Axing of overrides and commissions; delays in resolution of service fees; the limbo in the interim; bad government behaviour and miscommunication of government policy are factors that have led to this crisis, say the country’s travel management companies (TMCs).
TourismUpdate.co.za reports that these sentiments were the consensus of TMC members attending the recent Public Sector Workshop hosted by the Global Business Travel Association (GBTA) at the CSIR International Convention Centre in Pretoria.
Reporter Taryn Nightingale quotes the MD of Duma Travel, Nomvula Mthombeni, as saying “these issues are bread and butter for us. As TMCs we are barely surviving”. Mthombeni says she doesn’t know how much longer TMCs can survive under the current conditions.
An earlier casualty, Magic Travel, went into business rescue earlier this year. At the time some of the TMC’s government accounts had not been paid.
A huge problem the new travel policy has failed to address is the payment delays and resulting consequences this has on TMCs’ cash flow. “Government sees TMCs as a bank,” Robert Wilke, Executive Director of Travel With Flair (TWF), says.
Last November, TWF footed the bill for a government client’s conference which still hasn’t been paid. “I went to National Treasury only to find out this department doesn’t have allocated budget. This has a huge ripple effect. For example, it affects my credit limit with the service providers.”
Marco Ciocchetti, CEO of XL Travel, says TMCs agreed to the new policy on the condition government departments would settle their accounts on time. “Smaller businesses and new entrants in the market won’t be able to do government business unless they have financial backing.” A new entrant won’t get credit from suppliers, he says. “I can’t see them being able to sustain themselves in the industry.”