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ALTO Conference talks discounts, direct bookings

Discounting, direct bookings and how better to use technology in the global study travel sector got the delegates at ALTO’s inaugural New York conference focused this month, with some of the central problems shared between education agencies and language schools laid bare for a big-name panel of education agencies to consider.

Board member Andrew Mangion of EC introduces the panel discussion

"We have to evolve, we cannot be fed by schools any more"

Victor Hugo Baseggio, Director and co-Founder of CI (Central de Intercambio) in Brazil; Krister Weidenhielm of Europe-focused ESL and almost-mythical figure OJ Kim, Founder of iAE Global in Korea, which has since expanded across operations Asia, faced a conference room full of owner-operators; many education brands and other established agency companies were represented.

With a combined student volume sent overseas annually by those three brands estimated as 100,000 by Chair, Sean Hale (ex-MD of Embassy), delegates were fascinated by their differing opinions on core issues.

How to tackle pricing for the end-consumer was debated: should agencies work with a net price and mark up, or work with commission agreed within standard gross prices so that a benchmarked price across markets is achieved?

Kim said agencies should be able to set their own price for products that they sell. “We have to evolve, we cannot be fed by schools any more.” There was a difference of opinion at ESL, with Weidenhielm suggesting this practice, not widely used it seems, could lead to a “souk” mentality.

Should different prices be made available according to market? Baseggio saw nothing wrong with this “if I were a school”, but one US-based delegate observed that it was illegal in the USA to sell the same product at different prices, adding legal complexity to the topic.

He warned a “partner” school should think carefully about driving a direct booking campaign in a market where they were well supported by agencies

Dynamic pricing, common in the hotel or airline industry, for example, was also up for debate, with a difference of opinion again as to whether this would be a good thing in an industry that traditionally fixes prices for an entire year in advance.

It was generally agreed that a technology platform would be required to accommodate the concept of a fluid price point, which led to a detailed consideration of how the industry might use technology to evolve.

Pricing apart, there was much support in the room for a standardised online booking form that could be consistent across all players and eliminate the need for re-entering booking details and human error. Baseggio said, “I want to improve the quality of life of my employees, they could better use their time rather than inputting data and amending details [to conform to school booking processes].”

A stumbling block was the financial and logistical hurdles, although there was some appetite for ALTO members agreeing on a standard booking template.

Direct bookings were also tackled, with Baseggio and Kim sanguine about schools developing direct booking channels. Baseggio said they were discussing enabling their clients to contact partner schools directly, and both underlined that they added value to the booking process.

Weidenhielm was less accommodating, warning that a “partner” school should think carefully about driving a direct booking campaign in a market where they were well supported by agencies.

The inaugural event in New York also featured business experts – such as Adam Bryant, famous in the USA for his Corner Office column that interviews successful CEOs – and socialising opportunities.

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5 Responses to ALTO Conference talks discounts, direct bookings

  1. About the point of direct-booking campaigns. If you are a school planning to do it, may be you should also think to the following:

    – Are you ready to deal with all the Customer-Relationship issues that stem from complex programmes bookings in all the different countries you want to recruit? That is going to take a huge investment in staff training for changing the merely admissions-focus of officers for an ampler view of trans-cultural differences and communication management per nationality… otherwise you will be working for delivering results today but destroying value for tomorrow. For us agents this is not a problem since we operate with a perfect knowledge of the business and society’s culture in the countries we are based in.

    – Direct brand exposure: Schools will be alright and creating value for today and tomorrow if they know how to project their brand and let prospects have nice experiences with it in every country they are to recruit. However if the strategy is not tune enough the cost of exposing your brand will be way more expensive than commission paid to agents per booking… in this viral-communication world you just can’t afford a miss-deployment of your brand. For us agents minimizing this risk is our job, because our task is to marketer the best way possible your courses, facilities and destinations inside the market we operate and if mistakes are done the impact is absorbed by our brands and not yours… we are the first line of defense!

    – Market regulations: Let’s say you are school very interested in getting a very nice market share in an specific country. You create a website and you host it in that country for facilitating SEO effectiveness… Well you better study and look to complain with all the commercial laws of that particular country, even more if you have marketing representatives based in there too… E-business begins to be the more and more regulated -I don’t want to say controlled- and every country is free to law it as they wish to… from data protection regulations with particularities that you might never imagined… to taxation… yes, taxation… in some countries no matter if your service is to be consumed abroad, if you are promoting your business in the country and obtaining money from its nationals you are subject to taxes and the way you must present your tax declaration could give you very unpleasant surprises. For us agents this is not a problem, our management and legal staff are always attentive to this, wording-up and updating the conditions of enrollment for students based on transparency and our countries’ laws requirements… invoicing and cashing payments processes run as well always in coordination with taxation indication from authorities… no worries for you at all.

    – Visas: well, I don’t want to go deep on this one -this was supposed to be a commentary and not an essay- but are you schools willing to assist students in their visas-applications in markets with this need? This implies to be aware to the smallest updates from embassies on the subject…

    Now, do we agents play a major role or do you think we can be replaced for your own ‘trip-advisor’ and frequent-student credits programme?….

    Javier Perdomo
    Latin America Manager
    ESL – Language Studies Abroad
    javier(at)esl.com.co

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