed in the hotel. So he had to pay $46,686. He flew to Bahrain and met the owner of the hotel but they said they would not waive such a big amount.

Darim: It shows that in the Middle East as a whole we don’t look at putting in the quality controls that could reduce the number of errors — whether it’s on flights or accommodation etc. If those QCs were in place, then the number of errors would definitely reduce.

What else can be done to improve standards in the market?
Darim: The biggest burden we all suffer from is that our clients don’t know our value. The majority still see the agent as an order taker and they cannot see the added value that we bring so it’s educating the corporate — the person who is within that travel department — as to what we can bring to the table, what value we can bring, what savings we can bring.

A lot of corporates will negotiate directly with an airline, a hotel or third-party vendor but as an agency we can book those services and it saves them a lot of negotiation time. Unfortunately corporates in this market don’t see that, they are very, very blinkered.

Khurshid: But to some extent I don’t know if we can blame the corporates. The airlines and the hoteliers approach them and offer them a greener picture, and the corporate community sees the benefit. Sometimes I think we try our level best to educate them but they are resistant, they don’t want to bring those standards up. And we are dictated to most of the time as an order-taker.