TIR magazine - 0861 Travel exonerated - Melany Bendix unscrupulous

“The 0861Travel Debacle”
For those agents who have had the misfortune to read the article on 0861Travel in the February 2007 edition of TIR, here are some facts you need to know.

IATA:
They claimed that we misrepresented our IATA membership, and stated that our licence was cancelled on 25th October 2006, yet we still displayed the IATA logo on our website.Here are the facts:
1. IATA agreed to take us through a process of canceling the licence held by Travcon (Pty) Ltd and apply for a new licence in the name of 0861Travel (Pty) Ltd.
2. Their Peter Maseku replied that final billings would be available by the end of September 2006 in order to settle the final account and apply for a new licence.
3. No final billings were received until 8th February 2007.
4. In between that time a registered letter dated 25th October 2006 was purportedly sent to Travcon informing them that the licence had been cancelled, which was expected. However, their letter had incorrectly captured our address and furthermore came from Geneva, and not Johannesburg, whose previous correspondence sent to us was correct.
5. We simply never received such notice and were therefore unaware of such cancellation.
6. Furthermore, IATA continued to pick up returns from our offices until December 2006 as if the status quo had remained.
7. In January 2007 we addressed IATA, with their logo on our email, to press them on the issue of our final billings, and no one said anything.
8. On the 6th February 2007, Johnny Ray spoke to Peter Maseku on the whole issue of their delays. This was followed by a call from Natalia from TNW. Only after questioning did we get an email enclosing a copy of this letter dated 25th October 2006.
9. In all our dealings with IATA they always faxed notices as well as posted. Why not in this case?
10. Another question is how does this information get to journalists? Surely it is confidential. After getting this info through unlawful means, TIR did not confront us with it. Instead they decided to play judge, jury and executioner.One should never assume and then judge. The spotlight is now on TIR to explain how they got the info and to retract their allegations against us. AS far as we are concerned, IATA’s notice was defective and therefore the licence was only cancelled on 6th February 2007.

ASATA:
It is hard to actually make out what point TIR is making about ASATA membership. The simple fact is that we were members. ASATA disbanded its ASINTO section we belonged to and we advised the Franchisees accordingly. It is also a fact that we deleted the ASATA logo off our website and emails and since the beginning of 2006, and yet TIR claim that the have a signed letter from us dated May 2006 which purportedly has the ASATA logo on it. Once again they are assuming this to be correct. Furthermore we have never represented in our contracts that we are members of ASATA, and yet for the sake of 1 letter, we have been accused of “blatantly” mis-representing the fact that we a re members of ASATA. Simply, this is not true and our membership was not material to any existing franchisee.

It also once again puts into question how TIR has unlawfully obtained confidential information from ASATA.Start Up businesses:TIR states that “Franchisees are falling like dominoes” and that we have the “worst travel agency closure rate in travel industry history”Firstly, we are the only Travel Franchise Company that does start up agencies, so their statements are void of any sensible analytical data on this subject. But let’s analyze some of the stats that they have alleged. According to their, 30% of the Franchisees have closed in the last 3 years. Statistics for new businesses in this country is that after 3 years, 95% of new businesses have closed down. The stats for Franchise operations, is that the number is 50%. Therefore a 30% failure rate is an improvement on the norms. Once again showing the one sided approach that TIR had in the story.

Various issues raised:
It is difficult to individually answer some of the comments and allegations made by some ex-Franchisees due to upcoming litigation, but we can say the following:-
1. We have built stunning stores and wonderful branding for each persons business.
2. Everyone has been given Worldspan s a GDS system. Who in turn have supported and trained many of the Franchisee staff.
3. Our web application, MultiRes, offers one of the best and most efficient web applications in the travel agency / wholesale operations in the country today. It has been up and running for more than 95% of the year for the past 5 years and we invite interested agencies to see how the system works on a one on one demonstration. All franchisees have been given access to and registered with all major tour operators and have been given access to our prices to make competitive choices. Tour operators have been extremely supportive and their brochures can be found in the branches brochure racks. Adequate training has been given in terms of understanding our processes and systems. Not training to convert a person into a travel agent overnight. Everyone is given passwords for Multires, access to a GDS, email accounts, stationery graphics together with electronic stationery and a marketing plan. In essence, we are enablers. The business has to be run successfully by the Franchisee.

SO where has some of it gone wrong?
• Some franchisees have simply used us for a start up company, and then move onto bigger brands or become independent. Thus they avoid franchise fees once they have everything behind them. They are using this platform to get out of a 10 year contract.
• Others have failed simply because they have failed to put things together in order to sustain the business and a common theme is that they “have not followed the business plan”. A lack of their funding has contributed towards this. Our feasibility on the website has estimated that it will take 2 years before you make a profit. These franchisees are now also using this platform to resile from their 10 year contract.
• Another common denominator is that a major cause in the breakdown in relationship with the Franchisees is that we have had to continually put Franchisees into breach for being dishonest in transactions in order to pay less franchise fees. We have recently made a change whereby we now have a higher monthly fee with a rebate and Franchisee has the choice of where they place their business.

On the question of pricing and discounts: By putting a collective body together we can leverage volumes into better pricing and overrides. If anyone understands the industry, it is not the Wholesaler who determines the price, it is the volume produced by his agents and their clients. TIR does not appear to understand this concept, so we will just leave it at that.

Why this attack on 0861Travel:
Some ex Franchisees have been represented by advocate Louis Nel who has admitted in the past that we are not in breach of our contract. He is now trying to negotiate a position for the franchisees with an aim of getting them out of the 10 year contracts. This is through the creation of a story that we have not delivered on our promises and that we have misrepresented ourselves. Obviously now that the truth is out that they were wrong about IATA, who knows what else he will cook up.

Advocate Louis Nel is well connected in the Travel Industry as he is employed by ASATA as their legal advisor and who writes a column for TIR. We know first hand that he is able to obtain confidential information from ASATA, and has used it when representing franchisees. We believe that there are huge conflicts of interest when an advocate represents clients such as travel agents, a body such as ASATA and writes a column in an industry magazine over which he has influence.

Right from the outset, when Melany Bendix from TIR approached Johnny Ray for an interview, her true intentions and information she had already had on 0861Travel were not forthcoming and the interview was conducted in a vacuum. Likewise her written questions were also put in a vacuum and she broke her word to firstly send Johnny the article before print. The whole interview was gained under false pretenses.Melany then went on to the franchisees and gave them all her allegations to maximize stirring the pot for 0861Travel.

Her behavior is unethical and lacks integrity. But this is what happens when you have an industry whose main institutions are controlled by a few people with a cross section of interests and can wield their influence to manipulate.

So Where to now?
The travel industry has a problem. Small to medium sized agencies, mainly independent or part of Franchise concepts, are in danger of going out of business in the next three years.

Why?
It is a high volume, low margin industry. Shopping centre rentals are high and so is the cost of admin staff to control IATA licenses. Airlines are in direct competition with travel agents through their websites, not because of any bad intention, but merely to save costs. We have always advocated that the internet and all modern day communication technology and software in a B2B situation can be the travel agents best friend. We are currently developing a multi platformed approach to bring together all internet tools to satisfy the airlines, the GDS service providers and cut out all back end settlement administration which has pushed costs up for both the agent and the airlines.