The lap of luxury

Ancillary products are rarely given much thought by travel agencies, but organising high-value add-ons such as chartered cruises or helicopter tours can prove lucrative. ATN makes some profitable suggestions

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By  Joseph Mortimer Published  October 7, 2006

|~|Aerogulf-large.gif|~|Aerogulf recently moved its base from a corner of Cargo Village to the new VIP terminal of Dubai International Airport. |~|The Middle East boasts an increasingly wealthy population, and clued-up agents who put together creative luxury packages tailored to this market can easily boost their company’s profit. Commissionable ancillary products are the answer, and the more unique, outlandish, adventurous or luxurious the product or service you offer is, the more likely the cashed-up client is likely to want to pay for it! Luxurious yachting charters and hot air balloon flights don’t have to be the exclusive realm of hotel concierges and adventure tour companies; with a bit of savvy, some market knowledge and a little bit of research, agents should be able to sell such products as easily as they can flights. There are so many luxury options available for wealthy holidaymakers, particularly in destinations like the UAE, Bahrain and Qatar, but tour operators are not making the most of the options available, or promoting them sufficiently to clients. And, although many hotels offer their guests luxury services through their concierge, few advertise these options to the tour operators, wholesalers, agents or DMCs that are selling their product. The few hotels that do make tour operators aware of their product selection tend not to offer extra commission, but travel agents and operators can boost sales and therefore the commission they earn on room sales, by quoting these ancillary services as a USP of the hotel. The Park Hyatt is building a reputation as one of the most luxurious hotels in Dubai, offering guests activities and services such as yacht charters, golf, trips to the races, a helicopter tour, polo lessons, and the chance to hire a Porsche or relax in the spa. “The guests can book all of this through the hotel concierge service, but tour operators can tell customers what is available, so they are more likely to choose this hotel,” says Maria Warner, marketing communications manager. “The Japanese in particular love the spa, and they spend a fortune, so by promoting our Amara Spa as a USP to that market, tour operators can boost sales.” Although spa bookings are non-commissionable, by promoting USPs to niche markets, operators can guarantee earning the 10% commission from the room booking, she explains. “Some tour operators are actually pushing the spa facilities to certain markets, and encouraging customers to book their slot in the spa in advance, in order to guarantee a booking during peak periods,” she says. The prestigious Saks Fifth Avenue store in Dubai’s luxurious Bur Juman Centre has recently teamed up with the hotel to offer an exclusive after-hours service for VIP guests. If a guest is arriving at an unusual hour, or decides to go shopping after normal closing time, the store will keep its doors open for the exclusive visitors. Again, although this is not something that the trade can profit from directly, by adding value to the standard hotel offering, they might be able to sell a package incorporating a stay at the Park Hyatt, rather than at a cheaper, and therefore less profitable property. And what’s more, agents displaying product knowledge and expertise are more likely to win the trust of the customer. If the price is right and the service is good, the chances are that customer will come back to make their next booking with them.||**||Splash out|~|Yacht.gif|~||~|Corporate travel planners and MICE bookers have plenty of luxury ancillary products from which to choose; desert safaris and city tours are a typical option for visiting groups, but for clients willing to spend that bit extra, there are plenty of exciting opportunities. Abu Dhabi-based Arabian Divers, for example, has specialised in taking leisure and corporate groups on boat charters for anything from dolphin watching to deep-sea sport fishing, for the last 10 years. The company has two vessels that can each cater to19 passengers although it is legally required to take smaller numbers on specialist tours such as open water diving and deep-sea fishing. “People that don’t know the costs involved in a deep-sea fishing or diving expedition are often put off by the price, but that can be overcome by creating more awareness in the market,” says Captain Greg Heinricks, managing director, Arabian Divers. “We have a few repeat international clients that come back for a sport fishing holidays ever year, but mainly people want to go dolphin watching or visiting the Palm islands.” Arabian Divers pays the few tour operators that do actively encourage customers to book packages an impressive 20% commission, which can prove lucrative considering the value of the booking. An eight-hour deep sea fishing trips costs AED 3300 (US $898), for example. “We work closely with some tour operators, but there is still a distinct lack of awareness for any water activity tours, and [tour operators] seem reluctant to sell any tours apart from the standard desert safaris and belly dancing,” says Captain Heinricks.||**||Flying high|~|Balloon.gif|~||~|At the dawn of commercial aviation industry in the 1930s, travelling by air was deemed a pursuit of the super rich only. Today low cost carriers have made air travel a phenomenon enjoyed by the masses, but certain air services will always remain at the luxury end of the scale. Since it took part in ATM earlier this year, Aerogulf Services has received a massive boost in the number of tour operators approaching the company to contract rates for bookings. The company has been serving the UAE’s offshore oil and gas industry since 1976, but a few years ago it saw the potential for making profits from operating commercial flights for tourists. “If you haven’t seen Dubai from the air, you haven’t seen it at all,” says Captain Andreas Engeli, pilot and marketing manager for the company. “The exposure we got at ATM was fantastic, and we had a great response afterwards. There is huge potential for us to capture the tourism market and to generate bookings through [the travel trade], but I think it will take time.” Aerogulf recently moved its base from a corner of Cargo Village to the new VIP terminal of Dubai International Airport, which caters exclusively to business jets, helicopters, and royal transportation. “Passengers will now be greeted like a VIP, and relax in complete luxury before their tour is ready to leave,” says Engeli. But whether or not people book helicopter tours or transfers ultimately depends on price, he says, and the price has to be right. At the moment, clients purchase tours on a fixed price basis, which covers the cost of hiring the entire helicopter, but Engeli hopes that in the future, demand will be strong enough for customers to buy seats on an individual basis. “Eventually perhaps we will work out some packages with the trade so that they can earn commission,” he says.||**||Air taxis|~|Air-Taxi.gif|~||~|Air taxis connecting passengers from commercial flights to their final destination are also taking off, providing a more efficient mode of transport than rental cars or taxis. Sri Lankan Airlines has locked onto this trend and has launched an air taxi service, which transfers guests to 12 destinations on the island from Colombo International Airport. An eight-hour journey by road can be reduced to between 35 minutes and one hour in the air taxi, and agents can earn 7% commission on all bookings, says Ruvini Jayasinghi, media relations officer, Sri Lankan Airlines. “You get to the destination much quicker, and you can incorporate scenic side trips on some of the journeys,” he explains. Clients taking multi-destination trips around Asia will want to spend as much time as they can in every destination, so cutting out a seven-hour bus journey is worth every penny, he adds. Business class passengers even pay less than economy passengers for the air taxi transfers; flight prices start at US $50 for business class, and $75 for economy class passengers.||**||A helping hand|~|Blue-Banana-MiG25.gif|~||~|Until travel agency managers start to contract directly with the providers of luxury services like cruising or flying, agents are forced to find other ways to benefit and profit form the huge earning potential that ancillary products offer. If they can’t earn commission directly through the sale of these products, then why not charge a service fee for suggesting and booking luxury add-ons to customers, in the same way that the would when selling fares on a European carrier that pays zero commission? Blue Banana is a Dubai-based online company offering customers “the alternative gift experience”. The company web site features a huge selection of packages that could be incorporated into a visit to Dubai. Categories include flying lessons, desert adventures, yachting and cruising trips, scuba diving, 4WD and sports car driving experiences, and health and harmony packages. The company can tailor-make packages according to individual customer requirements. “Rather than going to one company to book a helicopter tour, and then to another for a yacht charter, clients can come to us and we can do the whole lot for them,” says Simon Ford, founder, Blue Banana. Helicopter tours, trips to Dubai Autodrome or Ski Dubai, hot air balloon flights and yacht charters are popular and affordable, but he also offers more extravagant experiences such as hair-raising flights in a MiG-25. While the majority of business comes from people buying gift experiences for others or making direct bookings for themselves, Ford says that around 15% comes from local DMCs or international corporate travel planners asking for specific itineraries. Dubai alone has an array of activities that visitors usually book through their hotels upon arrival, provided by companies like Arabian Adventures and Desert Rangers, but regional travel agents should think about offering these products when they make the holiday booking. Agents focusing on outbound travel to European destinations should do their homework and find out what activities are available in the countries that they deal with the most. This way they can tailor make-packages to suit client needs, suggest activities they think might be of interest to them, and make extra profit by charging a service fee.||**||THE SALES PITCH|~||~||~|SELLING TIPS: Not every customer is in a position to spend a fortune on luxury extras like chauffeur-driven cars and helicopter transfers, but astute agents should be prepared to make customers aware of what is available. Suggest trips or options that seem fitting, according to individual client’s budget and interests. It might work out cheaper for a small group of businessmen flying to a regional destination to charter a private jet, rather than paying for 10 first class tickets on a commercial airline. Sri Lankan Airlines’ air taxi transfer service costs $50 for business class passengers, and can shave around seven hours off of a domestic journey within the country. Agents can earn 7% commission. Daylong yacht charters are expensive, but often include meals and refreshments, and keep clients busy for a whole day. Helicopter transfers from airports to hotels are rarely economical, but are an essential holiday ingredient for those living in the lap of luxury. Businessmen in town for several days, with meetings scheduled in several locations might prefer to hire a car and a chauffeur, than risk missing appointments because they don’t know their way around. Other services offered by some agencies include theatre tickets, meet and greet services, in-room shopping, and romantic tours or cruises for couples. SAMPLE PACKAGES FROM BLUE BANANA: Diving with Great White Sharks: fly from Dubai to Cape Town and experience the world’s fiercest predator from the safety of a six-man cage made of galvanised steel. The package includes return flights to Cape Town and six nights in five-star accommodation. AED 12,975 ($3533). Luxury balloon flight: spend an hour floating above Dubai in a romantic hot air balloon flight for two. Includes pick up from any location in Dubai in air-conditioned Land Cruisers, a personalised flight certificate, private butler to serve refreshments throughout the flight, and a photograph. AED 7500 ($2042) for two people. Luxury Alia III Cruise: a maximum of 12 people can enjoy a luxury VIP cruise on a 65ft yacht. A captain, first mate, and a hostess will accompany the group. AED 10,000 ($2723) for four hours and an additional AED 300 ($82) per extra hour. MiG-25 ‘To the edge of space’ flight experience: fly at Mach 3 to 80,000 ft in a Russian fighter jet, take the controls and see the blackness of space above and the curvature of the earth below. Includes pre-flight training and a medical, return flights to Moscow, five nights’ accommodation in a five-star hotel, a tour of Moscow, and in-cockpit DVD footage of the flight. AED 57,750 ($15700). ||**||

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