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September 17, 2002
Travel Weekly excerpt
NEWS - Travel Technology
by Dennis Schaal
NEW YORK -- Brian Nystedt, the owner of New Departures in Minneapolis, knows that some clients are procrastinators, but this one was a little unusual.
The client, "a very good one," was on the phone on the afternoon of July 10. He wanted to "plan" his honeymoon -- for the next morning.
Nystedt turned to Site59, the distressed inventory packager that he accesses through its Worldspan rendition, Agent59.
"The client was thinking L.A. All of a sudden, San Juan popped up. They went for five nights," Nystedt said.
The package, booked at 4 p.m. with a 6:30 departure the next morning, came in at $1,900 as Nystedt paired an American flight with a stay at the Wyndham El San Juan.
"Published air fare alone would have been about $1,300, and it's a nice, quality hotel," he said.
The agency owner added $50 per person service fees to Site59's 5% commission.
The transaction wasn't an immense moneymaker for New Departures, but Nystedt said he was happy, and so was the client.
Nystedt is among what appears to be a growing contingent of agents who turn to the Internet for "dynamic packages," that is, air, car and hotel products that can be mixed and matched with real-time availabilities.
Travel Weekly interviewed owner-managers and travel counselors in four agencies about their experiences with two leading online packagers, Neat Group and Site59.
Neat Group received rave reviews; the reaction to Site59 was mixed.
Nystedt said he likes the deals he can put together through Agent59 because they "usually will beat bereavement fares, and I have used it that way."
"It's an every-once-in-a-while kind of thing," Nystedt said about his use of Site59. "Usually the kind of people who call for these things are good clients who realize their calendar is full and they want to get out of Dodge," he said.
Site59 sends commission checks the month following the booking, and Nystedt received his in six weeks.
Kevin La Van, manager of Village Cruise and Travel in Chicago, used NeatAgent -- Neat Group's platform on Worldspan -- to book a family of four into an Orlando hotel, tacked on a car rental, and got his 29% markup through ARC a week later.
"It's not like it was distressed, bargain-basement pricing," said La Van, referring to the $393 he charged the clients for four nights in the Holiday Inn Orlando-International Drive Resort and the Hertz rental.
Pricing in Worldspan was comparable, he said, because of steep discounting these days.
"The main benefit was everything was together on one sheet, and I didn't have to worry about when suppliers are going to decide to pay me," La Van said.
The hotel and car package from Neat Group did, however, "blow away anything the tour companies offered," the agency manager said, because generally the tour companies are tied into contracted rates.
"It's the coolest thing since sliced bread," said La Van regarding NeatAgent. "I'm making a ton of money, and my clients are leaving thrilled because they think they are getting the deal of the century."
For the two adults and their two children that he booked in Orlando, La Van used Worldspan for their commissionless American Trans Air flight because their desired flight times were unavailable through NeatAgent.
But, generally, he tries to include air in the NeatAgent packages because the flights boost his markup.
"We are a smaller agency, and this is huge to our bottom line," La Van said.
The agency's profit through NeatAgent -- and Travel Guard insurance can be included and marked up, as well -- far exceeds its margins from an 11% preferred commission agreement with Funjet Vacations, he said.
La Van said he examined Site59, but "I haven't used it because my time is worth more than 5%."
"If I add a service fee [to a Site59 booking], it's going to show up," he explained. "The client might say, 'You don't deserve $100.' With NeatAgent, the markup is seamless."
Susan Buscemi, a leisure agent at MSW Long Island Travel Group in Syosset, N.Y., books Neat Group packages through its Travelsavers incarnation, TripXpressPro.
Before using TripExpress-Pro, she researched packages with wholesalers through Sabre or over the phone.
Now, she occasionally turns to Neat packages, as she did for a reservation on an American flight to San Francisco, with a Hertz car rental and a three-night stay at the Hyatt Regency San Francisco Embarcadero.
"I think it's great," Buscemi said. "I marked it up a little less -- I think 10% to 15% -- so I could get the booking. I can make it lower or higher, whatever is beneficial to make the sale."
The packages don't meet all of her needs, though. "Unfortunately, right now it's just domestic," Buscemi said. "The majority of my bookings have been to the Caribbean. People are cruising."
Arthur Mehmel, owner of TourScan in Darien, Conn., likes the pricing on Site59 and thinks "the air and hotels are offering tremendous value for last-minute availabilities."
But Mehmel said he believes the company would get a lot more business if it upped its commissions.
TourScan specializes in Caribbean vacations, and Site59 has "limited value" for that region, he said. Mehmel did, however, book an Anguilla package on Site59.com.
"The rate was cheaper than a bulk air package to Sonesta, so my client saved money," he said.
"Of course, the 5% commission is nothing to get excited about."
The firms and how they differ
NEW YORK -- Neat Group and Site59 tangle in some respects, but the two companies tap different markets and have divergent focuses.
Neat Group, based in Woodlands, Texas, and founded with backing from United Airlines, offers packages that can be booked up to almost a year in advance of the travel date.
Although it has consumer deals with United, and Sidestep, Neat Group enables agents to set their own markups and settle them, with or without service fees, through ARC.
Site59, based in New York and recently acquired by Travelocity, offers last-minute packages only and pays agents 5% commissions.
Although Site59 and Worldspan offer Agent59 through the GDS, and the packager has an agency affiliate program on its own site, Site59 gets just 3% to 4% of its revenue from agencies. -- D.S.
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