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Shocking air fare price discrepancy

The problem with surveys is that they’re usually paid for by companies that have a vested interest in the outcome, which puts a bit of a taint on the results.

That said, the results of a survey released last Friday by online travel agency Travelstart are eye-opening.

Consumers are advised to shop around for air fares. A survey found that prices quoted to London from Joburg on the same dates ranged from R8 628 to R16 155 - a huge variance of R7 527, or 87 percent. Credit: AP

The company paid multinational consumer research company Synovate to source international flight prices from traditional travel agency groups, with surprising results.

Prices varied hugely, leading Travelstart to allege that the agencies often quoted fares on which they stood to earn the highest margins, rather than those that were cheapest for the consumer.

A word about the methodology, because I think it’s important: the researchers contacted 50 different branches of six traditional travel agency groups, collecting 317 quotes for the Joburg/Cape Town route as well as flights to 10 international destinations, ranging from London and Paris to New York and Bangkok.

They compared pricing, consistency and quality of service.

The agents who were contacted were not told that they were part of a survey, and the first price they quoted was used – no negotiating took place.

Travelstart chose the travel agency brands and flight routes, but the researchers independently selected the dates and flight times and number of passengers.

Of the 10 destinations surveyed, the prices for flights to Amsterdam, on the same dates, were the most alarming, with quotes ranging from R6 000 to R14 300 from Cape Town, and from R7 429 to R12 426 from Joburg.

Quotes for flights to Frankfurt and London were the most inconsistent.

Interestingly, nearly 40 percent of the surveyed traditional travel agents either refused to give a quote over the phone or did not get back to the caller with a quote.

The prices quoted to London from Joburg on the same dates ranged from R8 628 to R16 155 – a huge variance of R7 527, or 87 percent. This would mean an overcharge of more than R30 000 for a family of four.

Flights to Frankfurt on the same dates were no better, with one agency quoting R6 115 from Joburg and R6 369 from Cape Town, and another quoting R11 400 from Joburg and R8 213 from Cape Town – a whopping 86 percent more expensive in the case of the Joburg price.

So the person who believes they are being given the best price on the day and fails to shop around could be paying dearly for this assumption.

Proving a pattern in the research, one traditional travel agency group offered five different quotes, varying by as much as R4 577, from five of its Gauteng branches, for the same Amsterdam flights from Joburg.

“We were expecting different prices when we commissioned this research to compare our online service with traditional offerings, but we were shocked at the huge price variations from the traditional travel agency groups,” says Stephan Ekbergh, chief executive of Travelstart.

“We were even more surprised at how different branches of the same travel agency group were quoting such different fares.

“This research shows that South African travellers simply cannot trust that the traditional travel agencies will get them the best available flight deal first time round.”

Every travel agency has access to the same fares distributed by the airlines, worldwide, Ekbergh says.

“So pricing discrepancies, like we have seen in these results, occur when travel agencies load fares with exorbitant and inconsistent service fees.

“Clever marketing leads customers to believe they can trust the big buying power of the traditional travel agency groups, but this research proves exactly the opposite.”

Interestingly, while up to 50 percent of flight bookings in the US are made online, only five percent of flight bookings are made online in South Africa.

“Consumers are realising that online travel agencies offer them the advantages of lower prices, greater transparency, more flexibility, convenience, a wider choice and more control over their flight booking experience,” Ekbergh says.

Naturally, Robyn Christie, chief executive of the Association of SA Travel Agents (Asata) – of which Travelstart is a member, incidentally – has a different view.

“Turning survey results into intelligence is always an interesting exercise and obviously Travelstart have interpreted a version that reflects kindly on their online travel business,” she said.

“But it is harmful to an industry to create a perception that all travel agents other than themselves are rip-offs.”

She cautioned against underestimating the intelligence of travellers.

“South Africans are sophisticated travellers; they know what they want and neither traditional travel agents nor online agents are smarter than them, so to indicate that they are being ripped off to the extent of 85 percent is sensational and perhaps a little insulting.

“Asata members abide by a strict code of conduct and without seeing the details of this survey it is difficult to understand who is deviating from the norm.

“I can testify that 94 percent of all our calls of complaint are about non-Asata members, including a deluge of travellers who have been let down by the internet.”

Not all travellers were seeking the cheapest price, Christie said. “Many are seeking advice from travel experts, advice they are prepared to pay a negotiated price for.

“This intermediary service includes the negotiation of competitive rates, providing 24-hour access in the event of any unforeseen changes, not to mention having to interpret complicated fare rules to avoid unnecessary charges.”

For the past eight years, she said, travel agents had been charging service fees, as a result of airlines moving away from paying commissions to agents.

“Therefore the survey is not well informed as to its assumption that the agent will move business in an attempt to maximise their earnings.”

More than 80 percent of airline fares in South Africa were booked by travel agents, Christie said, so the internet had not replaced traditional agencies.

“The market is well versed in the virtues of the online booking agents, but equally aware of the consequences of when things go wrong, which they do more often than not,” she said.

“It is at these times when the value of a relationship with a travel company becomes essential.” - Pretoria News

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