Though travel businesses are moving more towards a fee-based model, in most cases they should still be charging more, says an accountant who specialises in the sector.

Paul Davies, partner with OneTeam Chartered Accountants, says that many agencies are currently earning significant profits – as much in five or six months as they would have in a year pre-Covid. However that is on the back of the principals and their reduced teams working extremely hard and putting in longer hours than are sustainable.

Retail agents need to take full advantage of the new ‘supply and demand’ situation they are presented with, says an accountant who specialises in the travel and tourism sectors.

Paul Davies, partner with OneTeam Chartered Accountants, says concentrating on quality clients rather volume will also help alleviate the challenge of adding staff to an agency team.

Now is the time for agents to reconsider whether they are an agency or a consultancy business.

Air New Zealand announced last week that point-of-sale commission levels are reducing from 5% to 1% for long haul routes and 3% to 0% for short haul routes. This will have an immediate effect on travel agents’ and consultants’ business income. Now you have no choice but to take control of your own business profits.

By Manoj Vagh, Partner, OneTeam Chartered Accountants

We have just completed the six-month TAANZ bonding results for our 70 plus travel clients.

The travel business results are much better than most of our other clients who have been affected by Covid. Our travel clients were profitable or at break even for the six months ended April to September 2021.

When will the border open, and when will clients start to book international travel?

Many countries are well ahead of us.  According to a recent McKinsey and Company Report named ‘Rebooting customer experience to bring back the magic of travel’, North America is already back to 90% of 2019 travel figures.

As most travel and tourism businesses are in hibernation, they find it difficult to find staff. This situation presents an opportunity to move your business model from a high volume, low margin business to a lower volume higher margin business.

An accountant who specialises in the travel and tourism industries is urging agents and others in the trade to gain a good understanding of the recently announced Wages Subsidy and Resurgence Support Payment (RSP) even if at first glance they feel they may not qualify.

Paul Davies, director of OneTeam Chartered Accountants says if an agent’s actual or expected revenue is down by 40% or more due to the move to Alert Level 4 they can claim the wages subsidy for the two weeks commencing 17 August. 

‘The comparison is either with a typical 14-day period in the six weeks prior to 17 August. It is important to note that if your business is seasonal (which most travel businesses are) you can compare with 17-30 August in 2020 or 2019,’ says Davies.

By Paul Davies, Partner, OneTeam Chartered Accountants

At OneTeam CA we are breathing a sigh of relief as we have just finished sending in most of our 31 March travel industry accounts to TAANZ Bonding for review.

As you can imagine the results were not great – most travel businesses had negative sales for the 2021 year. Most had a positive gross margin as they had received cancellation fees and credit support from the government.

By Paul Davies, Partner, OneTeam Chartered Accountants Ltd

Every crisis brings about changes. Hardship separates those who love what they do and are prepared to adapt from those who are locked in old methodologies.

By Paul Davies, Partner, OneTeam Chartered Accountants Ltd

You are down, but not out. Now you consider when and how to restart your business. What should you do?

By Paul Davies, Partner, OneTeam Chartered Accountants Ltd

The good news is that consumers’ desire to travel is strong – something you probably already know from your own clients. Tony Alexander (ex BNZ economist) released the results of his recent survey in his report on Thursday 18 February.